Dear Attorney,

I hope this letter finds you well. I am reaching out to seek your professional advice regarding an issue I am facing with my employer. Specifically, for the past two years, my employer has been deducting amounts from my salary for mandatory benefits contributions, yet no actual payments have been made to the respective agencies.

This issue affects my contributions to social security, health insurance, and other mandatory benefits. As of this date, I have not received any confirmation or proof of contributions being remitted to the relevant agencies, and I have verified that my accounts with these institutions reflect no payments made for the deductions my employer continues to take.

I am deeply concerned about the legal implications of this situation, my rights as an employee, and the steps I may take to ensure my contributions are properly remitted and my benefits protected. Could you kindly provide me with legal guidance on how to address this matter?

Thank you for your time and assistance. I look forward to your advice.

Sincerely,
A Concerned Employee

Legal Overview: Employer Obligations Under Philippine Law

In the Philippines, employers are mandated to comply with laws requiring deductions from employees' wages for benefits contributions and the corresponding remittance to respective government agencies. Below is a detailed discussion of the legal basis, violations, and remedies available in such cases.

1. Applicable Laws Governing Mandatory Contributions

Social Security Act of 2018 (Republic Act No. 11199):
- Employers are required to deduct the employee’s share of Social Security System (SSS) contributions from their payroll and remit both the employee’s and the employer’s shares to the SSS.
- Failure to remit contributions can result in penalties, interest, and criminal prosecution.
National Health Insurance Act of 2013 (Republic Act No. 7875, as amended):
- Employers must remit Philippine Health Insurance Corporation (PhilHealth) contributions, which are shared between the employer and the employee.
Home Development Mutual Fund Law of 2009 (Republic Act No. 9679):
- Contributions to the Pag-IBIG Fund are also mandatory and require employers to deduct from the employee’s wages and remit to the fund.
Labor Code of the Philippines:
- Article 116 prohibits employers from withholding wages, including unauthorized deductions.
- Article 113 specifies that deductions from wages are allowed only when required by law or with the written consent of the employee.

2. Legal Implications of Non-Remittance

Employers who fail to remit mandatory contributions after deducting them from an employee’s salary are committing serious violations. Below are the potential consequences:

Civil Liabilities:
- Employers are liable to pay the unremitted contributions with accrued penalties, which can include interest and fines.
Criminal Liabilities:
- Non-remittance is considered a criminal offense under various laws. For instance:
  - SSS Violations: Under the Social Security Act, failure to remit contributions may result in imprisonment of six (6) to twelve (12) years, along with a fine.
  - PhilHealth Violations: Employers may face criminal prosecution for failing to remit contributions.
Employee Entitlements:
- Employees retain the right to claim full benefits from these agencies, even if contributions have not been remitted. The government agencies may hold the employer accountable to cover the unpaid contributions to protect the employee’s rights.

3. Remedies Available to Employees

If an employer fails to remit mandatory contributions, employees may take the following steps:

File a Complaint with the Department of Labor and Employment (DOLE):
- Employees can file a complaint with DOLE for violations of labor standards. DOLE can order the employer to pay the unpaid contributions and impose penalties.
Report to the Specific Agency:
- SSS: Employees can report non-remittance to the nearest SSS office.
- PhilHealth: Employees may file a complaint at PhilHealth branches.
- Pag-IBIG Fund: Employees can submit a complaint to the Pag-IBIG Fund for non-remittance.
Initiate a Legal Action:
- Employees may pursue legal action against the employer for breach of obligations. This can include filing a case for unfair labor practices, breach of trust, or criminal charges for fraud.
Seek Assistance from a Labor Union or Legal Aid Group:
- Labor unions or legal aid organizations can help represent employees in filing cases and pursuing remedies.

4. Steps Employers Must Take to Rectify the Situation

Employers found guilty of non-remittance may avoid harsher penalties by taking the following steps:

Voluntary Compliance:
- Employers should immediately remit the unpaid contributions along with penalties.
Engage in Settlement:
- Employers may negotiate with employees to settle unpaid contributions and avoid legal escalation.
Improve Payroll Systems:
- Implementing robust payroll and compliance systems ensures timely remittance of contributions.

5. Statutory Deadlines and Penalties

Contributions are typically due monthly. Non-remittance within the prescribed period results in penalties:
- SSS: A 2% penalty per month on unpaid amounts.
- PhilHealth: Interest charges may apply on unpaid contributions.
- Pag-IBIG Fund: Penalties for late payments may include fines and interest.

6. Prevention and Protection for Employees

To prevent similar issues in the future, employees should:

Regularly check their contributions through online systems provided by SSS, PhilHealth, and Pag-IBIG.
Keep payroll slips and other records of deductions as evidence.
Report discrepancies immediately to the employer and relevant agencies.

Conclusion

The non-remittance of mandatory contributions by employers, despite payroll deductions, is a serious violation of Philippine labor laws. Employees have the right to demand full compliance and seek legal remedies through administrative complaints, civil suits, or criminal prosecution.

If you require further clarification or assistance, please do not hesitate to contact me. I am here to guide you through this process and ensure that your rights as an employee are upheld.

Sincerely,
[Your Lawyer]