Baguio City – Finding the perfect job and the perfect employer to work for can be tough. Often, it’s difficult to find a job that also offers great pay, a good life and work balance, and excellent benefits. However, there are employers and companies out there that can suit all your needs. To find that employer or the company, one should be a good employee, whether you work in an office, in a department store, in a call center or at a fast-food restaurant, it’s important to work hard at your job and be a good employee.
Let’s face it – during labor inspections, the Department of Labor and Employment (DOLE) enforce labor laws and social legislation through the conduct of Routine Inspection, Complaint Inspection and Occupational Safety and Health Investigation and one of the violations frequently encountered is the non-payment of government mandated benefits to employees.
Well, employers whether they like it or not, they have a legal and moral responsibility to provide their workers with government-mandated employee benefits under the Labor Code of the Philippines. Whether you’re a business employer, a household employer, or an HR practitioner, here are important things one needs to know about mandatory employee benefits in the Philippines.
Under the Labor Code of the Philippines, employees are entitled to monetary benefits such as the minimum wage, 13th month pay, and overtime pay, among many others. In addition, the Labor Code also requires employers to become members of the Pag-IBIG Fund, PhilHealth, and SSS, as well as remit monthly contributions on behalf of their employees to these government offices. This ensures that employees have access to affordable house financing, health insurance, and social security benefits, as mandated by the law.
My Rotarian brother Rolando Wong popularly known as “Chongloi” asked me, “Who can receive mandatory employee benefits?” I told him that as far as my memory serves me right, all employed persons under the age of 60 who earn a monthly income of more than P1,000.00 are required to contribute to the Pag-IBIG Fund, PhilHealth, and SSS. Government employees under the retirement age of 65 and officers of the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Bureau of Fire Protection (BFP), Bureau of jail Management and Penology (BjMP), and the Philippine Coast Guard (PCG) who are under the age of 60 are mandated by law to contribute to the GSIS.
So both private and government employees must contribute to the Pag-IBIG Fund and PhilHealth. Membership is optional, however, for self-employed persons, Overseas Filipino Workers (OFWs), and Non-Working Spouses (NWSs). Foreign nationals working in the Philippines must also make contributions to SSS, HDMF, and PhilHealth. Membership is mandatory unless exempt under some of the Philippines’ Totalization Agreements.
I told Chongloi, as an employer, whenever you hire a new employee, you are required to update the following government agencies about his new employment to the Bureau of Internal Revenue (BIR), SSS, Philhealth and Pag-ibig Fund.
Here are the steps you need to do to ensure the employee is properly reported to concerned government agencies. For employee registration, first thing you need to do for your employees is to update their employment status at the BIR. If the employee has no Tax Identification Number (TIN) yet, you need to require the employee to file BIR Form 1902 to the revenue district office (RDO) where your company is registered. If the new employee has TIN No. with a previous employer registered in the same RDO as your company or establishment, either your employee or Human Resource personnel need to submit BIR Form 2305 to update his/her information. If the new employee already has a TIN number but his/her previous employer is registered in a different RDO as your company, then the employee will need to submit a BIR Form 1905 in the RDO where his previous employer is registered.
For PhilHealth, all employees are required to be contributors of this service (Republic Act 7875). Members are given health and hospitalization subsidies should they or a dependent be hospitalized. Monthly contributions are based on actual employee monthly salaries and the amount of employee contribution is matched equally by the employer. For employees: each new employee will need to fill up and sign a PHIC form PMRF regardless if the employee is already a PHIC member or not. For PHIC members, they need to submit to you their Philhealth ID number. A filled-out form should be submitted in the PhilHealth office where your company is registered. For Employers, you will also need to fill up and submit a PHIC Form ER2 that contains the list of your new employees. The PHIC Form ER2 should be submitted in the PHIC office where your company is registered or you can submit it online through their online portal.
All employees hired by private companies are required to become an SSS member (Republic Act No. 8282). This system aims to protect its members for when they are unable to work such as sickness, disability, maternity, old age, and death, or other such contingencies not stated but will result in loss of income or result to a financial burden. The amount of SSS monthly contribution is determined from the actual monthly salary an employee receives — 30% of total monthly contribution is deducted from an employee’s salary, while 70% is subsidized by the employer. Before you can update your employee’s SSS, you need to ask for your employee’s SSS number. If your new employee is not yet an SSS member, you should require him/her to register in the SSS office where your company is registered. You, as the employer, will also need to fill up and submit an SSS Form R1A that contains the list of your new employees with their respective SSS number. The SSS Form R1A should be submitted in the SSS office where your company is registered or you can also do it online using their online portal for employers.
Employers are also required to contribute, on behalf of their employees, to the PagIbig Fund (Republic Act 7835) provides the lowest interest housing and land acquisition loans to its members that are payable for up to 30 years. This gives every Filipino worker an opportunity to own a house in easy-payment plans that can directly be deducted from their monthly wages. For new employees, they can register as a new member online. All your new employees can be easily updated through the Pag-ibig online web portal. Or you can just add the employee in the HDMF Form MCRF, and then mark as NH (Newly Hire), when you are filing the monthly HDMF contribution.
END/Patrick T Rillorta