In the Philippines, the Social Security System (SSS) serves as a vital social safety net for private-sector employees. Under Republic Act No. 11199, otherwise known as the Social Security Act of 2018, the mandate for employers to deduct and remit contributions is not merely a corporate responsibility but a strict legal obligation. Failure to comply triggers a range of civil and criminal liabilities designed to protect the welfare of the working class.

The Nature of the Employer’s Obligation

The law operates on a "compulsory coverage" principle. Once an employer-employee relationship is established, the employer is legally bound to:

Register the employee within thirty (30) days from the date of employment.
Deduct the employee’s share of the monthly contribution from their compensation.
Remit both the employee’s share and the employer’s prescribed share to the SSS within the first ten (10) days of the following month (or according to the schedule prescribed by the SSS).

Crucially, the employer holds the employee’s contributions in trust. The law explicitly states that the failure to remit these deductions constitutes Estafa under the Revised Penal Code, as the employer is essentially misappropriating funds that belong to the employee and the State.

Civil Liabilities and Financial Penalties

When an employer fails to remit contributions on time or at all, they face immediate financial repercussions:

Monthly Penalties: Employers are liable for a penalty of 2% per month from the date the contribution fell due until the date of actual payment.
Liability for Damages: If an employee or their beneficiaries are denied SSS benefits (such as sickness, maternity, disability, or death benefits) because the employer failed to remit contributions, the employer is legally required to pay the SSS the equivalent amount of the benefit the employee would have received.
Assessment of Unpaid Contributions: The SSS has the power to issue a formal assessment of all unpaid contributions based on available records or through "best evidence obtainable" if the employer refuses to provide payroll documents.

Criminal Liability

The Social Security Act of 2018 imposes severe criminal sanctions to deter non-compliance. These penalties apply to the owner of a sole proprietorship, the partners in a partnership, or the President, Manager, or Directors of a corporation.

Imprisonment: Violation of the Act can lead to imprisonment for a period of not less than six (6) years and one (1) day to twelve (12) years.
Fines: In addition to imprisonment, the court may impose a fine ranging from PHP 5,000 to PHP 20,000.
Prescription Period: The SSS has twenty (20) years from the time the delinquency is known or should have been known to file a criminal action against the erring employer.

Key Legal Defenses and Realities

The Philippine Supreme Court has consistently held that the obligation to remit is absolute. Employers cannot use the following as valid excuses for non-remittance:

The business is experiencing financial losses or is on the verge of bankruptcy.
The employee waived their right to SSS coverage (such waivers are void as they are contrary to public policy).
The employee is "casual," "contractual," or "probationary" (all are covered as long as there is an employer-employee relationship).

The SSS Contribution Condonation Program

Periodically, the SSS offers "Condonation Programs" or "Penalty Condonation" to help delinquent employers settle their arrears. Under these programs, employers may be allowed to pay the principal amount of unpaid contributions in full or via installments, with a significant portion (or all) of the accumulated 2% monthly penalties being waived.

Summary of Consequences

Type of Liability	Specific Consequence
Financial	2% monthly penalty on unpaid amounts.
Benefit Reimbursement	Payment of the full value of benefits lost by the employee.
Criminal	6 to 12 years imprisonment for responsible officers.
Legal/Trust	Potential charges of Estafa for misappropriating deducted shares.