LETTER TO A LAWYER

Dear Attorney,

I hope this letter finds you in good health. I am writing to seek legal guidance about my current situation. I am employed by a certain company that, to my knowledge, has failed to pay the mandatory employer’s share of my Social Security System (SSS) contributions. Despite my repeated inquiries and follow-up, it appears that my contributions are not being remitted as required by Philippine law.

As a diligent worker who depends on the social security benefits that come with SSS coverage, I am extremely concerned about the consequences of my employer’s non-compliance. I worry about potential issues regarding my future benefit claims, and how it might affect my standing with other government benefits as well.

I would like to understand the legal implications of my employer’s refusal or failure to remit SSS contributions and what steps I, as an employee, can take to address this. Could you please clarify my rights, the penalties that my employer may face, and the remedies available to me under Philippine law? I appreciate any advice you can provide.

Thank you for your time and assistance in helping me navigate this matter.

Respectfully,

A Concerned Employee

LEGAL ARTICLE: AN IN-DEPTH DISCUSSION ON EMPLOYERS’ OBLIGATIONS REGARDING SSS CONTRIBUTIONS IN THE PHILIPPINES

1. Introduction

In the Philippines, the Social Security System (SSS) provides significant benefits to employees in both the public and private sectors (although government employees are typically covered by the GSIS). Private-sector employees rely heavily on SSS benefits during contingencies such as sickness, disability, maternity leave, old-age, and death. Consequently, non-payment or underpayment of SSS contributions by employers undermines an essential social safety net, leaving employees vulnerable to unforeseen risks.

The Philippine government enacted laws to protect the welfare of workers, mandating both the employee and employer to contribute periodically to the SSS. When the employer fails or refuses to pay the required contributions, employees can pursue legal avenues to correct this wrongful practice. This article discusses the relevant laws, employer obligations, liabilities, and remedies for the affected workers.

2. Legal Foundation of SSS Contributions

The Social Security Act of 2018, found under Republic Act No. 11199 (“RA 11199”), consolidated and revised the laws governing the SSS. It repealed the old Social Security Law (RA 1161, as amended by RA 8282) and underscores the government’s commitment to ensuring social protection for Filipino workers.

Under RA 11199, it is mandatory for covered employees and their employers to remit monthly contributions to the SSS. The law provides that any private employer with one or more employees, regardless of the nature of business, should enroll its workforce in the SSS program. Employers are primarily responsible for deducting the employee’s share from their monthly wages and adding the employer’s corresponding share before remitting the combined sum to the SSS.

3. Who Is Covered by the Social Security System?

Covered Employees: As a general rule, all private-sector employees who have not yet reached the prescribed retirement age must be enrolled. This extends to domestic workers, contractual workers, part-time workers, and even family members employed in the family business, provided the business meets coverage criteria.
Self-Employed Individuals: While not directly relevant to an employer’s failure to remit, self-employed individuals are also covered and must pay their entire monthly contribution on their own. This includes freelancers, consultants, and professionals in private practice.
Voluntary Members: Individuals who have the capacity to pay and want to maintain their contributions—such as Overseas Filipino Workers (OFWs) or previously covered employees—can enroll as voluntary members.

4. Employer Obligations and Contribution Rates

Under the current laws and implementing rules, employers have the following obligations:

Accurate Deduction: The employer must deduct the employee’s share from the employee’s salary in accordance with the prescribed contribution schedule. The rate is dependent on the employee’s monthly salary credit (MSC).
Timely Remittance: The employer must then add its own share to the collected amount and remit the total to the SSS on or before the due date, as set by the SSS guidelines. The due date is determined by the employer’s SSS number or business registration, although these details are spelled out on the official SSS website and official circulars.
Record-Keeping: Employers must keep accurate and updated records of their employees’ monthly contributions. This is crucial for monitoring purposes, future claims of benefits, and compliance audits by the SSS.
Posting of Contributions: Once contributions are remitted, the SSS usually posts these payments to the employee’s records. Employees can verify the actual posting of contributions through the SSS online portal or by personally visiting an SSS branch.

5. Consequences of Non-Remittance or Underpayment

5.1. Administrative Penalties

The SSS, through its enforcement powers, can assess penalties and surcharges against employers who fail or refuse to remit their employees’ contributions on time. The law imposes a penalty of at least 2% per month (or an amount determined by the SSS within the bounds of RA 11199) from the date the contribution falls due until it is paid. This penalty is intended to encourage timely compliance.

5.2. Criminal and Civil Liabilities

Employers who fail to remit contributions are subject to criminal prosecution and civil suits under the following circumstances:

Criminal Action for Violation of RA 11199: If proven guilty, the responsible officers (i.e., the employer’s president, managing partner, or other senior officers directly involved) may face imprisonment ranging from six (6) years and one (1) day to twelve (12) years or a fine of not less than Five Thousand Pesos (PHP 5,000.00) nor more than Twenty Thousand Pesos (PHP 20,000.00), or both, at the discretion of the court.
Civil Action for Collection of Contributions: The SSS may file a civil action to collect all unpaid contributions, plus penalties, from the employer. Courts typically order the payment of the delinquent contributions plus the applicable surcharges and interest.

5.3. Personal Liability of Responsible Officers

Corporate officers or partners of the employer who knowingly and deliberately failed to make SSS contributions can be held personally liable. Hence, liability does not necessarily end with the corporate entity. The law aims to prevent people from hiding behind the corporate veil to evade personal responsibility.

6. Impact on Employees

When an employer fails to pay the required contributions, the primary victim is the employee. Possible consequences for employees include:

Non-Eligibility for SSS Benefits: The employee may struggle to claim benefits from SSS for sickness, maternity, unemployment, disability, or retirement because their records might reflect incomplete or missing contributions.
Delayed Posting of Contributions: If the employer continues to collect the employee’s share without remitting it, the employee’s posted contributions in the SSS system will remain deficient, leading to confusion and difficulties when availing benefits.
Potential Impact on Other Statutory Contributions: Although governed by separate laws, some employers who fail to remit SSS contributions might also fail to remit other mandated contributions, such as the Philippine Health Insurance Corporation (PhilHealth) and Home Development Mutual Fund (Pag-IBIG) premiums, aggravating an employee’s vulnerability.

7. Employee Remedies

Employees whose employers refuse to pay their SSS contributions have several courses of action under Philippine law:

Inquire with Human Resources or Management: The first step is often to communicate with the employer’s HR department or management. It may be a case of administrative oversight or a misunderstanding. A formal inquiry can trigger internal checks and prompt the employer to correct the issue immediately.
Check Personal Records Online or at SSS Branch: Employees can verify their posted contributions either online via the My.SSS portal or by visiting an SSS branch. If irregularities persist over several months, it may indicate deliberate non-remittance.
File a Complaint with the SSS: If the employer continues to fail or refuses to pay, the employee can file a complaint directly with the SSS. The SSS can then initiate an investigation, require the employer to present proof of payment, and, if warranted, impose penalties or prosecute the employer for non-compliance.
Seek Assistance from the Department of Labor and Employment (DOLE): Although SSS is a separate institution, DOLE can be approached for labor-related issues. DOLE may help facilitate conciliation and mediation services through the Single Entry Approach (SEnA) to resolve the dispute in an amicable manner, or guide employees to the proper agencies for enforcement.
Pursue Legal Action: Ultimately, if no resolution is found, the aggrieved employee may consider private legal counsel to explore filing a criminal complaint or civil suit against the employer. Often, SSS itself can take the lead in prosecuting delinquent employers, but employees may complement these efforts by engaging the assistance of a lawyer.

8. Preventive Measures and Best Practices

While the above remedies help employees deal with existing delinquencies, the following practices may help prevent future lapses:

Regular Monitoring of Contributions: Employees should check their SSS contributions regularly, either online or by requesting an updated printout from SSS. If there is any delay in the posting, it should be addressed promptly with the employer.
Constant Documentation and Communication: Keep written records of any communications with the employer’s HR or finance department regarding the issue of non-remittance. These records could be crucial if a dispute escalates.
Timely Reminder to Employer: When employees notice delayed remittances, they should issue timely reminders in writing. Sometimes, such lapses are unintentional and can be promptly corrected if brought to management’s attention.
Union or Workers’ Association Involvement: If the employer’s workforce has a labor union or workers’ association, employees can report the violation and seek collective action to demand proper remittance of contributions.

9. Frequently Asked Questions

What if the employer fails to remit my contributions despite deducting from my salary?
The employer is acting illegally. It is a criminal offense to deduct contributions from employees and not remit them. Employees should document these deductions and file a complaint with the SSS or seek legal counsel.
How long do I have to wait before filing a complaint?
There is no strict waiting period, but it is advisable to give the employer reasonable time to correct any mistake once notified. If the employer blatantly refuses or continuously neglects to address the issue, employees may proceed to file a complaint.
Will I lose my benefits if my contributions are not updated?
Employees cannot claim benefits for periods without posted contributions. However, once delinquent contributions are paid retroactively by the employer (including penalties), the employee’s eligibility may be restored.
Are household employers also required to remit SSS contributions for domestic helpers?
Yes, household employers must also comply with SSS contribution requirements if they employ domestic workers. Failure to do so may subject them to the same penalties and liabilities faced by corporate employers.
Can I check my contributions online?
Yes. By creating a My.SSS account on the official SSS website, employees can view contribution history, loan status, benefit applications, and other pertinent information in real time.

10. Recent Jurisprudence and Enforcement Trends

In recent years, the Social Security System has become more aggressive in filing cases against delinquent employers to protect the welfare of employees. Court rulings, particularly at the appellate level, affirm the mandatory nature of SSS contributions and uphold the personal liability of responsible corporate officers who willfully fail to comply. This shift in jurisprudence highlights the importance placed by the judiciary on workers’ social security rights.

11. Practical Considerations for Employees

Document Everything: If an employee suspects non-remittance, they should keep payslips showing deductions for SSS, any memos, and email correspondence with HR or management as evidence.
Seek Guidance from Colleagues: Other employees might be facing the same problem, and a collective effort can be more effective.
Consider Alternative Remedies: If the employer exhibits other labor violations, employees may also file a complaint before the National Labor Relations Commission (NLRC) for any unpaid benefits, although SSS contributions are typically enforced by the SSS itself.

12. Conclusion

In the Philippines, the law safeguards employees’ rights to social security coverage through mandated monthly contributions to the Social Security System. Employers are legally bound to collect and remit these contributions in a timely manner. Failure or refusal to do so constitutes a serious violation of RA 11199, subjecting the employer to penalties, surcharges, and possibly criminal liability. From the standpoint of an employee, vigilance is critical: regularly checking posted contributions, communicating with the employer, and promptly seeking assistance from government agencies can help avert or remedy non-remittance.

Where the employer remains obstinate, employees need not suffer in silence. They have multiple avenues—SSS, DOLE, and legal action—to enforce their right to social security coverage. By understanding these laws, workers can confidently assert their rights and help ensure that they remain protected against unforeseen eventualities.

In summary, refusing to pay an employee’s SSS contributions places the employer at risk of penalties, fines, and even criminal prosecution under Philippine law. Employees can take proactive steps to safeguard their contributions and, if necessary, seek recourse to recover lost benefits. Ultimately, prompt compliance by employers is vital to maintaining a robust and equitable social security network for Filipino workers.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Employees or employers facing questions on SSS compliance should consult directly with an attorney or the SSS for detailed guidance specific to their circumstances.