Medical Leave Salary and SSS Sickness Benefit Rules in the Philippines
A comprehensive legal primer for employees, HR practitioners, and counsel (Updated to Republic Act No. 11199 and pertinent 2024 issuances)
Disclaimer: This article is for educational purposes and does not constitute legal advice. Always confirm details with the Social Security System (SSS), the Department of Labor and Employment (DOLE) and qualified counsel, especially where recent circulars or collective bargaining agreements (CBAs) may apply.
1. The Two Separate Concepts of “Paid Sick Leave” in Philippine Labor Practice
| Concept | Source of the Obligation | Who Pays | Maximum Duration | Amount |
|---|---|---|---|---|
| Company‐Granted Sick Leave (a/k/a “medical leave salary”) | Contractual — ➜ Employment contract, CBA, employee handbook, or “practice” under Art. 1700 Civil Code | Employer | Whatever the contract provides (commonly 5-30 paid days/year) | 100 % of daily wage unless the policy says otherwise |
| SSS Sickness Benefit | Statutory — Sec 14, Republic Act 11199 (Social Security Act of 2018) & SSS Circulars | Employer advances; SSS reimburses | 120 paid days per calendar year (extension to 240 days if related disabilities, beyond which it becomes disability benefit) | 90 % of the member’s Average Daily Salary Credit (ADSC) |
Key takeaway: The Labor Code itself does not mandate paid sick leave separate from the five-day Service Incentive Leave (SIL) under Art. 95. Any “medical leave salary” beyond SIL is strictly a matter of company policy or CBA, while the SSS sickness benefit is a government-run insurance payment.
2. Company-Granted Sick Leave (Medical Leave Salary)
Legal Basis No express statute. Obligations arise from:
- Art. 1700, Civil Code (employers must protect workers’ welfare);
- Art. 1159, Civil Code (contracts have the force of law);
- Principle of company practice (if granted regularly for at least 3 years, it ripens into a demandable benefit).
Interaction with SIL
- SIL is convertible to cash if unused at year-end.
- A company may designate part of its sick leave bank as SIL, but it must still honor the cash-conversion feature for the 5 days.
Tax Treatment
- Salaries continued by the employer are treated as regular compensation, hence subject to withholding tax, unless falling under de minimis thresholds (rare).
Decrements & Offsets
- An employer may offset days already reimbursed by SSS against its own sick-leave bank only if the CBA or policy allows.
- It cannot force the employee to exhaust SIL before filing SSS sickness benefit; DOLE has repeatedly ruled this is an unfair labor practice.
Proof of Illness
- Medical certificate is customary but not a statutory prerequisite, unless spelled out in policy.
- Data Privacy Act (RA 10173) applies; HR may keep a copy but must restrict access.
3. SSS Sickness Benefit — Quick-Reference Checklist
| Requirement | Rule |
|---|---|
| Minimum contributions | At least 3 monthly contributions within the 12-month period immediately before the semester of sickness or injury. |
| Period of incapacity | At least 4 consecutive calendar days, whether in hospital or home confinement. |
| Notification deadlines | ● Home confinement: Notify employer within 5 calendar days from start of sickness; employer must notify SSS within 5 days after receipt. ● Hospital confinement: Either employee or employer must notify SSS within 1 year from date of discharge. |
| Daily Sickness Allowance (DSA) | 90 % × ADSC (average of the highest 6 MSCs in the 12-month base period ÷ 180). |
| Maximum entitlement | 120 days per calendar year, cumulative; 240 days for the same illness/injury; >240 days shifts to Permanent Partial or Permanent Total Disability benefit. |
| Employer advance & reimbursement | Employer must advance the DSA not later than the employee’s next regular payday. Reimbursement claim must be filed with SSS within 1 year from the last compensable day. |
| Prescriptive period | 10 years to sue for unpaid benefits under Art. 1144 Civil Code. |
4. Step-by-Step Filing Procedure
Secure SSS-issued Sickness Benefit Application (SBA) Form
- Part I completed by employee and attending physician.
- Attach medical certificate, clinical abstract, lab results or Operative Record if surgical.
Notify Employer / SSS (observe deadlines above).
Employer Advances Payment
- Compute DSA.
- Record as “SSS Sickness Benefit Advance” (asset) in books.
Employer Files Reimbursement
- Submit SBA Part II, ECC Form B-309 (if work related), R-3, R-5, SBR copies.
- SSS processes in approx. 10–30 banking days; reimbursement credited to corporate bank account or through PESONet.
Employee Appeals
- First level: SSS Medical Evaluation Section.
- Second: Social Security Commission (SSC).
- Third: Court of Appeals via Rule 43; final recourse is Supreme Court.
5. Interplay with Other Benefits & Laws
| Law / Program | Effect on SSS Sickness Benefit |
|---|---|
| Employees’ Compensation (EC) Program | If the sickness is work-related, the employee may claim both SSS sickness (Section 14) and EC temporary total disability (TTD) benefit (PD 626, as amended). DSA computation is the same 90 % ADSC, but EC is paid by the ECC Fund, not charged to the 120-day SSS cap. |
| RA 11210: 105-Day Expanded Maternity Leave | Maternity leave takes precedence; no SSS sickness benefit can be granted for a period already paid as maternity. |
| RA 8187: Paternity Leave | Distinct; father may still qualify for SSS sickness benefit if he personally falls ill. |
| RA 9710: Magna Carta of Women — Special Leave for Women (Gynecological Surgery Leave) | Up to 60 fully-paid days by employer in addition to any SSS benefit. Employers may not seek SSS reimbursement for this special leave. |
| COVID-19 special rules (2020–2022) | SSS allowed lax deadlines for notification and accepted teleconsult certificates; most waivers lapsed on 31 December 2022. |
6. Jurisprudential Highlights
| Case | G.R. No. | Doctrine |
|---|---|---|
| SSS v. A.E. Amoroso Canning Corp. | 169070 (27 Jan 2016) | Employer may be reimbursed only to the extent of the daily sickness allowance actually advanced. |
| Intercontinental Broadcasting Corp. v. IAC | 147594 (18 Jan 2000) | Habitual grant of paid sick leave for five consecutive years perfected a company practice; employer barred from unilateral withdrawal. |
| Maunlad Transport v. SSS | L-64217 (22 Jan 1986) | Home confinement qualifies if duly certified; hospital confinement is not a sine qua non. |
| SSS v. Process Apparels | 178063 (23 Apr 2018) | Reimbursement denial upheld where employer filed beyond the one-year prescriptive period. |
7. Government Employees (GSIS Sickness) – Snapshot
- Coverage is under RA 8291 (GSIS Act), not the SSS law.
- Sick Leave Credit: Civil Service Rules grant 15 days sick + 15 days vacation leave annually, cumulative and fully paid by the agency.
- After exhausting leave credits, employee may apply for Temporary Total Disability (TTD) benefit from GSIS (75 % of AMC).
- Rules on notification and medical certification parallel SSS, but reimbursement is seldom needed because agencies pay salaries directly.
8. Tax & Accounting Corner
- SSS Reimbursements → Non-taxable income to the employee; employer records a mere settlement of asset.
- Medical Leave Salary → Regular taxable compensation; subject to 13th-month computations.
- Premium Deductibility → Employers may deduct SSS employer share and sickness advances from gross income under Sec 34(A)(1), NIRC.
9. Practical Tips for HR & Employees
| For HR / Employers | For Employees |
|---|---|
| • Draft a stand-alone sick leave policy clearly separating SIL, company sick leave, and SSS benefit advances. | • Keep a personal log of contributions (My.SSS portal) to avoid coverage gaps. |
| • Use SSS sickness notification e-services to stop counting deadlines against you. | • File medical certificates within 5 days if on home rest — even via email or company HRIS. |
| • Book SSS advance as a receivable right away; reconcile with SSS reimbursement notices monthly. | • If denied, appeal within 60 days of notice — the SSS reconsideration window. |
| • Remember the Anti-Red Tape Act (ARTA); prolonged processing can be reported. | • Do not resign while on sickness benefit; it may forfeit pending advances. |
10. Frequently Asked Questions
Can I receive both my company sick leave pay and SSS sickness benefit? Yes, if the company policy grants paid sick leave separate from the SSS advance. The employer still has to advance the SSS benefit and may not deduct that advance from contractually granted sick-leave pay unless the policy explicitly allows offsetting.
Does a half-day absence count toward the 4-day minimum? No. SSS counts calendar days, not fractions. Four consecutive calendar days of incapacity is the threshold.
What if my employer refuses to advance the benefit? You may apply directly to SSS, which will then pay you and charge the employer (Sec 14[4], RA 11199) plus a 2 % monthly penalty to the employer.
Is the sickness benefit included in the computation of 13th-month pay? No. Sickness benefit is insurance, not employer-paid salary under PD 851.
Do absences due to mental health qualify? Yes, mental illness certified by a licensed psychiatrist is treated the same as any other sickness.
11. Key Statutes & Issuances (Chronological)
- Presidential Decree 442 (Labor Code, 1974) – Art. 95 (Service Incentive Leave)
- Presidential Decree 626 (1975) – Employees’ Compensation
- Republic Act 8291 (1997) – GSIS Act
- Republic Act 11199 (2019) – Social Security Act of 2018 (consolidated)
- SSS Circular 2020-002 – Electronic submission of Sickness Benefit Reimbursement Applications
- SSS Circular 2022-013 – Resumption of regular deadlines after COVID-19 pandemic
Always cross-check with the latest SSS Circulars and DOLE Department Orders.
Bottom Line
- Philippine law guarantees insurance-based income replacement for at least 120 days per year through the SSS sickness benefit, provided contributions are updated and timelines met.
- Any additional paid medical leave flows from contract or long-standing company practice, which becomes legally enforceable once proven.
- HR managers should keep these systems distinct yet harmonized; employees should understand both to maximize protection and avoid forfeitures.