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With the Covid-19 pandemic currently shaking the world’s economic landscape, disrupting business activities, and closing many operations that could help spike up unemployment, business owners might need this little refresher not only to have a solid legal cornerstone but also to survive as they operate in accordance with the law.
So, what are the legal obligations of employers under Republic Act 11199 or the Social Security Act of 2018?
Basically, employers are required to register their businesses with the SSS by accomplishing the Employer Registration Form (R-1) and to report all their employees for coverage using the Employment Report Form (R-1A) within 30 days from date of their employment. As such, they must also require their prospective employees to register via online with the SSS and present their Social Security (SS) numbers to their respective companies for corresponding deductions of their monthly contributions as mandated by the SSS Law.
Employers must also deduct from the salaries/wages of employees their share in the monthly SSS contributions and loan amortizations, including the Employees’ Compensation (EC) contribution, and remit these to the SSS through branches with tellering facilities or accredited banks and collection partner agents within the prescribed schedule of payments.
Nowadays, employers must present the Payment Reference Numbers when paying to enable real time posting of their employees’ contributions and loan payments. They can generate these PRNs through their My.SSS accounts or via the SSS Mobile App or Text-SSS once registered online at the SSS web site (www.sss.gov.ph).
Business owners must always be ready to present their records such as payrolls, books of accounts, other pertinent records for inspection by the SSS or its authorized representatives quarterly or as often as the SSS may require. Thus, to avoid violations or non-compliance to the SS Law, employers should maintain true and accurate work records of their employees, which include employment records, official receipts for payments of monthly contributions and loan amortizations, and records of sickness, injuries, death of employees in manual logbook or electronic file for EC-related contingencies.
As the SSS is perfecting the digitalization of its various online service delivery facilities, employers must likewise conform or adapt to the changing information and technology (IT) structures. They should register their company’s bank account to the SSS so that sickness and maternity benefit reimbursements can be deposited directly and safely to their respective bank accounts for faster transactions, instead of receiving checks through mail. It is important to note that all these reimbursements will be in their favor, as sickness and maternity benefits of their employees should be paid in advance.
Although it is not mandatory, employers should take the initiative to use a part of their office workstations to facilitate employees’ online registration with My.SSS to anticipate future filing of salary loan applications online. Employees can also access their SSS records such as coverage, contributions, status of claims, and others without leaving their workplace, thereby instilling their sense of responsibility of regular checking and monitoring of their SSS records. Likewise, employee-members can also check the same records using the SSS Mobile App at their most convenient time.
In case employers permanently closed or temporarily suspended their operations due to the implementation of enhanced community quarantine amid the Covid-19 threat, or had any changes/updates in their data/records with the SSS, they must inform the nearest SSS branch office using the Employer Data Change Request Form (R-8).
While registered employed members have the responsibility to keep themselves updated with the changes and improvements in the SSS policies and benefits, it is also the legal obligation of the employers to update their employees of such changes.
Employers who are compliant with the Social Security Law are more at peace than their delinquent counterparts. Most often, non-compliant employers get a number of SSS and other labor-related complaints from their workers, which usually lead to fines or potential lawsuits, and unnecessary legal and labor expenses. Receiving a demand letter from the SSS legal office and hiding from the authorities should be the last thing on every employer’s agenda, especially during this time of public and health crisis.
That’s because they are subjected to criminal, civil, and administrative sanctions. Under RA 11199, they could face imprisonment ranging from six to 12 years and a fine of P5,000 to P20,000 without the benefit of probation. Aside from that, delinquent employers should pay the contributions due plus 2 percent penalty per month for delayed payments and damages incurred.
Quoting India’s famous political leader, Mahatma Gandhi, “Justice that love gives is a surrender, justice that law gives is a punishment.”
Aurora C. Ignacio is SSS president and chief executive officer.
We welcome your questions and insights on the topics that we discuss. E-mail mediaaffairs@sss.gov.ph for topics that you might want us to discuss.