Private sector workers are deprived of social security protection when their employers do not report them for coverage and fail to remit the employee-employer contributions to the Social Security System (SSS). In times of contingency, employees cannot avail of SSS benefits such as sickness, maternity, disability, retirement and death as well as the same kind of benefits under the Employees Compensation program for work-related injury or death. They are also denied of loan privileges such as salary, educational, calamity and other loan programs of the SSS.
A sickness benefit is a daily cash allowance granted to qualified members as replacement of lost income due to sickness or injury. There are two types of disability - permanent partial and permanent total to be paid in lump sum or monthly pension depending on the member's qualification based on the findings of the doctor and the number of contributions paid to the SSS. Upon reaching the age of 60, if no longer employed, or 65 whether employed or not, a member receives a monthly pension for life if he has paid at least 120 monthly contributions. When a member or pensioner dies, his primary beneficiary will also receive a lump amount or monthly pension. Aside from monthly pension, the SSS also grants funeral benefit to whoever paid the burial expenses of the deceased member.
So, there's a lot to lose if a worker is not a member of the SSS. An employee works for a company not only to earn his upkeep but also to provide a safety net for the future when he is no longer capable of working and no more source of income. The essence of social security is precisely to provide this safety net for private sector workers in the country. But there are employees who do not want their meager salaries deducted for SSS contributions citing as reason that it is a big drain to their take-home pay. It is also for this reason that employers take advantage by citing their employees' reluctance to be deducted as reason for not paying SSS contributions especially when SSS field inspectors come to visit them. But the law is very clear on this. It is the sole responsibility for employers to deduct and remit SSS contributions whether their employees like it or not. Failure to do so, the employers commit an illegal act punishable under the Social Security Law or Republic Act No. 8282.
To clear some misconceptions, social security program is not an insurance. In the case of insurance, the higher the premium contributions paid, the bigger amount the benefits received such as in the case of the Government Service Insurance System (GSIS) or any private insurance companies. Social security operates on a principle of cross-subsidy wherein the young subsidizes the old and the healthy for the sickly based on the assumption that every member will inevitably pass the cycle anyway. Contrary to the concept of insurance, a qualified member of the SSS gets higher amount of benefits even with lesser amount of contributions. That's why the SSS, aside from building up a big reserve fund, should invest in high-yielding and secured investment portfolio in order to be able to pay future benefits and at the same time to maintain the solvency of its funds. The SSS should not wait for a time when it will resort to 'pay-as-you go basis' meaning, the contributions collected for a given year is barely enough to pay benefit payments and loans.
To increase the rate of SSS contributions at this time is counterproductive and will surely meet a lot of resistance from both the employers and their workers themselves. The SSS should follow what the Bureau of Internal Revenue (BIR) did to increase its revenue collection - go after delinquent taxpayers. In the case of SSS, it should go after delinquent employers who do not report their employees for coverage and fail to deduct and remit the employee-employer contributions. There are employers who cheat their employees without the slightest twinge of guilt. The most notorious of which are the contractors and subcontractors.
Under the Social Security Law of 1997, any employer who fails or refuses to report his employees for SSS coverage shall be fined of not less than P5,000 but not more than P20,000 or imprisonment of not less than six years but not more 12 years or both, at the discretion of the court. For grave offense, such as, if the employer, after deducting the monthly contributions or loan amortizations from the salaries of his employees but fails to remit the same contributions or loan amortizations to the SSS within 30 from the date they became due and demandable, the employer shall be presumed to have misappropriated such funds. As a consequence, the employer is liable for a crime of swindling or estafa punishable under Section 315 of the Revised Penal Code.
Workers in the private sector should assert their right for social security protection and file complaints against their employers who do not report them for coverage and remit the necessary contributions to the SSS. Even those who are already separated from employment can still go after their employers provided they can show proof of their employment and the period they were employed. If the SSS, for some reasons or another, would not act on their complaints, they can go to a labor center or non-government organization (NGO). They have lawyers to attend to the legal aspects of the problem. Let it not be said that a worker who retired after years of hard work will not receive any benefits or his beneficiaries deprived of their benefits from the SSS when he died. The cheating employer will only laugh behind the employee's back on his way to the bank to deposit his profit out of the unremitted contributions.
The social security law should also be amended to give more teeth by imposing stiffer penalties for unscrupulous employers who refuse or fail to report their employees for SSS coverage. At present, there are only 1,400 delinquent employers sued by the SSS for violation of the social security law. And I certainly doubt whether a single employer will rot in jail to serve as deterrent what with the kind of justice system that we have. Cheating employers are laughing their way to the bank.