In the Philippines, the Social Security System (SSS) serves as the primary safety net for private-sector employees. However, a recurring issue faced by many workers is the failure of employers to remit collected contributions. Under Republic Act No. 11199, otherwise known as the Social Security Act of 2018, this failure is not merely a civil breach of contract—it is a criminal offense.
1. The Employer's Legal Obligation
Under the law, every employer is mandated to:
- Deduct the employee's share of the monthly contribution from their salary.
- Contribute the employer's share as prescribed by the SSS contribution schedule.
- Remit both shares to the SSS within the first few days of the following month (depending on the employer's SSS ID number).
The law is explicit: the employer holds the employee's share in trust. Failure to remit these funds constitutes estafa or misappropriation of funds.
2. Penalties for Non-Remittance
The SSS Act of 2018 significantly increased the penalties for delinquent employers to deter negligence and fraud.
| Penalty Type | Description |
|---|---|
| Monetary Penalty | A penalty of 2% per month is imposed on the total unpaid contributions from the date they were due until fully paid. |
| Imprisonment | Erring employers (or the responsible officers of a corporation) can face imprisonment ranging from 6 years and 1 day to 12 years. |
| Fines | Courts may impose fines ranging from ₱5,000 to ₱20,000. |
| Criminal Liability | If the employer is a corporation, the managing head, directors, or partners are held personally and criminally liable. |
Note: Even if the employer eventually pays the contributions, the criminal liability is not automatically extinguished. The act of failing to remit on time is already a violation of the law.
3. How to Verify and Recover Unremitted Contributions
Members should be proactive in monitoring their records to catch discrepancies early.
Step 1: Verification
Check your contribution status via the My.SSS Portal or the SSS Mobile App. If there is a gap in payments despite deductions appearing on your payslip, you have a cause for action.
Step 2: Internal Resolution
Before filing a formal complaint, it is often practical to demand an explanation from the HR or Accounting department. The issue may be a clerical error or a temporary system lag.
Step 3: Filing a Formal Complaint
If the employer refuses to rectify the records, the member may:
- Visit the SSS Branch: Go to the branch where the employer is registered and look for the Member Assistance Center or the Legal Department.
- Submit Evidence: Provide copies of your payslips, Employment Contract, and a notarized Affidavit of Complaint.
- SSS Intervention: The SSS will assign an Account Officer to audit the employer. They may issue a "Letter of Assessment" or a "Final Demand Letter."
4. Impact on Member Benefits
Non-remittance has a direct, negative impact on a member's eligibility for benefits. SSS follows a "qualifying contribution" rule:
- Sickness/Maternity/Unemployment: Require a specific number of months paid within a 12-month period.
- Loans: Require at least 36 (for Salary Loan) or 72 (for Calamity Loan) monthly contributions.
- Disability/Retirement: Require a minimum of 120 monthly contributions for a lifetime pension.
The "Good News" Provision: Under Section 24(b) of RA 11199, if the employer failed to remit contributions but the employee can prove that the deductions were made (e.g., through payslips), the SSS shall still grant the benefit. The SSS will then proceed to collect the unpaid amount plus penalties from the employer.
5. The SSS Condonation Program
Periodically, the SSS offers Contribution Penalty Condonation Programs. These allow delinquent employers to pay the principal amount of unpaid contributions in full or via installments, with the 2% monthly penalties waived. This is often the fastest way for employees to have their records updated without a lengthy legal battle.
Conclusion
Unremitted contributions are a violation of a worker's fundamental right to social security. Employers are legally bound to ensure these funds reach the SSS. For workers, the best defense is regular monitoring of their SSS accounts and keeping all records of salary deductions.
Would you like me to draft a formal demand letter that you can send to an employer regarding unremitted SSS contributions?