Employer Failure to Remit SSS Contributions in the Philippines: Legal Framework, Liabilities & Remedies
(updated to the Social Security Act of 2018 — Republic Act No. 11199)

1 | Why the Issue Matters

The Social Security System (SSS) provides the private-sector counterpart of the GSIS. Monthly contributions keep employees insured for sickness, maternity, disability, retirement, unemployment, and death benefits. Because contributions are collected through employers, an employer’s failure to remit jeopardises both the employee’s social-insurance coverage and the employer’s own criminal and civil exposure.

2 | Employer’s Core Duties

Duty	Statutory Basis	Key Details
Register employees & report new hires	RA 11199, §24(a) & SSS Circular 2019-14	Within 30 days from first day of work; use R-1A or the online R3 facility.
Withhold correct premiums	RA 11199, §18	Rate in 2025: 14 % of MSC (Monthly Salary Credit) up to ₱30,000, split 9.5 % employer / 4.5 % employee.
Remit on time	RA 11199, §22(a) & SSS Circular 2021-02	On or before the last day of the month following the applicable month (e.g., January contributions → last day of February). Electronic Collection System (ECS) or OTC-banks/G-Cash accepted.

3 | What Constitutes “Failure to Remit”

Non-Registration of the enterprise or its workers.
Under-deduction or non-deduction of the employee share.
Failure to transmit the collected amounts within the statutory deadline.
Fractional remittance (remitting less than the Schedule of Contributions).

4 | Administrative & Monetary Penalties

2 % a month penalty (compounded) from due date until fully paid (RA 11199, §22(e)).
SSS collection service fee (1 %) if employer’s bank rejects the payment.
Refusal or delay triggers SSS “Warrant of Distraint, Levy & Garnishment” (WDLG) authority (id., §25) — similar to BIR powers:
- Distraint of personal property.
- Levy on real property.
- Garnishment of bank deposits and receivables.
No SSS Clearance, BIR Tax Clearance, or PhilGEPS eligibility for government bidding until arrears are settled.

5 | Criminal Liability

Offence (RA 11199, §28(e))	Penalty
Failure or refusal to register employees, deduct or remit contributions, or submit required reports	Fine: ₱5,000 – ₱20,000 and/or Prison: 6 years & 1 day to 12 years (prision mayor).
Misappropriation or conversion of contributions	Same range, plus separate prosecution under the RPC for estafa.
Commission by a corporate officer	Penalty attaches personally to the president, GM, managing partner, or any person in control of remittances.

Prescription: 20 years from commission or discovery, whichever is later (id., §28-A).

Who may file: SSS, DOLE, or even an aggrieved employee may initiate a complaint-affidavit in the Office of the City/Provincial Prosecutor.

6 | Civil & Collection Remedies

Assessment & Demand Letter. SSS Field Inspector issues a Preliminary Assessment Notice (PAN); employer has 15 days to contest.
Final Assessment & Demand (FAD). Becomes final if not protested within another 15 days.
WDLG / Court Action.
Third-Party Liability. Persons who aided the violation (e.g., treasurers, payroll masters, accountants) may be solidarily liable.
Priority in Insolvency. Under the Financial Rehabilitation and Insolvency Act (FRIA, RA 10142, §169), SSS claims rank with taxes and thus enjoy preference over unsecured creditors.

7 | Remedies Available to Employees

Remedy	Forum	Outcome
File a delinquency complaint	Nearest SSS branch (Special Investigation Dept.)	SSS investigates, assesses, and may sue employer; employee testimony often suffices.
Money claim for unremitted contributions	National Labor Relations Commission (NLRC) or DOLE Regional Arbitration Branch	Decision ordering employer to pay equivalent contributions plus 10 % legal interest and moral damages if bad faith is proven.
Avail SSS benefits despite non-remittance	SSS benefits desk	SSS grants benefits as if contributions were paid (coverage is by operation of law); later back-charges the employer (RA 11199, §22-A).
Collective action / grievance	Through the union (if any)	May form part of collective bargaining negotiation or grievance machinery.

8 | Grace Measures for Employers

Penalty Condonation or Restructuring
- RA 9903 (2010) and §4(b)(4) of RA 11199 allow the SSS Commission to launch periodic condonation programs.*
- Typical terms: Waiver of 100 % penalty, partial condonation of interest, payment over 24-60 months.
Self-Assessment & Voluntary Disclosure
- Employers that approach SSS before any audit may negotiate lesser penalties.
Compromise Agreement under the ADR Rules of the SSS (2014).

9 | Noteworthy Supreme Court & Appellate Decisions

Case	G.R. No.	Ratio
SSS v. Moonwalk Dev. & Housing Corp. (1992)	100563	Corporate officers are personally liable for unremitted SSS premiums.
People v. Goce (2003)	144949	Good-faith allegation (financial losses) is not a defense; the law imposes strict liability.
People v. Pililla Rural Bank (2013)	180321	Bank’s board members solidarily liable; actual insolvency no defense.
Makati Haberdashery v. SSS (1988)	124043	Employee cannot waive SSS coverage; agreement to “forego contributions for higher salary” is void.
New Venture Mktg. v. Sanchez (NLRC) (2010)	CA-G.R. SP 108569	NLRC may award SSS contributions as part of money claims.

10 | Procedural Road-Map for an Aggrieved Employee

Step 1. Secure proof of employment (pay slips, IDs, emails) & absence of posted contributions (My.SSS online account print-out).
Step 2. File a written complaint at any SSS branch or via SSS E-Center → Employer Delinquency.
Step 3. If benefits are already due (maternity, sickness, etc.), submit benefit application with an affidavit narrating non-remittance. SSS processes claim and later sues employer.
Step 4. Parallel filing (optional) of a money-claim case before the NLRC/DOLE to recover the unpaid employee share, damages and attorney’s fees.
Step 5. Monitor case or cooperate as witness when SSS or prosecutor files criminal information.

11 | Defences Typically Raised by Employers (and Why They Fail)

Common Defence	Usual Outcome
“Employee was a project-based/independent contractor.”	Rejected if worker passes the four-fold test of employment; SSS coverage is compulsory regardless of employee’s awareness.
“Company was losing money.”	Financial loss not a legal excuse (strict liability).
“Contributions were eventually paid.”	Only mitigates penalty; does not extinguish criminal liability once information is filed.
“Clerical error / Force majeure / Pandemic closures.”	May justify penalty waiver during condonation periods but still requires full payment of principal contributions.

12 | Best-Practice Compliance Tips for Employers

Adopt a “first-deduct, first-remit” payroll rule; automate ECS uploads.
Reconcile SSS R-3 reports with the BIR Alphalist monthly.
Ask for SSS PRNs (Payment Reference Numbers) prior to the 10th day of each month.
Train payroll staff on new SSS circulars (e.g., evolving contribution rates: 14 % in 2025; scheduled to rise to 15 % in 2025 and to 15.5 % in 2026 under the step-up schedule).
Secure SSS Clearance annually to avoid last-minute issues in bids or M&A due diligence.

13 | Frequently Asked Questions

Will SSS still pay my maternity or disability claim if my employer never remitted?
Yes. SSS recognises constructive coverage; the benefit is processed, then SSS collects from the delinquent employer.
Can the corporate treasurer be jailed even if not a signatory to the SSS forms?
Yes. The law makes “any responsible officer who knowingly participated” liable (RA 11199, §28[e]).
Is compromise possible after an information is filed in court?
Only with court approval and usually after full settlement of contributions; the prosecutor may agree to provisional dismissal.
How long does SSS have to prosecute?
20 years from commission or discovery, whichever is later (RA 11199, §28-A).
Are household employers (kasambahay) covered by the same penalties?
Yes — failure to remit kasambahay contributions carries identical fines and imprisonment under the Kasambahay Law (RA 10361, §37).

14 | Key Take-Aways

Strict-liability offence. Intent is irrelevant; timely remittance is mandatory.
Multi-layer penalties. Administrative (2 %/mo), criminal (fine & jail), civil (damages, garnishment).
Employees are protected. Benefits can be claimed even when remittance is lacking.
Corporate officers are personally at risk. The “corporate veil” offers no shelter.
Compliance or condonation is cheaper than the cumulative penalties and reputational damage of delinquency.

Disclaimer: This article is for informational purposes only and does not constitute legal advice or create a lawyer-client relationship. Consult a qualified Philippine lawyer or the SSS Legal Affairs Division for advice on specific situations.