Short answer. Usually not. The Labor Code forbids an employer from requiring deposits from which deductions will be made to reimburse loss of or damage to tools, materials or equipment it supplied. The exception is narrow — trades where the practice is recognized, or where labour regulations allow it.
What the law says
No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer
Labor Code, Article 114 — Deposits For Loss Or Damage. Read the full provision →
The exception is about the industry, not about your employer's convenience
Employers who take deposits almost always have a reason that sounds fair — the equipment is expensive, workers have lost items before, the bond keeps everyone careful. None of that is the test. The law lifts the ban only where the employer is engaged in such trades, occupations or business where the practice of making deductions or requiring deposits is a recognized one, or where it is necessary or desirable as determined by the Secretary of Labor and Employment in appropriate rules and regulations. Recognized means recognized in the industry, not adopted by this company. A firm that started collecting bonds last year has not created a recognized practice, and a clause in your employment contract does not supply what the statute requires.
Even a lawful deposit is not a fund the employer may dip into
Where a deposit is validly required, it does not become the employer's money. It is held against a specific, proven loss. That means an employer wanting to deduct should be able to show what item was lost or damaged, that it was in your custody, what it was actually worth, and that you were responsible — not merely that stock came up short at inventory. Deducting from every worker's bond to cover an unexplained shortage, or applying the bond to something unrelated such as a training cost or a customer complaint, is outside what this article permits. Ask for the computation and the supporting documents in writing, and keep the payslips showing what was taken and when.
Getting the money back
A deposit is refundable once the reason for holding it ends. When you resign or are separated and have returned the tools and equipment issued to you, there is no longer anything for the deposit to answer for, and it should form part of what is released to you. Get an itemised clearance or acknowledgment listing every item returned, dated and signed — that document is what defeats a later claim that something went missing after you left. If the employer refuses to refund, the claim is for money unlawfully withheld and may be raised with the Department of Labor and Employment or the National Labor Relations Commission, subject to the time limits that apply to money claims.
What the provision does not decide
This article is about deposits — money collected in advance from the worker. It does not answer the separate question of whether an employer may recover an actual, proven loss from an employee at all, which involves the general rules on wage deductions and on liability for negligence. Nor does it excuse a worker who genuinely destroyed or made off with company property. What it does is stop employers from shifting the ordinary risks of the business onto the workforce by holding wages hostage in advance. Whether a particular arrangement falls within the recognized-practice exception depends on the trade and on the applicable regulations.