The employer and its employees are required to be members of the SSS, Employees’ Compensation (EC) program, Philippine Health Insurance Corporation (PhilHealth) and Home Development Mutual Fund (HDMF). The SSS administers both the social security and EC programs for employees in the private sector.
The employer should register with the SSS, PhilHealth and HDMF and report its employees for coverage with the said agencies. Furthermore, the employer and its employees should contribute to these agencies, with the contributions based on the monthly compensation of the employees. Each agency has its own definition of monthly compensation. The employer is responsible for withholding and remitting the contributions of its employees, and remitting its (i.e., the employer’s) counterpart contributions, within the period that each agency has set. The employers’ contributions may not be deducted from the employees’ salary. Failure to remit the contributions to the SSS, PhilHealth and HDMF could give rise not only to monetary liability for the employer but also to criminal sanctions against the employer and its officers. If a juridical person is guilty of the offense, its managing director, partner, president, general manager and/or the responsible person are liable for the penalties.
The monetary liability would involve interest on the contributions that have not been remitted, computed from the date the contributions fall due until they are remitted to the relevant agencies. On the other hand, the criminal sanctions would involve a fine or imprisonment or both.