News Release
Department of Labor and Employment
4 August 2019

ECC lowers penalty for unpaid contributions

Labor Secretary Silvestre Bello III has announced the reduction of employers’ penalty imposed by the Employees’ Compensation Commission (ECC) for failure to remit employees’ compensation (EC) contribution to the SSS and GSIS.

From three percent, the penalty has been reduced to two percent.

In a board resolution last month, the ECC revised the schedule of penalties for failure to remit EC contribution to the SSS and GSIS as provided under Republic Act (RA) No. 11199, otherwise known as the Social Security Act of 2018, and Republic Act No. 8291, also known as the Government Service Insurance System Act of 1997, thereby amending Rule V, Sec. 3 (4) of the Amended Rules on Employees’ Compensation.

Failure to pay employees’ compensation premium contribution to the Social Security System or the Government Service Insurance System will now subject employers to a penalty of two percent per month from the date the contribution falls due until paid on top of their unpaid contribution, lowering it from the previous provision which puts the penalty at three percent per month.

“ECC amended its rules on employees’ compensation in response to the penal provisions on the collection of contributions of SSS and GSIS,” Bello who chairs the ECC board said.

The ECC deemed it proper to revise the prevailing percentage or the amount of penalty to be imposed on employers who fail to pay their EC contribution to avoid confusion in regard to the percentage or amount of penalty being enforced by SSS and GSIS.

According to ECC Executive Director Stella Zipagan-Banawis, as the policy-making body of the ECP, ECC will make continuous efforts to improve the program through the formulation of policies and guidelines. “By revising the penalty for unpaid contributions and setting the penalty at uniform rate with SSS and GSIS, the Commission, with its implementing agencies, the SSS and the GSIS can better facilitate the implementation of its EC Program,” Banawis added.

ECC rules and regulations involving the processing of EC claims may be revised by the Commission to facilitate and improve the Employees’ Compensation Program.

#ECC reports from Sandee Angeli Mocorro and Danica Mae Lacson

 

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