SSS Sickness Benefit Non-Compliance: Employer’s Refusal to Release Payment

Below is a comprehensive discussion of the Social Security System (SSS) Sickness Benefit in the Philippines—focusing especially on employer non-compliance and refusal to release payment. This guide is based on the current legal framework, primarily the Social Security Act of 2018 (Republic Act No. 11199) and its Implementing Rules and Regulations (IRR). It also draws on pertinent government issuances and administrative guidance from SSS.

1. Overview of the SSS Sickness Benefit

The SSS Sickness Benefit is a daily cash allowance granted to covered SSS members who are unable to work due to sickness or injury. It is designed to provide financial support during a temporary incapacity to earn a living.

Key Points:

  • It is payable for a maximum of 120 days in one calendar year.
  • The amount is equivalent to 90% of the member’s average daily salary credit (subject to SSS guidelines).

2. Legal Basis

  1. Social Security Act of 2018 (R.A. 11199)

    • Section 14 of R.A. 11199 covers sickness benefits, among others. This law superseded the older SSS law (R.A. 8282) and consolidated all provisions relating to the benefits of SSS members.

  2. Implementing Rules and Regulations (IRR) of R.A. 11199

    • Details the procedure for filing, the obligations of both employers and employees, deadlines, documentation requirements, and penalties for violations.

  3. SSS Circulars and Advisories

    • From time to time, the SSS issues circulars clarifying administrative procedures and reinforcing guidelines related to the sickness benefit claim process.

3. Eligibility and Conditions for Claim

To qualify for the SSS Sickness Benefit, a member must meet the following conditions:

  1. Paid Contributions

    • The member must have made at least three (3) monthly contributions within the 12-month period immediately before the semester of sickness or injury.

  2. Four (4) or More Days of Incapacity

    • The illness or injury must result in at least four (4) consecutive days of absence from work (including rest days, official holidays, and weekends).

  3. Proper Notification

    • The employee must notify the employer within five (5) calendar days from the start of the sickness or injury, or as soon as practicable if not possible within that time frame.
    • In cases where the employee is separated from employment or is a voluntary member, the member notifies the SSS directly within five (5) days.

  4. Remaining Sick Leave Credits

    • If an employee has company sick leave credits, the employer normally uses up these credits first before availing of the SSS Sickness Benefit. However, company policy on sick leaves may vary. Once sick leave credits are exhausted (or if the employer chooses to allow SSS sickness benefit first), the SSS Sickness Benefit applies.

4. How the SSS Sickness Benefit Is Paid

One unique characteristic of the SSS Sickness Benefit is the “employer’s advance payment” scheme:

  • Employer Advances the Benefit: The employer is responsible for paying the daily sickness allowance (i.e., the cash benefit) to the employee in advance every regular payday.
  • Employer Reimbursement by SSS: After paying the employee, the employer then files for reimbursement from the SSS for the amount advanced, provided all conditions are met and required documents are submitted on time.

This system ensures that the employee does not experience a delay in receiving financial assistance while unable to work.

5. Employer Obligations

Under Philippine law, employers have specific obligations to facilitate the release of the SSS Sickness Benefit:

  1. Advance Payment

    • The employer must timely remit the sickness benefit to the employee for every day of qualified incapacity from work.

  2. Accurate Filing

    • The employer must submit a sickness benefit reimbursement application (through the My.SSS online portal or via manual filing, as applicable) with complete supporting documents (e.g., medical certificate) to the SSS within the prescribed deadlines.

  3. Facilitation of Medical Certification

    • If required, the employer should help the employee secure proper medical certification to substantiate the claim.

  4. Contribution Compliance

    • The employer must be updated in remitting monthly contributions to SSS for its employees. A lapse in contribution might affect the employee’s eligibility and hamper the reimbursement process.

6. Non-Compliance: Employer’s Refusal to Release Payment

6.1 Common Reasons for Refusal

Employers sometimes refuse to release the sickness benefit payment, citing various justifications. Common scenarios include:

  1. Financial Constraints

    • Employer claims lack of funds to advance the benefit.

  2. Misunderstanding of the Law

    • Employer incorrectly believes they have no duty to pay out-of-pocket before getting reimbursed by SSS.

  3. Unclear Company Policy

    • Employer insists the employee should use all available sick leaves and then denies or delays SSS claims without a proper basis.

  4. Outright Bad Faith

    • Employer intentionally withholds the benefit as a form of retaliation or cost-saving measure.

6.2 Legal Implications of Refusal

Refusing or failing to release the sickness benefit can expose the employer to:

  1. Violation of R.A. 11199

    • The law explicitly mandates employers to advance the employee’s sickness benefit. Failure to comply may be deemed a violation of the Social Security Act and its IRR.

  2. Administrative Sanctions by SSS

    • The SSS can impose fines and penalties on non-compliant employers.
    • Continual refusal or non-compliance can result in higher fines and possible criminal charges in extreme cases.

  3. Labor Complaints

    • Employees may file complaints with the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC) if the employer’s refusal forms part of an illegal deduction or withholding of benefits.

  4. Civil and Criminal Liability

    • Chronic failure to remit SSS contributions and benefits may lead to criminal prosecution under the Social Security Act.
    • Offenders can face imprisonment and substantial fines if found guilty of violating SSS law provisions.

7. Steps an Employee Can Take in Case of Employer Refusal

When an employer refuses to release the SSS sickness benefit, the affected employee should consider the following steps:

  1. Formal Written Demand

    • Send a letter requesting the employer to comply with the SSS law.
    • Keep records of all correspondences.

  2. Verify SSS Contributions

    • Check personal records on the My.SSS portal or request a static information printout from an SSS branch.
    • Ensure that your contributions are up-to-date.

  3. File a Complaint or Inquiry with SSS

    • Visit or contact the SSS to report non-compliance. The SSS may call the employer’s attention or conduct an inspection or investigation, especially if the employer is also delinquent in remitting contributions.

  4. Seek DOLE or NLRC Assistance

    • If the employer persists in non-compliance, the employee can file a complaint with the DOLE for labor standards violations.
    • If the dispute escalates, the National Labor Relations Commission (NLRC) can hear the case for money claims or benefits due under labor laws.

  5. Consult a Lawyer or Labor Rights Advocate

    • If the situation becomes complex or the employer is retaliating, legal counsel can help the employee explore more formal legal remedies, including claims for damages.

8. Possible Penalties and Remedies

8.1 Penalties for Employers

Under the Social Security Act and its IRR, employers found guilty of violating SSS regulations may face:

  1. Fines

    • Monetary penalties imposed by SSS for delinquent remittances and non-compliance.
    • The exact amounts vary depending on the number of employees affected, the duration of the delinquency, and other aggravating circumstances.

  2. Criminal Prosecution

    • For willful and repeated violations, the employer, company officers, or responsible persons can be held criminally liable.
    • Imprisonment of up to 12 years can be imposed for serious offenses, along with large fines.

8.2 Remedies for Employees

  1. Back Payment of Benefits

    • The employer will be ordered to pay the withheld sickness benefit, plus any applicable penalties.

  2. Damages and Attorney’s Fees

    • If the case progresses to labor arbitration or civil litigation, employees may seek moral and exemplary damages, plus attorney’s fees, if bad faith is proven.

  3. Restitution via SSS

    • SSS can directly pay the sickness benefit to the employee if the employer is insolvent or otherwise unable/unwilling to release funds, subject to specific legal and administrative procedures.

9. Best Practices to Avoid Disputes

  1. Maintain Open Communication

    • Employers should clearly explain company policies on sick leave and SSS coverage to avoid confusion.
    • Employees should promptly notify employers of illnesses or injuries and submit complete medical documentation.

  2. Timely Filing

    • Employers must file the reimbursement claim with SSS within the prescribed period (currently, within five (5) days after the employee’s notification or the end of the employee’s confinement, whichever is later).
    • Late filing can lead to denial of reimbursement, which then creates friction when the employer refuses to advance the benefit.

  3. Keep Updated Employee Records

    • Employers should track each employee’s average daily salary credit, used leaves, and SSS coverage status to swiftly process sickness benefit claims.
    • Employees should also monitor their own contribution records.

  4. Establish Clear Internal Guidelines

    • Written company manuals or HR guidelines about SSS benefits, including the process of claiming them, help prevent misunderstandings.
    • Proper training of HR and accounting staff is crucial.

10. Conclusion

In the Philippines, the SSS Sickness Benefit is a critical form of social security protection that helps employees cope financially during periods of temporary incapacity. Employers are legally obligated under the Social Security Act (R.A. 11199) to advance the benefit to qualified employees and then claim reimbursement from the SSS. Any refusal to release these funds constitutes non-compliance, risking fines, civil liability, and even criminal prosecution for employers.

For Employees:

  • Know your rights under the law.
  • Notify your employer and the SSS of any sickness or injury within the required timelines.
  • Keep documentation of your employer’s refusal and consider reaching out to SSS or labor authorities if the issue persists.

For Employers:

  • Understand your responsibilities to advance sickness benefits.
  • File for timely reimbursement from SSS to recoup the advanced amounts.
  • Maintain accurate records and good communication to avoid penalties, disputes, or litigation.

Ultimately, proper adherence to the SSS rules ensures that employees receive prompt financial assistance during times of sickness or injury, while allowing employers to fulfill their legal obligations and later recover the amounts from the SSS.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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