Title
Payment of Wages and Prohibition on Token Use
Law
Commonwealth Act No. 303
Decision Date
Jun 9, 1938
An Act requiring employers to pay salaries and wages at least once every two weeks, prohibiting the forcing of employees to purchase merchandise, and imposing penalties for violations.

Questions (Commonwealth Act No. 303)

Every employer must pay salaries and wages at least once every two weeks or one-half month.

Only when it is impossible due to force majeure or causes beyond the employer’s control, or when the Secretary of Labor grants an exemption after proper inquiry due to the business exigencies.

No employer may be authorized to pay with less frequency than once a month.

The employer must establish a store within or near the business premises where employees can conveniently buy foodstuffs and other articles of prime necessity at cost and on credit, payable at the following payday.

No. CA 303 prohibits forcing, compelling, or obliging employees to purchase merchandise, commodities, or personal property from the employer or any other person.

No. CA 303 prohibits paying wages wholly or partly by means of tokens, tickets, chits, or objects other than legal tender currency of the Philippines.

It prohibits negotiating directly or indirectly through chits/tickets that represent loans or sums paid in advance for salary or wages that are not yet due at the time of issuance of the tokens/chits/tickets.

Any such contract, whether verbal or written, is null and void.

Failure to pay as required is prima facie considered a fraud committed by the employer against the employee by means of false pretenses similar to those in Article 315(4)(a)(2) of the Revised Penal Code, punishable in the same manner.

For each offense: a fine of not more than PHP 2,000, or imprisonment up to two years, or both, at the discretion of the court.

The manager, or in his default, the person acting as such when the violation took place.

The head of the office, except when shown that the violation was due to an act or omission of some other person over whom the head has no control; then that person is held responsible.

The law applies to every employer, including the head of every government office, whether national, provincial, or municipal.

It aims to protect employees and laborers from exploitative wage payment practices, including withholding wages through non-legal-tender instruments and preventing employer control over employees’ purchases.

Upon its approval, i.e., June 9, 1938.


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