Dear Attorney,

I am writing to seek your legal advice regarding a situation with my former employer. I recently discovered that my employer failed to remit my contributions to various government agencies, including SSS, Pag-IBIG, and PhilHealth, for 11 months during my employment. I only found out about this upon reviewing my records after leaving the company.

What documents and evidence should I gather to file a complaint or take legal action against my former employer? How can I ensure that my rights are protected under Philippine labor laws?

Thank you for your time and assistance. I hope to receive your guidance on how to proceed with this matter.

Sincerely,
A Concerned Former Employee

Philippine Law on Non-Remittance of Government Benefits: What You Need to Know

In the Philippines, employers are required by law to remit employees' contributions to key government agencies such as the Social Security System (SSS), the Home Development Mutual Fund (Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth). These contributions are deducted from an employee's salary, and the employer is obligated to forward them to the respective agencies. Unfortunately, some employers fail to remit these amounts despite making deductions from employees' wages, resulting in serious violations of labor rights.

In this legal article, we will discuss the remedies available to employees whose employers fail to remit government contributions. We will also go over the types of documents and evidence necessary to initiate legal action, the relevant laws that protect workers in this regard, and the legal options you may explore to hold employers accountable.

Legal Obligations of Employers Under Philippine Law

Employers in the Philippines are mandated to remit employee contributions to the following government institutions:

Social Security System (SSS): SSS coverage is mandatory for all employees, including private sector workers and domestic helpers. The employee and employer both contribute to the fund, and the employer is responsible for remitting these contributions to the SSS.
PhilHealth: The employer is responsible for the deduction and remittance of PhilHealth premiums, which fund the health insurance of employees. This is crucial in ensuring employees have access to affordable healthcare services.
Pag-IBIG (Home Development Mutual Fund): This agency provides housing loans and other financial benefits to employees. Similar to SSS and PhilHealth, the employer must deduct a portion of the employee’s salary and remit it, along with the employer’s share, to Pag-IBIG.

Failure to remit these contributions violates the employees' rights and may subject the employer to both civil and criminal liabilities.

The Laws Protecting Employees

Social Security Law (Republic Act No. 8282): Under this law, employers must register their employees with the SSS and remit both employer and employee contributions regularly. Failure to do so constitutes a violation and can result in penalties.
PhilHealth Law (Republic Act No. 7875, as amended by Republic Act No. 10606): Similar to the SSS law, employers are required to ensure that contributions to PhilHealth are remitted on time. Non-remittance is subject to fines and penalties.
Pag-IBIG Law (Republic Act No. 9679): This law mandates that employers deduct and remit the required contributions for Pag-IBIG. Non-compliance can result in administrative penalties, interest, and even criminal charges.

Documents and Evidence Needed to Support a Legal Case

To pursue a legal case or file a formal complaint against a non-compliant employer, it is crucial to gather specific documents and evidence that demonstrate the employer’s failure to remit your contributions. Here are the key documents you will need:

Payslips: Payslips are essential pieces of evidence, as they will show that deductions for SSS, Pag-IBIG, and PhilHealth were made from your salary. It’s important that your payslips reflect the contributions deducted each month.
Employment Contract: Your employment contract can serve as evidence of your period of employment and the agreed-upon benefits, including the statutory contributions your employer was obligated to deduct and remit.
Certificate of Employment (COE): A COE may also be used to establish the duration of your employment. It’s helpful if your COE explicitly states that your employer was supposed to remit contributions to government agencies on your behalf.
Government Contribution Records:
- For SSS, you can request a copy of your contribution records through the My.SSS portal or by visiting an SSS branch. These records will indicate the months during which your employer failed to remit your contributions.
- For PhilHealth, you may check your premium contributions online through the PhilHealth Member Portal or by visiting a PhilHealth office.
- For Pag-IBIG, you can check your contributions by logging into the Virtual Pag-IBIG portal or by requesting records from a Pag-IBIG branch.
Written Communications: If you raised concerns with your employer about the non-remittance of benefits, any emails, letters, or text messages can serve as supporting evidence.
Affidavit of Complaint: Once you have gathered the necessary evidence, you may file a formal complaint with the relevant government agencies or a labor arbiter. The affidavit will outline your claims and present the supporting documentation.

Remedies Available to Employees

Employees whose contributions were not remitted by their employer have several options under Philippine law. These options include filing complaints with government agencies, initiating legal action, or seeking mediation. Here’s an in-depth look at the remedies available:

Filing a Complaint with Government Agencies:
- SSS: You may file a complaint with the SSS, which can impose penalties on the employer for failing to remit contributions. The SSS can also initiate collection proceedings against the employer.
- PhilHealth: If PhilHealth contributions were not remitted, you can report the non-compliance to PhilHealth, which can impose penalties and take legal action to recover the unpaid contributions.
- Pag-IBIG: Similar to SSS and PhilHealth, you may report the non-remittance of Pag-IBIG contributions. The agency can initiate proceedings to collect the unpaid amounts and impose fines.
Filing a Complaint with the Department of Labor and Employment (DOLE):

If the employer refuses to comply with their obligations after repeated requests, you may file a complaint with DOLE. The department has the authority to mediate between the parties, enforce compliance, and impose penalties on the employer for violating labor laws.
Filing a Case with the National Labor Relations Commission (NLRC):

You may also file a case with the NLRC, especially if the non-remittance of contributions resulted in financial losses or hardships for you (e.g., denial of SSS or PhilHealth benefits when you needed them). The NLRC has jurisdiction over disputes involving employer-employee relations, including claims for unpaid benefits.
Criminal Liability of Employers:

Employers who willfully fail to remit contributions may face criminal charges. For example, under the SSS law, employers who fail to pay contributions may be fined or imprisoned for up to 12 years, depending on the severity of the violation.

In People of the Philippines vs. Arnulfo Baylon, the Supreme Court upheld the conviction of an employer for failing to remit SSS contributions, emphasizing the importance of timely and full compliance with contribution requirements.
Civil Liabilities:

In addition to facing administrative and criminal penalties, employers may also be held civilly liable for damages if their failure to remit contributions caused harm to the employee. For example, if an employee was unable to claim SSS benefits due to the employer’s non-compliance, the employee may file a civil suit for damages.

Steps to Take When Filing a Complaint

Notify the Employer: Before escalating the matter to the authorities, you may want to inform the employer in writing about their failure to remit contributions. Sometimes, employers may be unaware of the oversight or may remedy the situation without the need for legal action.
File a Complaint with Government Agencies: If the employer refuses to comply, file a complaint with SSS, PhilHealth, and Pag-IBIG, providing all necessary documents and evidence.
Seek Legal Assistance: If the employer continues to ignore the issue, consider seeking legal assistance. A lawyer can help you prepare the necessary documents and represent you in administrative or legal proceedings.
File a Case with the NLRC: If negotiations fail and you suffer financial loss due to the employer’s non-compliance, you may file a formal case with the NLRC. The case will be resolved through arbitration, and the NLRC has the authority to issue decisions and impose penalties.

Conclusion

In the Philippines, the failure of employers to remit employee contributions to government agencies is a serious violation of labor laws. Employees have the right to pursue legal action and hold employers accountable. To successfully file a complaint, it is crucial to gather the necessary documents, including payslips, employment contracts, government contribution records, and written communications. Several remedies are available, including filing complaints with government agencies, seeking mediation through DOLE, or filing a case with the NLRC.

Ensuring the protection of your rights requires careful documentation and a thorough understanding of the legal process. By taking the proper steps and seeking legal advice when necessary, you can address this issue and secure the benefits to which you are entitled.