At least 270,000 employers with delinquent accounts with the Social Security System will gain a six-month reprieve from penalties through the amnesty program being carried out by the pension fund.
“Many employers neglect their duty to remit monthly loan amortizations of employees, so they are still identified as delinquent even if their contribution payments are up-to-date. The loan amnesty is a great opportunity for them to restore their good standing with SSS,” said Emilio de Quiros Jr., president and chief executive officer.
The state pension fund charges a one-percent monthly penalty for loan amortizations that miss the payment deadline, which falls on the 10th day after the applicable month. Delinquent loans incur accruing penalties and interest until fully paid.
The amnesty , which ends on June 30, condones penalties on overdue loan principal and interest. Employers can remit their loan delinquency in full or through installment payments of up to 24 months, with a 3-percent annual interest.
The delinquent employers have a combined workforce of seven million. Nearly 150,000 of them are based in Metro Manila.
Four out of five delinquent loans belong to employed members, based on the profiling study of SSS’ over six million short-term loan accounts.
“Majority of delinquent borrowers are employees who pay contributions but not their loans. The amnesty for employers directly targets the sector comprising the biggest chunk of unpaid loans, which in turn would help SSS cut down the overall delinquency of members,” said De Quiros.
Employers collect and remit their employees’ loan payments through monthly payroll deductions, in line with the terms and conditions they agree to comply with when endorsing member loan applications.
“Companies with delinquent loan amortizations, such as those that deduct loan payments from monthly salaries of workers without remitting them to SSS, are liable under the law and risk ruining their reputations as good corporate citizens,” said De Quiros.
Employers with overdue loan remittances will not be able to get an SSS clearance, which is a requirement for annual renewal of business permits. The loan privileges of their employees will be suspended. –Elaine Ramos Alanguilan, Manila Standard Today
Invoke Article 33 of the ILO constitution
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