Labor Standards _ SSS Law PDF

CRC-ACE The CPA Professional Review School __________________________________________________________________ I. LABOR STANDARDS II. SOCIAL SECURITY LAW I. LABOR STANDARDS - Refers to the minimum requirements prescribed by exi...

CRC-ACE The CPA Professional Review School __________________________________________________________________ I. LABOR STANDARDS II. SOCIAL SECURITY LAW I. LABOR STANDARDS - Refers to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost-of-living allowance and other monetary and welfare benefits, including occupational, safety and health standards Employment Contract - Four-Fold Test 1.Selection and engagement of employee 2.Payment of Wages 3.Power of dismissal 4.Power to control the employee’s conduct STATUTORY MINIMUM WAGE - the lowest wage fixed by law that an employer can pay his workers. (LATEST IN NCR Php570) CONDITIONS OF EMPLOYMENT RULE: Working Conditions shall apply to employees in all establishments and undertakings whether for profit or not. A. HOURS OF WORK SHALL INCLUDE: 1. All time during which an employee is required to be on duty or to be at a prescribed workplace 2. All time during which an employee is suffered or permitted to work. NOT COVERED: 1. Government employees 2. Field Personnel 3. Managerial Employees 4. Officers and Members of the managerial staff 22  CRC-ACE The CPA Professional Review School __________________________________________________________________ 5. Members of the family of the employer who are dependent on him for support 6. Persons in the personal service of another 7. Workers who are paid by result as determined by DOLE regulation 8. Domestic workers or kasambahay (R.A. No. 10361) i. NORMAL HOURS OF WORK - shall not exceed eight (8) hours a day Exception: Work Hours of Health Personnel in: a. Cities and municipalities with a population of at least one million (1,000,000) OR b. Hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals. REST DAY - It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days ii. NIGHT SHIFT DIFFERENTIAL - the additional compensation of 10% of an employee’s regular wage for each hour of work performed between 10pm and 6am. NOTE: those employed in retail and service establishments regularly employing not more than five (5) workers are also NOT entitled to Night Shift differential RELATED RULES: 1. Rest day - Night shift employees are entitled to a weekly night-off or a weekly rest period of 24 hours beginning at the start of the night shift 2. Work on special days - Night shift employees are also entitled to the premium pay on special days and holidays. These days are reckoned 23  CRC-ACE The CPA Professional Review School __________________________________________________________________ as calendar days which start at midnight and end at the following midnight. The premium pay for the night shift also starts or ends at midnight. However, the employment contract, company policy or CBA may provide that in the case of night shift workers, days—including special days and regular holidays—shall begin on the night before a calendar day. iii. OVERTIME COMPENSATION - additional pay for service or work rendered or performed in excess of eight hours a day a. OVERTIME ON ORDINARY WORKING DAY - Additional 25% of the basic hourly rate. b. OVERTIME WORK ON REST DAY/HOLIDAY - Additional 30% of the basic hourly rate GENERAL RULE: An employer cannot compel an employee to work overtime EXCEPTION: EMERGENCY OVERTIME: 1. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; 2. When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; 3. When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; 4. When the work is necessary to prevent loss or damage to perishable goods; and 5. Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer IMPORTANT: 1. Overtime pay does not preclude night differential pay 2. Undertime does NOT offset overtime 24  CRC-ACE The CPA Professional Review School __________________________________________________________________ RELATED RULES. 1. MEAL BREAK - NON-CONPENSABLE - it is the duty of every employer to give his employees not less than sixty (60) minutes time- off for their regular meals. The 8-hours work period DOES NOT include the meal break. 2. REST PERIODS or COFFEE BREAKS running from five 5 to 20 minutes shall be considered as compensable working time 3. POWER INTERRUPTIONS OR BROWNOUTS - short duration not exceeding 20 minutes, shall be treated as hours worked, whether used productively by the employees or not. If they last more than 20 minutes, the time MAY NOT be treated as hours worked if: a. The employees can leave their workplace or go elsewhere whether within or without the work premises; OR b. The employees can use the time effectively for their own interest. Management prerogative - the employer may extend the working hours beyond the regular schedule on that day to compensate for the loss of productive man-hours without being liable for overtime pay. 4. TRAVEL FROM HOME TO WORK – An employee who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home-to- work travel which is NOT considered hours worked. HOWEVER: a. Time spent by an employee in travel FROM JOBSITE TO JOBSITE during the workday, must be counted as hours worked. b. Travel that keeps an employee away from home overnight is TRAVEL AWAY FROM HOME. Travel away from home is worktime when it cuts across the employee’s workday. c. Attendance in seminars, lectures, meetings, and training periods sanctioned or required by the employer are considered hours worked. 25  CRC-ACE The CPA Professional Review School __________________________________________________________________ B. PREMIUM PAY -Additional compensation for work performed within 8 hours on non- work days, such as rest days and special days. 1. REGULAR HOLIDAYS a. Employee’s REGULAR WORK DAY i. DID NOT work - Regular pay ii. RENDERED work - 200% iii. OVERTIME - additional 30% hourly rate on the said day b. Employee’s REST DAY i. DID NOT work - Regular pay ii. RENDERED work - 200% +30% of 200% iii. OVERTIME - additional 30% hourly rate on the said day 2. SPECIAL NON-WORKING HOLIDAYS a. Employee’s REGULAR WORK DAY i. DID NOT work - NO WORK NO PAY ii. RENDERED work - 130% iii. OVERTIME - additional 30% hourly rate on the said day b. Employee’s REST DAY i. DID NOT work - NO WORK NO PAY ii. RENDERED work - 150% iii. OVERTIME - additional 30% hourly rate on the said day 3. SPECIAL WORKING HOLIDAYS - employees shall receive only their daily wage without premium pay even if employees worked on that day. 4. DOUBLE HOLIDAY PAY a. If unworked, 200% of basic wage. 26  CRC-ACE The CPA Professional Review School __________________________________________________________________ b. If worked, 300% of basic wage. REGULAR HOLIDAYS 1. New Year’s Day – Jan. 1 2. Maundy Thursday – Movable date 3. Good Friday – Movable date 4. Araw ng Kagitingan – Monday nearest Apr.9 5. Labor Day – Monday nearest May 1 6. Independence Day – Monday nearest June12 7. Eid’l Fitr – Movable date 8. Eid’l Adha – Movable date 9. National Heroes Day – Last Monday of August 10. Bonifacio Day – Monday nearest Nov. 30 11. Christmas Day – Dec. 25 12. Rizal Day – Monday nearest Dec. 30 SPECIAL (NON-WORKING DAYS) 1. Ninoy Aquino Day – Monday nearest Aug.21 2. All Saints Day – Nov. 1 3. Immaculate Conception of Mary Dec. 8 4. Last day of the year – Dec. 31 C. SERVICE CHARGE Applicable only to establishments which collect service charges such as: a. Hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses; b. Similar enterprises including those entities operating primarily as private subsidiaries of the Government NOTE: 1. All employees except managerial employees shall receive a share in the service charge collected. 2. Service charges shall be distributed completely and equally among the workers based on actual hours or days of work or service rendered. 27  CRC-ACE The CPA Professional Review School __________________________________________________________________ 3. The shares shall be distributed to employees not less than once every 2 weeks or twice a month at intervals not exceeding 16 days. D. BONUS, 13TH MONTH PAY General Rule: A BONUS is an act of gratuity on the part of the employer, and is a management prerogative which cannot be forced upon the employer. Exception: Bonus to be enforceable: 1. It must have been promised by the employer and expressly agreed upon by the parties; 2. It must have had a fixed amount and had been a long and regular practice on the part of the employer. 13TH MONTH PAY PD 851 and the Revised Guidelines on the Implementation of the 13th Month Pay Law RULE: ALL EMPLOYERS are hereby required to pay all their rank and file employees a 13th month pay not later than Dec 24 of every year, Provided that they have worked for at least one (1) month during a calendar year. EXEMPTED EMPLOYERS: a. Government, its political subdivisions, including GOCCs except those operating essentially as private subsidiaries of the Government b. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance; and c. Employers of those who are paid on purely commission, boundary or task basis and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof. NOTE: workers who are paid on piece-rate are entitled to 13th month pay. MINIMUM AMOUNT - 1/12 of the total basic salary within a calendar year TIME OF PAYMENT - not later than Dec 24 of each year 28  CRC-ACE The CPA Professional Review School __________________________________________________________________ RELATED RULES: 1. Government Employees working part time in a private enterprise, including private educational institutions, as well as employees working in two or more private firms, whether on full or part time bases, are entitled to the required 13th Month Pay from all their private employers regardless of their total earnings from each or all their employers. 2. An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from service. E. LEAVES 1. SERVICE INCENTIVE LEAVE (SIL) - Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. - The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year. EXCEPTION: a. Those of the government and any of its political subdivisions, including GOCCs b. Domestic helpers and persons in the personal service of another c. Managerial employees d. Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof; e. Those who are already enjoying the benefit f. Those enjoying vacation leave with pay of at least 5 days 29  CRC-ACE The CPA Professional Review School __________________________________________________________________ g. Those employed in establishments regularly employing less than 10 employees. NOTE: DOMESTIC WORKERS are entitled to annual SIL of five days to, but their SIL shall not be converted to cash or carried over to succeeding years. (R.A. No. 10361) 2. SPECIAL LAWS a. PARENTAL LEAVE FOR SOLO PARENTS (R.A. No. 8972) Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required. Conditions to be entitled: 1. He/she has rendered at least one (1) year of service, whether continuous or broken; 2. He/she has notified his/her employer that he/she will avail himself/herself of it, within a reasonable period of time; and 3. He/she has presented to his/her employer a Solo Parent Identification Card, which may be obtained from the DSWD office of the city or municipality where he/she resides NOTE: The parental leave is in addition to leave privileges under existing laws with full pay, consisting of basic salary and mandatory allowances. It shall not be more than seven (7) working days every year. b. EXPANDED MATERNITY LEAVE (R.A. No. 11210) Maternity leave of 105 days with full pay, with an option to extend for an additional 30 days without pay i. Coverage: Every female worker in government and the private sector, including those in the informal economy, regardless of civil status or the 30  CRC-ACE The CPA Professional Review School __________________________________________________________________ legitimacy of her child, is entitled to the maternity leave benefits. The benefit is applicable to pregnancy and miscarriage, or emergency termination of pregnancy, regardless of frequency. FEMALE WORKERS IN PRIVATE SECTOR, REQUIREMENTS: 1. PAYMENT of at least 3 monthly contributions in the 12-month period immediately preceding the semester of her childbirth, miscarriage, or emergency termination of pregnancy. 2. NOTICE must be given to the employer of the pregnancy and the probable date of childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide. EXCEPTION: Medical emergency, but subsequent notice shall be given to the employer. NOTE: Terminated employees who had childbirth or miscarriage for not more than 15 days after her service is terminated is STILL ENTITLED to the benefit. ii. Time of availment: 1. Earliest time is 45 days before the expected date of delivery. 2. Latest time is 60 days after delivery. iii. Benefits: 1. A daily maternity benefit equivalent to 100% of her average daily salary credit for: a. 105 days in cases of live childbirth b. 60 days in cases of miscarriage or emergency termination of pregnancy 2. Option to extend to an unpaid maternity leave of 30 days after their paid maternity leave. 3. Solo parent employee is entitled to an additional 15 days of paid maternity leave. 4. Option to allocate 7 days of the maternity leave to her partner regardless of sexual orientation, spouse or alternate caregiver up to 4th level of consanguinity. iv. RULES: 31  CRC-ACE The CPA Professional Review School __________________________________________________________________ 1. The employer shall advance the full payment subject to reimbursement by the SSS within 30 days from filing of leave application 2. The SSS shall immediately reimburse the employer the maternity benefits advanced to the employed female member, only to the extent of 100% of her average daily salary credit for 105 days, 120 days or 60 days, as the case may be, upon receipt of satisfactory and legal proof of such payment. 3. Availment shall be a bar to the recovery of sickness benefits from SSS for the same period for which daily maternity benefits have been received. 4. Employers who will not comply with the law may be penalized by a fine of Php 20,000 to Php 200,000 or imprisonment for at least 6 years and 1 day or not more than 12 years. Non-renewal of employer’s business permit is another penalty. c. PATERNITY LEAVE (R.A. No.8187) Leave of 7 calendar days with full pay for every MARRIED male employee in the private and public sectors. Conditions for entitlement: 1. He is married 2. He is an employee at the time of the delivery of his child 3. He is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage 4. He has applied for paternity leave with his employer within a reasonable period of time from the expected date of delivery by his pregnant spouse, or within such period as may be provided by company rules and regulations, or by CBA; and, 5. His wife has given birth or suffered a miscarriage. Related Rules: 1. Paternity leave is separate from the allocation of maternity leave of 7 days 32  CRC-ACE The CPA Professional Review School __________________________________________________________________ 2. In the event that the paternity leave is not availed of, it shall not be convertible to cash and shall not be cumulative 3. Cohabiting means the obligation of the husband and wife to live together. 4. In case of miscarriage, prior application for paternity leave shall not be required. d. OTHER LEAVES UNDER SPECIAL LAWS 1. Gynecological Leave (R.A. 9710 – Magna Carta for Women) A female employee’s leave entitlement of 2 months with full pay from her employer based on her gross monthly compensation following surgery caused by gynecological disorders, provided that she has rendered continuous aggregate employment service of at least 6 months for the last 12 months. 2. Battered Woman Leave ( R.A. No. 9262 – VAWC) Victims of any of the acts covered by VAWC shall be entitled to take a paid leave of absence up to 10 days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations, extendible when the necessity arises as specified in the protection order II. SOCIAL SECURITY SYSTEM LAW (R.A. No. 8282 as amended by R.A. No. 11199) 1. COVERAGE A. COMPULSORY COVERAGE i. EMPLOYEES not over 60 years old and their employers, including domestic helpers NOTE: 1. Any benefit already earned by the employees under private benefit plans existing at the time of the approval of 33  CRC-ACE The CPA Professional Review School __________________________________________________________________ this Act (RA11199) shall not be discontinued, reduced or otherwise impaired. 2. Private plans which are existing and in force at the time of compulsory coverage shall be integrated with the plan of the SSS, in such a way where the employer’s contribution to his private plan is more than required of him in this Act: a. He shall pay to the SSS only the contribution required of him; and b. He shall continue his contribution to such private plan less his contribution to the SSS c. So that the employer’s total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before the compulsory coverage. 3.Domestic workers who are receiving a monthly income lower than minimum salary credit prescribed under this Act, shall pay contributions based on their actual monthly salary. ii. SELF-EMPLOYED PERSONS, including but not limited to: a. All self-employed professionals b. Partners and single proprietors of businesses c. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term “employee” under this Act d. Professional atheism coaches, trainers and jockeys e. Individual farmers and fishermen iii. All sea-based and land-based Overseas Filipino Workers (OFWs) not over 60 years of age B. VOLUNTARY COVERAGE i. Spouses who devote full time to managing household and family affairs, unless they are also engaged in another vocation or employment 34  CRC-ACE The CPA Professional Review School __________________________________________________________________ ii. Employees previously under compulsory coverage) already separated from employment or those self-employed with no realized income for a given month, who chose to continue with contributions to maintain the right to full benefit. iii. Self-employed members realizing no income in any given month, who choose to continue paying contributions under the same rules and regulations applicable to a separated employee member. C. EXCLUDED FROM SSS LAW 1. Services where there is no employer- employee relationship in accordance with existing labor laws, rules, regulations and jurisprudence; 2. Service performed in the employ of the Philippine Government or instrumentality or agency thereof; 3. Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentalities; and 4. Services performed by temporary and other employees which may be excluded by regulation of the Social Security Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors 2. DEPENDENTS and BENEFICIARIES A. Primary 1. Dependent spouse - until remarriage 2. Dependent children - Illegitimate children are entitled only to 50% of the share of legitimate children. Where there are no legitimate children, the illegitimate children get 100%. B. Secondary 1. Receives only when the primary beneficiaries are absent 2. Dependent parents 35  CRC-ACE The CPA Professional Review School __________________________________________________________________ C. Others 1. Receives only when primary and secondary beneficiaries are absent 2. Any other person designated by member as his/her secondary beneficiary. [ 3. BENEFITS A. MONTHLY PENSION The monthly pension shall be the highest of the following amounts: 1. P300 + [20% x (average monthly credit)] + [2% x (average monthly credit) x (# of cash credit years of service in excess of 10 years)] 2. 40% x [average monthly credit] 3. P1000, provided that the monthly pension shall in no case be paid for aggregate amount of less than 60 months 4. MINIMUM PENSION: a. P1,200 - members with at least 10 years credit service b. P 2,400 - members with at least 20 years B. DEPENDENTS' PENSION 1. Paid on account of member’s a. Death b. Permanent total disability, or c. Retirement 2. Paid to each child conceived on or prior to contingency, but not exceeding 5, beginning with the youngest and preferring the legitimate 3. Amount is either P250 or 10% of the monthly pension, whichever is higher. C. RETIREMENT BENEFITS – Entitled from retirement until death Requisites for Eligibility: 36  CRC-ACE The CPA Professional Review School __________________________________________________________________ 1. 120 monthly contributions 2. Age a. Has reached the age of 60 years and is already separated from employment or has ceased to be self- employed; or b. Has reached the age of 65 years In Case of Death of Member: 1. His/her primary beneficiaries as of the date of his/her retirement shall be entitled to receive the monthly pension; 2. If he/she has no primary beneficiaries AND he/she dies within 60 months from the start of his/her monthly pension, his/her secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5 year guaranteed period, excluding the dependents’ pension. NOTE: LUMP SUM ALTERNATIVE The member may opt to receive the first 8 monthly pensions in lump sum but such is discounted at a preferential rate of interest to be determined by the SSS. To be Eligible: A covered member who is 60 years old at retirement and who does not qualify for pension benefits (see requisites for eligibility) shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. MONTHLY PENSION The monthly pension of a member who retires after reaching age 60 shall be the highest of either: 37  CRC-ACE The CPA Professional Review School __________________________________________________________________ 1. The monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or 2. The monthly pension computed at the time when he actually retires. D. OTHER BENEFITS: 1. PERMANENT DISABILITY BENEFITS CONDITIONS: a. 36monthly contributions prior to the semester of disability b. In case the permanently disabled member dies, he/she is given the same treatment as a retiree dying. c. For permanent partial disability, the pension is not lifetime. It shall be paid in lump sum if the period is less than 12 months. d. For multiple partial disabilities, they shall be additive when related or deteriorating - the percentage shall be equal to the number of months the partial disability is entitled to, divided by 75 months. RELATED RULES: 1. Lump Sum Alternative A member is entitled to a lump sum benefit equivalent to the monthly pension x number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher. To be entitled, he must not have paid at least 36 monthly contributions. 2. Subject to compulsory coverage again and considered a new member. A member who: 1. Received a lump sum benefit, and 2. Is reemployed or resumed self-employment not earlier than 1 year from date of disability 38  CRC-ACE The CPA Professional Review School __________________________________________________________________ 2. DEATH BENEFITS Eligibility: 36 monthly contributions prior to the semester of death Benefit: 1. Monthly pension to primary beneficiaries, or 2. If no primary beneficiaries, lump sum equivalent to 36 times the monthly pension to secondary beneficiaries NOTE: If the member has not paid 36 monthly contributions - A lump sum benefit which shall be that which is higher between the ff. will be given to the beneficiaries 1.(monthly pension) x 12, or 2.(monthly pension) x (No. of monthly contributions) 3. FUNERAL BENEFITS - P12,000 in cash or in kind, upon the death of member. 4. SICKNESS BENEFITS Eligibility: 1. Inability to work due to sickness or injury, 2. Confined for more than 3 days either in a hospital or elsewhere with SSS approval 3. At least 3 months of contribution paid in the 12 month period immediately before the semester of sickness or injury 4. All company sick leaves with pay for the current year have been used up; 5. Maximum of 120 days per 1 calendar year (i.e. max permissible for the same sickness and confinement is 240 days for 2 consecutive years) 6. Employer has been notified, or, if a separated, voluntary or self-employed member, the SSS has been directly notified within 5 days from confinement 39  CRC-ACE The CPA Professional Review School __________________________________________________________________ BENEFIT: Daily cash allowance paid for the number of days a member is unable to work due to sickness of injury equivalent to 90% x (average daily salary credit) Reimbursement of SSS to Employer: Upon satisfactory proof of payment and legality of sickness benefits, reimbursement shall be made by the SSS if the following conditions are met: 1. Employer notified SSS of the confinement within 5 calendar days after receipt of the notification from the employee- member - 100% reimbursement 2. If the notification to SSS is made beyond 5 calendar days after receipt of notification from the employee-member - reimbursement only for each day of confinement starting from the 10th calendar day immediately preceding the date of notification to SSS 5. UNEMPLOYMENT INSURANCE OR INVOLUNTARY SEPARATION BENEFITS CONDITIONS: 1. Not over 60 years of age 2. At least 36 months contributions, 12 months of which should be in the 18th month period immediately preceding the involuntary unemployment or separation BENEFIT: Monthly cash payments equivalent to 50% of the average monthly salary credit for a maximum of 2 months FREQUENCY OF CLAIMING BENEFIT: An employee who is involuntarily unemployed can only claim unemployment benefits once every 3 years. 40  CRC-ACE The CPA Professional Review School __________________________________________________________________ NOTE: In case of concurrence of 2 or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe. 4. EXEMPTIONS FROM TAX The SSS and all its assets and properties, all contributions collected, all accruals thereto and income or investment earnings therefrom, as well as supplies, equipment and papers or documents SHALL BE EXEMPT from any tax, assessment, fee,charge, customs or import duty. All benefit payments made by the SSS SHALL BE EXEMPT from all kinds of taxes, fees or charges, and shall not be liable to attachments, garnishments, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, EXCEPT to pay any debt of the member to the SSS. 5. EMPLOYEE’S CONTRIBUTIONS. – RULES: 1. Payable on the last day of the calendar month when an employee’s compulsory coverage takes effect and every month thereafter during his/her employment. 2. The employer shall deduct and withhold from such employee’s monthly salary, wage, compensation or earnings, the employee’s contribution in an amount corresponding to his/her salary, wage, compensation or earnings during the month in accordance with the schedule and the rate of contributions as fixed by SSS. 3. Every employer shall issue a receipt for all contributions deducted from the employee's compensation or shall indicate such deductions on the employee's pay slips or envelopes. 41  CRC-ACE The CPA Professional Review School __________________________________________________________________ 6. EMPLOYER'S CONTRIBUTIONS An employer shall not deduct, directly or indirectly, from the compensation of his/her employees covered by the SSS or otherwise recover from them the employer's contributions with respect to such employees. SUBMISSION OF QUARTERLY COLLECTION LISTS. - The remittance of contributions by the employer shall be supported by a quarterly collection list such as the SSS Form R-3 to be submitted to the SSS at the end of each calendar quarter indicating the following: i. Correct ID number of the employer, ii. The correct names and the SSS numbers of the employees and iii. The total contributions paid for their accounts during the quarter. 7. CONTRIBUTIONS OF THE SELF-EMPLOYED MEMBER RULES: 1.The contributions shall be fixed in accordance with the schedule and the rate of contributions fixed by SSS 2. The monthly earnings declared by the SE member at the time of his/her registration with the SSS shall be considered as his/her monthly compensation and he/she shall pay both the employer and the employee contributions EARNING ONE THOUSAND PESOS OR BELOW. - The contributions of may be reduced, fixed or determined by the SSS 3. The monthly earnings declared by the member at the time of his/her registration shall remain the basis of his/her contribution unless he/she makes another declaration of his/her monthly earnings. 42  CRC-ACE The CPA Professional Review School __________________________________________________________________ 4. The member may opt to pay his/her monthly contributions in advance regardless of the number of months or years. However, he/she shall be required to settle underpayment(s) in the future that result from any policy change affecting the applicable schedule and the rate of contributions for the advance payments made. 8. REMITTANCE OF CONTRIBUTIONS. – - within the first ten (10) days of each calendar month following the month Penalty: TWO PERCENT (2%) PENALTY PER MONTH until paid. PRESCRIPTIVE PERIOD. - The right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be. Related Rules: 1. Self-employed members shall remit their monthly contributions quarterly on such dates and schedules fixed by SSS 2. The deadline for payment of contributions of SE members shall be as follows: i. Contributions for the months of January to September of a given calendar year may be paid up to December 31 of the same year; and ii. Contributions for the months of October to December of a given calendar year may be paid up to January 31 of the succeeding year. 43  CRC-ACE The CPA Professional Review School __________________________________________________________________ 9. COLLECTION AND PAYMENT OF CONTRIBUTIONS. - 1. Payment of contributions and other obligations may be made in cash, checks, stamps, coupons, tickets or other reasonable devices that the SSS may accept and adopt 2. The guidelines in the acceptance of properties offered through dacion en pago shall continue to apply 10. EMPLOYMENT RECORDS AND REPORTS DUTY/LIABILTIY OF AN EMPLOYER. 1. To report names, ages, civil status, occupations, salaries, dependents. 2. To pay damages for failure to report death, retirement, disability or sickness of compulsory covered members NOTE: Any person or entity engaging the services of an independent contractor shall be subsidiarily liable with such contractor for any civil liability incurred by the latter. The same person or entity engaging the services of an independent contractor shall require such contractor to post a surety bond to guarantee the payment of the worker's benefits. 11. PENAL CLAUSES 1. Penalty of P5,000.00 to P20,000.00 and imprisonment for 6 years and 1 day to 12 years. a. Fraudulent acquisition or receipt of money or check b. Failure or refusal to register employees or self-employed individuals c. Failure or refusal to deduct and remit contributions 2. Penalty of P5,000.00 to P20,000.00 and imprisonment for 6 years and 1 day to 12 years or both, at the discretion of the Court: a. Unauthorized purchase, sale, use, transfer, exchange or pledge of stamps, coupons, etc. 44  CRC-ACE The CPA Professional Review School __________________________________________________________________ b. Fraudulent alteration, forgery or counterfeiting of stamps, coupons, etc. c. Non-compliance with the social security act of 2018, IRR and other regulations. 3. Under Penalties under the Revised Penal Code PRESCRIPTION OF ACTIONS: twelve (12) years from the time of the commission of the offense, if known, or from the time of the discovery thereof 12. DEFINITION OF TERMS: 1. EMPLOYER – Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time. 2. EMPLOYEE – Any person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship: Provided, That a self-employed person shall be both employee and employer at the same time. 3. DEPENDENTS – The dependents shall be the following: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally: and 45  CRC-ACE The CPA Professional Review School __________________________________________________________________ (3) The parent who is receiving regular support from the member. 4. COMPENSATION – All actual remuneration for employment, including :he mandated cost-of-living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary credit. 5. MONTHLY SALARY CREDIT – The compensation base for contributions and benefits as indicated in this Act: Provided, That in the computation of benefits, the maximum monthly salary credit to be considered shall be Twenty thousand pesos (₱20,000.00), until adjusted 6. MONTHLY – The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis, ‘monthly’ shall mean a period of one (1) month. 7. CONTRIBUTION – The amount paid to the SSS by and on behalf of the members in accordance with the schedule provided in the law. 8. EMPLOYMENT – Any service performed by an employee for his employer except: (1) Services where there is no employer-employee relationship in accordance with existing labor laws, rules, regulations and jurisprudence; (2) Service performed in the employ of the Philippine Government or instrumentality or agency thereof; (3) Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality: Provided, however, That this exemption notwithstanding, any foreign government, international 46  CRC-ACE The CPA Professional Review School __________________________________________________________________ organization or their wholly-owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the Philippine Government for the inclusion of such employees in the SSS except those already covered by their respective civil service retirement systems: Provided, further, That the terms of such agreement shall conform with the provisions of this Act on coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement; and (4) Such other services performed by temporary and other employees which may be excluded by regulation of the Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the service of said contractors. 9. BENEFICIARIES – The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated or legally adopted children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. 10. CONTINGENCY – The retirement, death, disability, injury or sickness and maternity of the member. 11. AVERAGE MONTHLY SALARY CREDIT – The result obtained by dividing the sum of the last sixty (60) monthly salary credits immediately preceding the semester of contingency by sixty (60), or the result obtained by dividing the sum of all the monthly salary 47  CRC-ACE The CPA Professional Review School __________________________________________________________________ credits paid prior to the semester of contingency by the number of mohthly contributions paid in the same period, whichever is greater: Provided, That the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit. 12. AVERAGE DAILY SALARY CREDIT – The result obtained by dividing the sum of the six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty (180). 13. SEMESTER – A period of two (2) consecutive quarters ending in the quarter of contingency. 14. QUARTER – A period of three (3) consecutive calendar months ending on the last day of March. June. September and December. 15. CREDITED YEARS OF SERVICE – For a member covered prior to January nineteen hundred and eighty-five (1985) minus the calendar year of coverage plus the number of calendar years in which six (6) or more contributions have been paid from January nineteen hundred and eighty-five (1985) up to the calendar year containing the semester prior to the contingency. For a member covered in or after January nineteen hundred and eighty-five (1985), the number of calendar years in which six (6) or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency: Provided, That the Commission may provide for a different number of contributions in a calendar year for it to be considered as a credited year of service. 16. NET EARNINGS – Net income before income taxes plus non-cash charges such as depreciation and depletion appearing in the regular financial statement of the issuing or assuming institution. 17. FIXED CHARGES – Recurring expense such as amortization of debt discount and rentals for leased properties, including interest on funded and unfunded debt. /mrs 48