In the Philippines, the "statutory benefits" triad—SSS, PhilHealth, and Pag-IBIG—serves as the primary social safety net for private-sector employees. Under Philippine law, employers are mandated to deduct the employee's share from their monthly salary and, together with the employer's counterpart contribution, remit the total amount to the respective agencies.
However, a common and serious grievance arises when an employer deducts these amounts from an employee’s paycheck but fails to remit them. This is not just a breach of trust; it is a criminal offense.
1. The Mandatory Nature of Remittances
Every employer-employee relationship carries the legal obligation to register employees from their first day of work. The law is clear:
- SSS (RA 11199): Contributions must be remitted within the first 10 days of the month following the applicable month.
- PhilHealth (RA 11223): Employers are responsible for the deduction and immediate remittance of contributions.
- Pag-IBIG (RA 9679): Remittance is mandatory for all employees covered by the SSS.
2. Legal Penalties for Employers
Non-remittance is treated with significant severity because it deprives the worker of benefits like sickness allowances, maternity leave, calamity loans, and health insurance.
| Agency | Primary Penalty | Criminal Liability |
|---|---|---|
| SSS | 2% monthly penalty on unpaid dues. | Imprisonment (6 to 12 years) and/or a fine. |
| PhilHealth | 3% monthly interest on unpaid dues. | Fine of ₱50,000 to ₱100,000 per affected employee. |
| Pag-IBIG | 3% monthly penalty on unpaid dues. | Imprisonment of up to 20 years and/or a fine. |
Note on "Estafa": Under the Revised Penal Code, an employer who deducts contributions but fails to remit them can be charged with Estafa. The act of collecting money for a specific purpose and misappropriating it for the company’s operations or personal use constitutes a crime of swindling.
3. Employee Remedies: What Can You Do?
If you discover through your online portals (My.SSS, Virtual Pag-IBIG, or PhilHealth Member Portal) that your contributions are missing despite being deducted from your payslip, take the following steps:
Step 1: Internal Inquiry
Request a meeting with your HR or Payroll department. It is possible there was a system glitch or a delay in posting. Ask for the SBR (Sickness/Birth/Contribution Receipt) or the validated remittance list.
Step 2: Formal Demand Letter
If the internal inquiry yields no results, write a formal demand letter to the employer. State the specific months missing and demand that they remit the amounts within a specific timeframe (e.g., 5 to 7 days). Keep a copy of this letter with a "received" stamp.
Step 3: Filing an Administrative Complaint
You can visit the nearest branch of the concerned agency to report the non-remittance.
- SSS: File a complaint with the Social Security Commission or the SSS branch’s legal department.
- PhilHealth/Pag-IBIG: Visit their respective legal or compliance units to report the delinquency.
Step 4: Labor Complaint (NLRC)
You may file a complaint for "Underpayment of Benefits" or "Non-Remittance" at the National Labor Relations Commission (NLRC) through the Single Entry Approach (SEnA) for mediation.
Step 5: Criminal Action
Since non-remittance is a criminal act, you may opt to file a complaint-affidavit with the Office of the Prosecutor for violations of the SSS Law, NHIP Act, or Pag-IBIG Fund Law, as well as Estafa.
4. Key Doctrines to Remember
- Presumption of Fault: The law presumes the employer is at fault if the deductions are made but not reflected in the agency's records.
- No Waiver of Rights: An employee cannot "waive" their right to these contributions. Even if you signed a contract saying you don't want SSS, that contract is void as it violates public policy.
- Corporate Liability: If the employer is a corporation, the President, Manager, or Managing Director are the ones who can be held criminally liable and face imprisonment.
Conclusion
Social security contributions are part of the "bundle of rights" intended to protect the Filipino worker. Failure to remit these is considered a "continuing offense." Employees are encouraged to monitor their accounts regularly to ensure their future remains protected.
Would you like me to draft a template for a Formal Demand Letter you can send to an employer regarding unremitted contributions?