What happens if an employer does not pay SSS and PhilHealth contributions?
In the Philippines, employers are legally required to remit contributions to the Social Security System (SSS) and the Philippine Health Insurance Corporation (PhilHealth) on behalf of their employees. Failure to comply with these obligations can result in serious legal consequences.
The Social Security Act of 2018 (Republic Act No. 11199) governs the administration and collection of SSS contributions. This law mandates that employers deduct the appropriate SSS contributions from their employees' salaries and remit these, along with their counterpart contributions, to SSS. If an employer fails to remit these contributions, they are liable to pay the contributions themselves, along with a penalty of three percent per month for each month of delay.
Similarly, under the Universal Health Care Act (Republic Act No. 11223), employers are required to contribute to PhilHealth for their employees. Non-compliance with PhilHealth contributions can also result in penalties, including interest on delayed payments, and potential legal action.
When an employer neglects or refuses to pay these contributions, employees may file a complaint directly with the SSS or PhilHealth. Both agencies are equipped to conduct investigations and enforce collection. Additionally, employees may seek legal redress through the Philippine legal system, where they can claim not only the unpaid contributions but also damages.
The legal process typically begins with a complaint filed by the affected employee or by the SSS or PhilHealth against the non-compliant employer. The case can be brought before the courts, and if the employer is found guilty, they may face fines, and legal sanctions, and be compelled to make the outstanding payments.
It's important for employers to understand that these contributions are not merely deductions from employee wages, but are mandatory legal obligations. They are designed to ensure that employees are covered for social security benefits and health insurance. Employers should also be aware that conscientious compliance with these laws is not only a matter of legal necessity but also a reflection of their commitment to the welfare of their employees.
For employees, it is crucial to regularly check if their contributions are being remitted properly. Both SSS and PhilHealth provide online systems where members can check their contribution history. Should discrepancies arise, employees should immediately report these to their employer or directly to the respective agency.
This issue is a significant aspect of labor law in the Philippines and demonstrates the government's commitment to protecting worker rights and welfare. Employers must ensure compliance to avoid legal consequences and to foster a responsible and supportive working environment.