Under Philippine labor laws and the Social Security Act of 2018 (Republic Act No. 11199), project-based employment is a recognized category of employment where the specific project or undertaking has been determined at the time of engagement and its termination is linked to the completion of said project. Despite the finite nature of their engagement, project-based employees (PBEs) are entitled to the same social security protections as regular employees.

Legal Basis for Coverage

The mandatory coverage of PBEs is rooted in the Social Security Act, which mandates that all employees not over 60 years of age are subject to compulsory coverage. Section 8(d) of the Act defines an "employee" as any person who performs services for an "employer" in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship.

The Philippine Supreme Court has consistently held that project-based employees are employees of the company that hired them for the duration of the project. Consequently, the employer is legally obligated to report them to the Social Security System (SSS) and remit the necessary contributions.

Employer Obligations and Reporting Requirements

The primary responsibility for ensuring SSS compliance lies with the employer. For project-based arrangements, the following requirements must be met:

Registration and Reporting (SS Form R-1A): Employers must report a project-based employee for coverage within thirty (30) days from the actual date of employment. The employer must include the employee’s name in the Employment Report (Form R-1A) submitted to the SSS.
Collection of Contributions: The employer is responsible for deducting the employee’s share of the SSS contribution from their salary and adding the employer’s share.
Remittance: The total contribution (Employee Share + Employer Share + Employees' Compensation (EC) Program contribution) must be remitted to the SSS according to the prescribed payment schedule.

Contribution Structure and Computation

Contributions are based on the employee's Monthly Salary Credit (MSC). As of the current implementation of RA 11199, the contribution rate is progressively increasing until it reaches the target percentage of the MSC.

Employee Share: Deducted directly from the worker's payroll.
Employer Share: Paid by the hiring entity.
Mandatory Provident Fund (WISP): For employees whose MSC exceeds a certain threshold (currently ₱20,000), a portion of the contribution goes to the Workers' Investment and Savings Program (WISP), a retirement savings scheme managed by the SSS.
Employees’ Compensation (EC) Program: A fixed monthly amount (usually ₱10 or ₱30 depending on the MSC) paid solely by the employer to provide benefits for work-related contingencies.

Remittance Schedule and Deadlines

The deadline for remitting contributions for project-based employees follows the same schedule as regular employees, which is typically based on the 10th digit of the Employer’s SSS ID Number.

10th Digit of Employer ID	Deadline (following month)
1 or 2	10th day
3 or 4	15th day
5 or 6	20th day
7 or 8	25th day
9 or 0	Last day of the month

Note: If the deadline falls on a weekend or a holiday, the payment may be made on the next working day.

Specific Requirements for PBEs During Intermittent Projects

One of the complexities of project-based employment is the "off-period" between projects.

Separation Notice: When a project is completed and the employee is "separated" from the company, the employer must reflect this in the SSS records (usually via the SSS Web Inquiry System or the R-1A form in the next reporting cycle) to stop the billing of contributions.
Re-hiring: If the same employee is hired for a new project, they must be reported again as "re-hired" to resume the contribution cycle.
Continuity of Coverage: Even if the project ends, the employee retains their SSS membership. They may choose to continue paying contributions as a Voluntary Member during gaps in employment to maintain eligibility for benefits (e.g., Sickness, Maternity, Disability, Retirement).

Penalties for Non-Compliance

Failure to comply with the remittance requirements carries significant legal and financial risks for the employer:

3% Monthly Penalty: Employers who fail to remit contributions on time are liable for a penalty of 3% per month from the date the contribution became due until paid.
Legal Action: Under the SSS Act, the failure or refusal to register employees or remit contributions is a criminal offense punishable by a fine (ranging from ₱5,000 to ₱20,000) and/or imprisonment (ranging from 6 years and 1 day to 12 years).
Liability for Benefits: If an employee dies, becomes disabled, or retires without the employer having remitted the required contributions, the employer may be held liable by the SSS for the value of the benefits the employee or their beneficiaries would have received.

Summary Checklist for Employers of Project-Based Workers

Verify the SSS Common ID or SS Number of the project-based worker upon hiring.
Submit Form R-1A within 30 days of the start of the project.
Generate a Payment Reference Number (PRN) via the SSS Employer Portal.
Ensure accurate deduction of the Employee Share based on the latest SSS Contribution Table.
Remit total contributions according to the assigned monthly deadline.
File a Separation Report upon the actual completion of the project to clear the company's liability for future months.