Employer Non‑Remittance of SSS Contributions: Employee Rights in the Philippines
(A comprehensive legal primer; updated to the Social Security Act of 2018 — Republic Act No. 11199)
1. Why SSS Contributions Matter
The Social Security System (SSS) is the Philippines’ compulsory social‑insurance program for private‑sector employees (and certain self‑employed and voluntary members). Monthly contributions are shared:
| Party | Ordinary Employee (Private Sector) | Household Worker (Kasambahay) | OFW |
|---|---|---|---|
| Employee share | 4.5 % of MSC* | None if wage ≤ ₱5 000 | 4.5 % of MSC |
| Employer share | 8.5 % of MSC | Entire 13 % | 8.5 % of MSC |
*MSC = Monthly Salary Credit, capped annually by SSS (₱30 000 MSC in 2025).
Failure to remit deprives workers of cash benefits (sickness, maternity, disability, unemployment, retirement, death/funeral) and loan eligibility.
2. Legal Framework
| Instrument | Key Sections Relevant to Non‑Remittance |
|---|---|
| RA 11199 (Social Security Act of 2018) | §§ 18–28, 31, 38, 46 |
| SSS Rules of Procedure (2022) | Part II (Compulsory Coverage); Part V (Distraint & Levy) |
| Labor Code (PD 442, as amended) | Art. 128 (Visitorial & Enforcement Power), Art. 303 [288] (Prescription) |
| Rules on SEnA (DOLE D.O. 107‑10) | Quick‑Response mediation for coverage issues |
| RA 9903 (2009 Condonation Law) & periodic condonation circulars | Amnesty on penalties (does not erase civil/criminal liability) |
| Relevant Jurisprudence | People v. Dizon (G.R. 200436, 30 Jan 2019); SSS v. Moonlight Plastic (G.R. 170374, 24 Apr 2009); Sesbreño v. CA (G.R. 89252, 13 Jan 1992) |
3. Employer Duties Under RA 11199
- Register & Report. Within 30 days from first hiring.
- Deduct & Remit. Pay both shares on or before the last day of the month following the applicable month (electronic payments now mandatory for ≥ 10 employees).
- Keep Records. Payroll, contributions, Collection List (R‑3), and electronic payments must be preserved for 10 years.
- Post Compliance Notice. SSS Certificate of Registration at the place of business.
- Cooperate with Inspectors. Allow access to books under Art. 128, Labor Code, and §24, RA 11199.
4. What Constitutes Non‑Remittance?
| Situation | Legal Consequence |
|---|---|
| A. No deduction, no remittance | Entire contribution (both shares) + 2 % penalty per month until paid |
| B. Deducted from employee but not remitted | Estafa‑like misappropriation; trust funds doctrine applies; employer personally liable |
| C. Partial or late remittance | Same 2 % penalty on the unpaid portion |
| D. Failure to report employee | SSS treats employee as covered from date of actual employment; employer charged retroactively |
Trust‑Fund Doctrine (§ 20, RA 11199). Amounts deducted are conclusively presumed to be held in trust for SSS; they never become part of the employer’s assets.
5. Penalties & Liabilities
| Type of Liability | Statutory Basis | Range / Formula |
|---|---|---|
| Administrative (assessment, distraint, levy, garnishment) | §§ 25‑26, RA 11199 | Contribution + 2 % per month, no cap |
| Civil (unpaid contributions & damages) | § 25‑c, RA 11199; Art. 1159, Civil Code | Solidary liability of corporate officers; may be adjudged by SSS, DOLE‑RO, or NLRC |
| Criminal (Unlawful Acts) | § 28‑e, RA 11199 | Fine: ₱5 000 – ₱20 000 and/or Imprisonment: 6 yrs 1 day – 12 yrs (per count) |
Prescription: Criminal action may be filed within 20 years from commission (§ 28‑g). Civil assessments are imprescriptible while employer exists.
6. Employee Rights & Remedies
6.1 Immediate Steps
- Check your actual SSS contributions via My.SSS portal or mobile app.
- Secure proof of employment (pay slips, IDs, contracts) and of deductions (if any).
- Confront employer (optional). A demand letter often triggers compliance.
6.2 Administrative Remedies
| Forum | How to File | Outcome |
|---|---|---|
| SSS Branch | Accomplish Employer Delinquency/Violation Report (EDVR) or E‑Service complaint | SSS issues Billing and may impose distraint/levy |
| SSS Commission (SSC) | Appeal an adverse order of SSS within 15 days | Quasi‑judicial decision; further appeal to CA via Rule 43 |
| DOLE Regional Office | File under Art. 128 (Visitorial Power) or via SEnA for mediation | Labor Inspector may issue Compliance Order commanding remittance |
6.3 Judicial & Quasi‑Judicial Remedies
| Forum | Jurisdiction | Relief Obtainable |
|---|---|---|
| National Labor Relations Commission (NLRC) | Money claims arising from ER‑EE relationship if > ₱5 000 or paired with dismissal | Monetary equivalent of unremitted contributions; reinstatement of benefits |
| Regular Courts (Criminal) | Prosecutor files information under § 28‑e | Fine and/or imprisonment of employer and responsible officers |
| Small Claims (Civil) | If amount ≤ ₱1 M and purely monetary | Recovery of deducted share; rare, because SSS usually handles |
7. How SSS Enforces
- Pre‑Assessment Notice (PAN) → employer has 15 days to contest.
- Billing Letter of Assessment (BLA) → 30 days to pay or request reconsideration.
- Warrant of Distraint, Levy & Garnishment (WDLG) → attaches bank deposits, receivables, and movable/immovable property.
- Auction Sale → Proceeds applied to delinquency; surplus returned.
Note: The BIR honors SSS warrants like tax warrants; banks must comply within 15 days (§ 26, RA 11199).
8. Effect on Benefits
Even if contributions were never remitted, SSS must still pay rightful benefits once employment is proven, then collect from the employer (§ 18 b). Thus, never delay filing a benefit claim because of employer delinquency.
9. Corporate‑Officer Liability
The Supreme Court has consistently pierced the veil where officers actively decide not to remit:
- People v. Dizon (2019). Corporate president convicted; the defense of “company in distress” rejected.
- SSS v. Moonlight Plastic (2009). Treasurer solidarily liable for 2 % monthly penalty.
10. Special Situations
| Scenario | Treatment |
|---|---|
| Business closure or bankruptcy | Liability survives; assets may be levied before liquidation. |
| Change of business name/ownership | Successor‑employer liable if it is a merger, consolidation, or asset sale in bad faith. |
| OFWs hired through agencies | Agency is deemed employer for SSS purposes; principal may be subsidiarily liable. |
| Kasambahay with wages ≤ ₱5 000 | Entire 13 % contribution is employer’s responsibility; failure to remit is actionable. |
| Government Project Contractors | DPWH/other agencies withhold percentage of progress billings pending SSS clearance. |
11. Penalty Condonation Programs
Congress periodically enacts condonation laws (e.g., RA 9903) and SSS Board issues corresponding circulars. These waive the 2 % penalty but never the principal contributions. Employees should still press for payment, because condonation often requires a full settlement plan.
12. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Can I stop SSS deductions if my employer isn’t remitting? | No; coverage is compulsory. Demand compliance instead. |
| Do I lose credit for the months not remitted? | No; once proven employed, those months count toward eligibility. |
| What is the 2 % penalty’s upper limit? | None. It compounds monthly until fully paid. |
| How long do SSS cases usually take? | Administrative assessment: 3–6 months; criminal prosecution: 2–5 years. |
| Can I sue for moral damages? | Yes, in civil court if you can prove bad‑faith withholding caused injury. |
13. Practical Tips for Employees
- Enroll in My.SSS and download your Contribution History every quarter.
- Keep pay slips and job contracts for at least 10 years.
- Use SEnA first. Many cases settle within 30 days.
- If employer is closing, immediately alert SSS so it can garnish assets before they disappear.
- Coordinate with co‑workers. A group complaint carries more weight and may trigger criminal action.
14. Compliance Checklist for Employers (For Reference)
- □ Register employees within 30 days of hiring
- □ Use SSS Payment Reference Number (PRN) monthly
- □ Remit on or before the last day of the following month
- □ Submit Electronic Collection List (R‑3) on time
- □ Display Certificate of Registration on premises
- □ Keep payroll and remittance records for 10 years
- □ Cooperate with DOLE/SSS inspectors
15. Conclusion
Non‑remittance of SSS contributions is not a mere bookkeeping lapse; it is a serious statutory offense that exposes employers — and their officers — to administrative assessments, civil damages, and criminal prosecution. More importantly, it threatens employees’ social‑security safety net.
Filipino workers should vigilantly monitor their contribution records and assert their rights through the SSS, DOLE, and the courts. The law ultimately ensures that benefits will be paid, but timely action preserves evidence and maximizes recovery. Meanwhile, employers safeguard themselves not by evading contributions, but by embedding robust payroll compliance as a core business practice.