Delinquent employers on the rise

There is an alarming increase in the number of employers throughout the country who are not complying with the provisions of the labor and social security laws to the detriment of their workers. More than half or 52 percent of the companies inspected are not paying the correct minimum wage as mandated by law while about 160,000 delinquent employers are not paying social security contributions for their employees. Two years ago, the violation of nonpayment of the minimum wage was ranged from 40 percent to 46 percent nationwide. Last year, the Social Security System (SSS) sued a total of 1,418 companies or up by 16 percent from 1,227 companies sued in 2011 for violation of the SSS law.

The Department of Labor and Employment (DOLE) reported that more than half of the 343 companies inspected in Metro Manila alone are not complying with the prevailing minimum wage. The same report revealed that in the Ilocos region and southern Tagalog the minimum wage violation went as high as 63 percent and 83 percent respectively. According to the National Wages and Productivity Commission (NWPC), the average daily minimum wage in the country is P290.85, way below the estimated family wage of P1,222.00 per day, based on IBON's estimate.

The Regional Tripartite Wages and Productivity Board (RTWPB), an attached agency of the DOLE that determines the minimum wage in each and every region of the country, also reported the following minimum wage rates for non-agricultural sector workers as of May 2013: NCR (456.00), R-01 (253.00), R02 (255.00), R03 (336.00), R04-A (349.50), R04-B (275.00), R05 (252.00), R06 (277.00), R07 (327.00), R08 (260.00), R09 (267.00), R10 (286.00), R11  (301.00), R12 (270.00), R13 (268.00), ARMM (232.00), and CAR (280.00). The NCR registered the highest daily minimum wage of P456.00 while the ARMM has the lowest at P232.00 among the regions. In the meantime, the International Labor Organization (ILO) ranked the average monthly wages in the Philippines as the third lowest among 72 countries in the world at P11,700 or US $279, only slightly higher than the average monthly wages of Tajikistan and Pakistan.

For more than two decades the real value of the workers' minimum wage has remained stagnant. It has been eroded with the continuous increase in prices of prime commodities and utilities. Hence, the series of wage adjustments set by the RTWPB since 1989 are not enough to offset wage erosion and price increases. Even with the minimum wages in place, statistics showed that about 71 percent of Filipinos do not earn enough to meet their families' daily basic needs.

Consequently delinquent employers defraud the workers on three counts: by not reporting their employees for SSS coverage, by not paying their counterpart share of contributions as employers and by deducting from the salaries of their workers the employee's share but not remitting them to the SSS. The employers, in effect, are robbing the workers blind of their hard-earned money. But the worst part is that workers and their dependents are deprived of their social security benefits due to nonpayment of SSS contributions.

Republic Act No. 8282 or the Social Security Act of 1997 provides penalties for violations of this Act. Under the law, an employer who fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Social Security Commission, the policy-making body of the SSS vested with quasi-judicial powers, shall be fined of not less than P5,000 but not more than P20,000 or imprisonment of not less than six years but not more than twelve 12 years or both, at the discretion of the court. If the employer fails or refuses to report his employees for SSS coverage, the same penalties shall be imposed.

For a graver offense such as, if the employer, after deducting the monthly contributions or loan amortizations from the salaries of his employees but fails to remit the same contributions or amortizations to the SSS within 30 days from the date they became due, he shall be presumed to have misappropriated such funds. As a consequence, the employer is liable for a crime of swindling or estafa punishable under Section 315 of the Revised Penal Code. Swindling or estafa carries a heavier penalty ranging from prision correccional in its maximum period to prision mayorin its minimum period if the amount of fraud is over P12,000 but does not exceed P22,000. In excess of this amount, one year is added for each additional P10,000 but the total penalty shall not exceed 20 years in prison.

Delinquent employers, who, in their desire to maximize profit at the expense of their workers, refuse to pay the minimum wage for their employees are liable for violation under the Labor Code. In the same manner that employers who fail to report their employees for SSS coverage, pay the corresponding contributions and remit them to the SSS are liable under the SSS Law. Those affected workers should report their employees or file complaints to appropriate agencies in order to protect their rights under the law.