Unremitted SSS contributions from delinquent employers down by 40 percent in 2023

Encouraged by the Supreme Court decision upholding the right of the Social Security System (SSS) to take legal action against employers who have been remiss in settling their contribution delinquencies, SSS President and Chief Executive Officer Rolando Ledesma Macasaet ordered an increase in the frequency of its Run After Contribution Evaders (RACE) Campaign nationwide.

“Our RACE Campaign must be working,” Macasaet said as he reported that the amount of unremitted members’ contributions from delinquent employers have plummeted by almost 40 percent in 2023.

Macasaet said that uncollected contributions in 2022 stood at P92 billion, but SSS successfully brought it down by 39 percent to P56 billion in 2023 on the back of aggressively pursuing delinquent employers and continuously updating employer records.

In 2022, the Commission on Audit (COA) called out the SSS for failing to collect over P92 billion from half a million delinquent employers. According to state auditors, 466,881 employers did not remit P92.49 billion in premium contributions, penalties, and damages.

In a statement, Macasaet said the SSS has filed cases in court against 2,422 errant employers, majority of which have opted to settle their delinquencies either through full payment or via installment schemes, resulting in a record-high collection P1.37 billion in 2023 from P1.15 billion in 2022.

Collection from delinquent employers

Macasaet explained that the decrease in unremitted contributions could be attributed to the high collection of delinquencies from employers not remitting their employees’ contributions.

Macasaet also explained that the RACE Campaign is one of the programs that played a vital role in pursuing delinquent employers nationwide.

The SSS chief explained that RACE was an operation conducted by the state fund to ensure that employers comply with their obligation as stipulated in Republic Act No. 11199 or the Social Security Act of 2018.

He said that only selected SSS branch offices conducted RACE campaigns in previous years. Recently, Macasaet said, he ordered the SSS to beef up the initiative by requiring all SSS branch offices nationwide to carry out RACE campaigns in their respective areas.

“We issued Show Cause Orders or Notices of Violation to delinquent employers and instructed them to report to SSS within 15 days to settle their unpaid contributions and corresponding penalties or face legal consequences for violating RA 11199,” Macasaet said. He added that in 2023, SSS conducted 587 RACE operations nationwide and issued written notices to 4,923 delinquent employers.

SC upholds RACE Campaign

Last month, the Supreme Court (SC) rejected an appeal filed by a real estate company, which was found by a lower court to have failed to remit employee contributions to the SSS on time.

In a seven-page resolution, the SC Second Division upheld a decision of the Court of Appeals (CA) against RGV Real Estate Center, Inc. for violating the Social Security Law for failure to remit contributions.

RGV also violated SSS Circular No. 52 for failing to remit salary loan/calamity loan amortizations of its employees. “The SSS is a government agency that is imbued with the salutary purpose of carrying out the State’s policy of establishing, developing, promoting, and perfecting a sound and viable tax-exempt social security system,” the SC resolution said.

The SSS had repeatedly issued Demand Letters seeking the payment of more than P3 million representing employee contributions. RGV availed the condonation program, which allows members with outstanding balances to settle their arrears by installment. In this instance, RGV still failed to comply with the condonation program’s rules.

The Social Security Commission first heard the case and found RGV liable to pay almost P7.5 million in unpaid contributions, interest, and penalties for late remittance.

The CA then ruled the case to be not reviewable. “Needless to say, the entitlement and amount of benefit and privilege of its (SSS) members are adversely affected by the non-remittance of the much-needed contributions. Any divergence from the rule subjects the employer not only to monetary sanctions but also to criminal prosecution,” the SC said.

Macasaet  said the SSS RACE operations have been institutionalized into the mainstream branch operational procedures in addition to systems enhancements made on regular collection, improved interoperability among concerned internal offices/units involved in collection, introduction of the administrative collection remedy of issuance of a Warrant of Distraint, Levy, and Garnishment (WDLG), partnership with various Regulatory & Law Enforcement Agencies through Memorandum of Agreements, and judicial recourse to our Criminal Courts nationwide.

Updating the employers’ list

Aside from improved collection from delinquent employers, Macasaet said that SSS also updated its records since it discovered that many of the reported contribution collectibles were from establishments that no longer operated, resulting in overstated statements of accounts (SOAs) being issued by SSS.

Macasaet added that SSS Account Officers and branch personnel visually inspected the establishments and discovered that many of these businesses had ceased operations.