“Peace in Compliance”
Be at peace as a business owner by staying labor law compliant.
“You cannot pause them (government requirements). They will continue to be a requirement. They will continue to be complied with… Don’t let a lack of support in your back office cause the government to find loopholes in your operations and records that may, in turn, weaken your business.” - Pastor Ron Bayron, What is Back Office and How Does It Help My Business Succeed?
If you are an employee, the most important things you should focus on are showing up at work on time and performing your duties well. But if you are a business owner, it's totally different. There is a lot more to worry about in your company, from determining its future course to managing finances to ensuring that all systems are operating as they should.
As a business owner, you need to maintain peace of mind before you can weigh the pros and cons of any given situation rationally and make good decisions. When the mind is at rest, there is less mental chatter and more opportunity for you to think clearly and be efficient. If you can't focus, you won't be as productive.
And for your peace of mind, we've compiled resources to help your company stay in compliance with labor laws and avoid costly penalties and legal action.
What the Government Is Up To
Employees are encouraged to report employers who violate labor laws by the Department of Labor and Employment (DOLE). DOLE also escalated its inspections of private businesses to ensure compliance with labor standards.
You can watch this video to see the interview with BWC Directory Atty. Alvin B. Curada. (Timestamp 37:47 - 47:47)
tl;dr - Summary
On August 19, 2022, Atty. Alvin B. Curada, Director of BWC, was interviewed on Mr. Aljo Bendijo's public briefing show #LagingHandaPH on PTV Philippines to talk about important national issues.
The conversation centered on the condition of the Department of Labor and Employment's continuing labor inspections. In accordance with President Ferdinand Marcos Jr.'s directives to ensure the protection of investors' and workers' interests, Director Curada stated that the Department of Labor and Employment (DOLE) continues to conduct routine inspections of establishments and compliance visits, especially when there have been complaints lodged against specific businesses.
When asked about the penalties for employers who violate the law, Director Curada stated that they are given the opportunity to make amends. Following the inspection, there will be a correction period to allow the establishment to correct any violations that were found. A mandatory conference will be held to provide parties with due process. If there is still no correction and it is proven that the violation occurred, the regional director will issue a compliance order requiring the establishment to pay the fees for the noted violations.
Curada added that employers have the right to file an appeal with DOLE's Office of the Secretary, and then they will review the documents, pieces of evidence, and employee affidavits.
According to DOLE’s report, as of October 31, 2022, a total of 74,945 establishments had already been inspected by labor inspectors. Notable violations of general labor standards have been found in the areas of record keeping, Pag-IBIG coverage and remittances, PhilHealth coverage, and SSS coverage.
Comply with mandatory government contributions.
SSS, PhilHealth, and PAG-IBIG contributions are deductibles on the employee’s monthly income beginning on the first day they work for your company. It’s important to keep this in mind 😃
You can refer to the Contribution Tables below and schedules per government organization to pay for both your employee’s contributions as well as your own.
Pag-IBIG Fund
Pag-IBIG Contribution Table (2023)
Monthly Compensation | Employee Share | Employer Share |
₱ 1,500 and below | 1% | 2% |
₱ 1,500 to ₱ 4,999 | 2% | 2% |
₱ 5,000 and above | 3% | 3% |
Payment Deadline
First Letter of Employer or Business Name | Due Date |
A to D | 10th to 14th day of the month |
E to L | 15th to 19th day of the month |
M to Q | 20th to 24th day of the month |
R to Z, 0 to 9 | 25th to last day of the month |
How to Pay and Report Pag-IBIG Fund Remittance
The Pag-IBIG Fund has made it easier for you to settle and report payments by offering a variety of payment options.
Method 1: Fill out the form Pag-IBIG Membership Savings Remittance Form (MSRF) when making remittances to Pag-IBIG Fund.
Pay your due through any of Pag-IBIG’s different payment facilities. You can see the complete list and instructions per payment channel through this link.
Method 2: Access Virtual Pag-IBIG for Employers to both pay and report your remittance online. If you don’t have an account yet, register by accomplishing this form and submitting it along with other requirements to any Pag-IBIG branch. You can also contact them so they can assist you.
PhilHealth
PhilHealth Premium Contribution Table (2022)
Monthly Basic Salary | Premium Rate | Total Monthly Contribution | Employee Share |
₱ 10,000 and below | 4% | ₱ 400 | ₱ 225 |
₱ 10,000.01 to ₱ 79,999.99 | 4% | ₱ 400 to ₱ 3,200 | ₱ 225 to ₱ 2,025 |
₱ 80,000 and above | 4% | ₱ 3,200 | ₱ 2,025 |
Payment Deadline
Employer’s PhilHealth Employer Number (PEN) | Due Date |
Employers with PENs ending in 0-4 | Every 11th-15th day of the month following the applicable period |
Employers with PENs ending in 5-9 | Every 16th-20th day of the month following the applicable period |
How to Pay and Report PHIC Remittance
You can pay and report your PHIC remittance either over the counter of any PhilHealth office or online using your EPRS account.
Method 1: Fill out the payment form (PHIC Form RF1 Employer’s Remittance Report) and pay your contributions to one of the authorized collecting agents in your area or directly at the counter of any PhilHealth office on or before the due date.
Method 2: Access the Electronic Premium Remittance System (EPRS) program for payments and submission of reports. If you don’t have an account yet for log in, you can register at ePOAF.
SSS (Social Security System)
*WISP stands for Worker's Investment and Savings Program
Here’s an Excel file of the SSS Contribution Table (2023)
Download the SSS Contribution Table →
Payment Deadline
For regular employers, the deadline for SSS contribution remittance is on the last day of the month following the applicable month. If it falls on a Saturday, Sunday, or holiday, you can remit on the next working day.
How to Pay and Report SSS Remittance
Although you can still choose to remit your contributions at any SSS branch office, the agency has been encouraging members and employers to settle their dues using their online channels through the payment facilities.
Method 1:
- Fill out the form SSS R-5 Employer Contributions Payment Return Form in three copies.
- Remit your monthly contributions through an SSS branch office with a tellering facility, accredited bank, or authorized payment center.
- Submit a copy of validated SSS R-5 form with its receipt and corresponding Contribution Collection List (Form R-3) or R-3 file stored in a USB Flash Drive within 10 days after the applicable quarter to the nearest SSS branch office.
Method 2:
- Create your SSS Contribution Collection List online through accessing the SSS Employer Portal.
- If you don’t have login credentials yet, you can register here.
- Using the SSS Employer Portal, generate a Payment Reference Number (PRN) file.
- Once paid, you will not need to submit R-5 and R-3 files.
Bring a printed copy of it with you when you pay your contributions at any SSS branch office, accredited bank, or authorized payment center.
Penalties for Late Payment and Non-Compliance
We want to avoid penalties for non-compliance as much as possible. Here are some penalties for each government agency when we fail to comply with the contributions.
Penalties for late payment:
Government Agency | Penalty |
Pag-IBIG | 1/10 or 1% per day |
PhilHealth | 2% per month |
SSS | 3% per month |
Penalties for refusal or failure to remit contributions without lawful cause:
Government Agency | Penalty |
A fine of 2 times the amount involved, or imprisonment for not more than 6 years, or both, in addition to the civil liabilities and/or duties of the offender or delinquent. | |
A fine of ₱ 5,000.00 to ₱ 10,000.00 multiplied by the total no. of employees of the company for non-remittance, under-remittance, or selective remittance of premiums or non-submission or posting of remittance reports. | |
A fine of ₱ 5,000.00 to ₱ 20,000.00, or imprisonment for at least 6 years and 1 day and not more than 12 years, or both. |
Government Agency | Penalty |
A fine of not less than twice the amount involved and not more than twice the amount involved, or imprisonment for not more than six (6) years, or both, at the court's discretion, in addition to the civil liabilities and/or duties of the offender or delinquent | |
A fine of at least Five Thousand Pesos (₱ 5,000.00) and no more than Ten Thousand Pesos (₱ 10,000.00) multiplied by the total number of employees of the company for non-remittance, under-remittance, or selective remittance of premiums or non-submission or posting of remittance reports. | |
A minimum fine of Five Thousand Pesos (₱ 5,000.00) and not more than Twenty Thousand Pesos (₱ 20,000.00), or imprisonment for at least six (6) years and one (1) day and not more than twelve (12) years, or both, at the court's discretion. |
Just think about it.
Just think about the amount of time consumed, the stress, and the hassle if you did all of these manually.
You may be wondering, "Is there a simpler and faster way to do these?”
YES!
This is the good news for you.
There is a simplified, convenient, and more efficient way to do these.
Automated SSS, PhilHealth, and Pag-IBIG Contributions
Free yourself from the burden of overthinking whether your business will pass the government’s inspection or violate general labor standards such as record-keeping, Pag-IBIG coverage and remittances, PhilHealth coverage, and SSS coverage.
By automating statutory contributions in your payroll, you can easily avoid the risk of non-compliance.
YAHSHUA solutions will give you the peace of mind you have been looking for.
Watch this video for a better understanding.
Automated Statutory Contribution
(Embed video of that feature)
What else do I need to prepare for a DOLE inspection?
List of documents you need to prepare:
- Roster of the workers (regular, probationary, temporary, casual, piece rate, contractual, etc.), their designation, date hired, and wage rate;
- Payrolls and/or vouchers;
- Daily Time Records and/or Time Sheets;
- Payslips;
- Last Notice of Results, if any;
- Proof of payment of 13th month pay/ five (5) days service incentive leave pay;
- Proof of payment/remittance of SSS/PHILHEALTH/HDMF contributions;
- Registration under Rule 1020 of the Occupational Safety and Health Standards;
- Certificate of Accredited Safety Officer/First Aider;
- Organization of Safety & Health Committee under Rule 1040 of the Occupational Safety and Health Standards;
- Annual Work Accident/Illness Exposure Data Report/Annual Medical Report;
- Drug-Free Workplace Policy and Program (D.O. 53-03)/HIV/AIDS Program/Anti-Sexual Harassment Law;
- Apprenticeship Agreements/Learnership Agreements, if any;
- List of Resident and Non-resident alien workers, their citizenship, nature of employment and status of stay;
- Employment permit for Non-resident alien(s);
- Registration of resident alien(s);
- Collective Bargaining Agreement, if unionized establishment;
- Registration under Department Order 174 (or 18-A) for Job Contractors;
- Service Agreement under D.O. 174 (or 18-A);
- Contractor's Bond to answer for wages due to the workers;
- Employment Contracts with physicians, dentists, nurses and/or first aiders, if applicable;
- Contract with infirmary and emergency hospitals, if applicable;
- Proof of service charge distribution, if applicable;
- Records of leave benefits on sickness, maternity, paternity and solo parent;
- Company policy and/or practice on voluntary benefits; and
- Securities and Exchange Commission Certificate or Department of Trade and Industry Certificate and Mayor’s Permit.
You can find more information by clicking on the following links.
Handbook on Workers’ Statutory Monetary Benefits https://bwc.dole.gov.ph/images/Handbook/2022_02_22_Handbook_on_Workers_Statutory_Monetary_Benefits_2022_edition.pdf
Manual on Labor Laws Compliance System and Procedures for Uniform Implementation
Labor Code of the Philippines
Closing
When you know how to comply with labor regulations you won’t have to worry about fines, penalties, or lawsuits! The easiest way to do this is of course by having a system that can take care of this for you. You can then focus your efforts on expanding your business and enjoying quality time with the people who matter most to you. Get started today and live a worry-free life!
Disclaimer
All content presented in this article is for informational and general discussion purposes only and may become obsolete due to the ongoing development of government laws, rules, and regulations. It is not intended to replace professional or legal counsel.