Employee
benefit refers to other non-monetary forms of compensation or indirect payments
to employees. However, in the
Philippines the meaning has been blurred by De-Minimis benefits. These
benefits are usually paid by the company but they may also be co-paid with the
employee. For instance, the company may pay in full or share the medical insurance
premium with the employee.
It
is important to note that employee
benefits are usually non-performance based. This means that
employees receive the benefits regardless of their performance. Therefore,
employee benefits as a whole have no direct impact on the employees’
performance.
However,
the benefits that different employees receive in the same company may differ
due to differences in length of service, job responsibilities and job grade.
The
Social Security Program provides a package of benefits in the event of death,
disability, sickness, maternity, and old age. Most frequently claimed benefits
are Maternity Benefit and Retirement Pension. Both employers and employees must pay
contributions to the Social Security System (SSS). Employees must make
contributions to the Social Security Program (SSP), and employers must make
contributions to both the Social Security Program (SSP) and the Employees'
Compensation Program (ECP).
On the first day of an employer's
operations and on the first day an employee's employment, they are deemed to be
included in the compulsory coverage of the Social Security System (SSS) and
must register with the SSS. Employers are required to report all its employees
so that they can be covered in the SSS, which is compulsory upon all employers
and all employees aged 60 years old or less.
It is the employer's responsibility to
remit both:
● The
employee's contribution (for the SSP), which the employer must deduct from the
employee's salary;
● The
employer's own contributions (for both SSP and ECP);
The employer is liable to pay a penalty
charge for failure to remit the contributions in a timely manner. Failure to
register employees or to deduct contributions from the employees' salary and
remit them to the SSS is punishable by a fine and by imprisonment.
Notes: To claim SSS sickness benefit, the
minimum number of absent days should be four (4) days.
Notes: To receive the SSS retirement pension,
the employee should pay the contribution for at least ten (10) years. There are
formula on how to calculate the pension amount but it’s roughly 40~50% of the
monthly salary credit.
Notes: There is SSS contribution table where
you can find exact contribution amount based on the monthly salary. There is a
maximum salary rate cap, your contribution cannot be bigger than this even
though your salary is big.
Notes: It’s not only for Filipinos. Foreign
nationals employed should be registered to SSS also.
Employees’ Compensation Program (ECP)
The
Employees’ Compensation Program (ECP) is a government program designed to
provide a compensation package to public and private sector employees or their
dependents in the event of WORK-RELATED sickness, injury, disability, or death.