STATE-run Social Security System (SSS) warned employers they face criminal prosecution if they fail to comply with their legal obligations to their employees.
SSS President and Chief Executive Aurora C. Ignacio said registered and unregistered business owners must still fulfill their obligations to their employees, regardless of employment status, and even with lockdown measures in place.
As of June, about 11,243 cases were filed against delinquent employers nationwide and 988,324 active employers composed of household employers and registered establishments that are operational.
“Although, we are still coping with the financial crisis brought about by the Covid-19 pandemic, business owners are still expected to fulfill their statutory obligations to secure the welfare and interests of their workers,” Ignacio said in a statement issued last Sunday.
Under Republic Act 11199 (the Social Security Act of 2018), employers are mandated to register their business with the SSS. They must accomplish the Employer Registration Form (SS Form R-1) and report all their employees for SSS coverage using the Employment Report Form (SS Form R-1A) within 30 days from actual employment date.
Apart from this, employers should also deduct from the employee’s salaries/wages the employee share in the monthly SSS contribution and pay together with the employer share of the contribution including the Employees’ Compensation (EC) contribution, and remit these to the SSS through the branch offices with tellering facilities or through SSS accredited banks and collection partners within the prescribed schedule of payments.
Unposted payments
IN addition, employers are also tasked to deduct and/or withhold from employees’ salaries and/or wages their monthly loan amortizations based on the scheduled payment deadlines and remit the same to the nearest SSS branch office with teller services or SSS accredited collecting partners. They must also submit the Loan Collection list online through their My.SSS account at the SSS web site.
Ignacio said the SSS has also been receiving reports of unposted loan payments from the pension fund manager’s employed members.
“However, employers have failed to submit the loan collection lists to SSS, which is very important since it is the basis for the crediting of loan payments to the member’s account,” she further said.
The SSS chief also reiterated that employers should pay in advance their employees’ SS and EC sickness benefits, and maternity benefits due to qualified female employees. Registered employers may now submit online their sickness benefit reimbursement applications and maternity benefit reimbursement applications through their My.SSS account.
Employer’s failure or refusal to comply with the provisions of the Social Security Act of 2018 is punishable by a fine of not less than P5,000.00 nor more than P20,000.00, or imprisonment for not less than six years and one day nor more than 12 years or both, at the discretion of the court.
But, if the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed, or to deduct contributions from the employee’s compensation and remit the same to the SSS, the penalty shall be a fine of not less than P5,000.00 nor more than P20,000.00 and imprisonment for not less than six years and one day nor more than 12 years.
Other sanctions
IN case the employer deducted the SS contribution or loan amortization from employee’s salary/wages but failed to remit to the SSS, the imposable penalty shall be that provided under Article 315 of the Revised Penal Code on Estafa which provides an imprisonment not exceeding 20 years.
Other sanctions which may be imposed against delinquent employers include the issuance of Warrant of Distraint, Levy and/or Garnishment and non-issuance of SSS Certificate of Compliance/Clearance.
Delinquent employers who could not immediately pay their liabilities but wish to settle may avail of the Installment Payment Scheme Program by securing an updated and consolidated Statement of Account of its due but unpaid/unremitted contributions and penalty delinquencies and submitting an accomplished Application for Installment Payment Scheme to the concerned Branch Office/Large Account Department.
After submission of the application for Installment together with the supporting documents such as but not limited to Contributions Collection List (R3) and duly notarized Promissory Note, the employers shall be required to pay at least five percent of the total delinquency as downpayment, and issue post-dated checks corresponding to the months covered by the installment. This payment scheme is available for both the contributions and loan payment delinquencies of employers.