Employer Liability for SSS Benefits: Key Guidelines

Understanding Employer Responsibilities in Social Security Contributions

The Social Security System (SSS) of the Philippines has issued Circular No. 2025-001, which outlines the employer's liability for damages in the payment of Social Security (SS) benefits due to non-compliance with obligations. This circular enforces provisions from the Social Security Act of 2018 (Republic Act No. 11199) and aims to protect employees' rights to timely and accurate benefits.

Key Provisions of SSS Circular No. 2025-001

Employer Obligations and Liabilities

Employers are required to fulfill three primary obligations to ensure compliance:

1. Report Employees for Compulsory Coverage: Employers must register employees with the SSS as soon as they are hired.

2. Accurately Report Employment Date: The actual date of employment must be correctly reported to the SSS.

3. Remit Correct Contributions: Employers must remit the correct amount of SS contributions on time.

Failure to comply with these obligations can result in employer liability for damages. The damages will be equivalent to the cash benefit that an employee would have been entitled to had the employer complied with their legal duties.

Computation of Employer Liability

The employer liability for damages will be determined based on the type of non-compliance:

1. Non-reporting of Employees for Coverage:

   • The employer must pay the full amount of SS benefits, including sickness, maternity, unemployment, disability, funeral, retirement, and death benefits.

   • If the claim involves pension benefits, the employer is liable for the full accumulated pension due, including dependents' pension, additional monthly benefits, supplemental benefits, and the 13th-month pension.

2. Misrepresentation of Employment Date or Non-remittance of Contributions:

   • Employers must cover the difference between the correct benefits based on accurate contributions and the reduced benefits due to non-remitted contributions.

   • For pension benefits, the employer must pay the difference between the full pension amount and the reduced pension due to non-compliance.

3. Multiple Employers:

   • If an employee has multiple employers who are liable, the total liability will be computed proportionately based on the period of employment and corresponding contributions.

Processing of Benefit Claims Under Employer Liability

When an employee, beneficiary, or claimant files a claim, the SSS will determine if the claim is subject to employer liability for damages. The process includes:

• Submission of documents proving employment, such as employer name, employment period, salary details, and other necessary information.

• Verification and authentication of documents by the SSS.

• Issuance of a billing or collection letter to the employer, requiring payment of unpaid contributions, penalties, and damages.

• Settlement of the required amount by the employer through full payment or an approved settlement scheme.

• Processing of the benefit claim upon posting of the minimum required contributions.

If an employer refuses to pay after repeated collection efforts, the SSS will process the claim after one year from the date of the billing letter receipt and may take legal action against the employer.

Determining the Date of Coverage for Benefit Payments

The date of coverage for employees will be presumed as the month of their first contribution remittance, unless proven otherwise. Employees with no posted contributions before the effectivity of this guideline will not be eligible for benefits unless the date of coverage is verified.

Implications for Employers and Employees

This circular reinforces the importance of employer compliance with SSS obligations. Employers must ensure they register employees, report correct employment dates, and remit contributions timely to avoid penalties and liabilities. Employees, on the other hand, should verify their contributions regularly to ensure their eligibility for benefits when needed.

By adhering to these guidelines, employers can prevent costly liabilities, and employees can secure their rightful benefits under the Social Security Act.

Reference: SSS Circular No.: 2025-001