(SPOT.ph) Marketing manager Harold halved his final pay between a small business and a dream vacation, that way he can invest in the future while recover from five years of overwork.
Like many corporate workers who joined "The Great Resignation", the 26-year-old is getting a one-time financial windfall that they can either spend wisely or recklessly. The last paycheck usually covers a month's salary, pro-rated bonuses and unused leaves when appropriate.
“Medyo matagal ko kasing pinaghirapan at hinintay din yung final pay. So I really think it’s best to use it for something that I can use for my future,” Harold said.
Managing one's final paycheck is important, especially since it's the fruit of weeks, even months of clearances and e-mail follow ups, said human resources manager Michelle Morales.
“Meron ka pa rin namang ibibigay for yourself, pero make sure lang na meron ka ring portion na ia-allot for investment be it for financial investment or developmental investment,” she said in an interview.
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What is final pay and what does it include?
The final pay includes all the earnings due to the employee that have not been given yet at the time of resignation. It’s the amount that is held by the company for a certain period of time to ensure that the resigning employee is cleared of accountabilities before being let go.
Aside from the last salary, the final pay also includes the cash conversion of the unused leaves of the employee, as well as allowances and bonuses if there are any, Morales said.
Also included in the final pay are pro-rated amounts of the 13th month pay, which is given if the employee resigns before the year ends. Tax refunds are also given in the final pay, which is the amount withheld by the company for the payment of the employee’s income tax, she added.
The final pay can also include deductions which the company uses to pay for accountabilities and damages that the employee may have incurred in their company-issued equipment and facilities, Morales said.
When should the company issue the final pay?
The Department of Labor and Employment recently issued an advisory which states that an resigned employee’s final pay must be given within 30 days after separation.
However, if the company cannot issue the final pay within the said period, it should inform the employee of the timeline of its release, Morales said.
“Magse-set dapat si company ng clear process flow including turnaround time, para kahit paano nami-meet yung expectation… Kasi if hindi yun clear, talagang mangyayari yan na aabot ng three months, aabot ng matagal talaga,” she said.
“Sa side din naman ni employee, dapat responsible enough din siya to really ensure na nakapag-turnover siya nang maayos, na-complete niya yung clearance process niya, wala siyang accountability, madali siyang ma-reach,” she added.
How to spend your final pay wisely
When employees receives a huge sum of money, their immediate reaction more often than not is to spend it for food, shopping, and other expenses. For Morales, however, it’s wise to use the final pay for things that will help one grow money-wise and career-wise.
For those who are unsure how to spend their final pay, Morales gave the following suggestions:
Make your money grow
One way to grow the money you received from your final pay is through investing it, either through getting an insurance or stocks. This way, you will be able to double or triple the amount and use it for essential expenses in the future, Morales said.
“Make sure na merong pupuntahan na investment na kung saan in the future mapapakinabangan mo siya,” she added.
Invest in yourself
It’s also good to spend some of the money for professional growth. You may use the amount to get into graduate studies, or attend online classes, so you can develop new skills and gain more knowledge relevant to your chosen career path, Morales said.
“Investment din yun for yourself para kung halimbawang wala ka pang malilipatan, at least masasabi mo na hindi ka nag-stop to learn because you attended these specific learning sessions,” she said.
Lastly, don’t forget to enjoy and reward yourself after working for so long in your previous company. You deserve it, so don’t deprive yourself of that joy.
“Ginagawa ko rin ito na meron akong binibili for myself. Parang katas ng trabaho. Pero that's the least na, priority pa rin yung investment for the future,” Morales said.
In case of delay, how can you follow up?
While there is a guideline from DOLE on the release of the final pay, delays may still occur especially that an employee’s clearance go through the different departments of the company to check whether there are accountabilities that need to be settled.
If you haven’t received your final pay more than two or three months after resignation, Morales said you should write a letter to your company asking for a timeline for its release and how you can settle your accountabilities, if there are any.
“Kung pwedeng mag-visit sa office, pwede rin naman yun para mag-follow up din. If hindi pa rin talaga, walang response, of course yung pinaka-last resort talaga ay yung pag-file ng complaint,” she said.
At the end of the day, the most effective way to facilitate the speedy release of the final pay is a two-way communication between the employer and the employee.
“Sa side ng mga former employees, try to communicate din and inform them na nagfo-follow up ka talaga. You’re not actually asking for higher, you are just asking what is due for you,” she said.
“Sa employer side naman, it's really time to make a clearer process with turnaround time,” she added.
Michelle Morales is a psychometrician, human resources manager, and co-founder of Leading with Success, an eLearning company which aims to infuse positivity in the workplace.