Legal Basis of Deduction of Mandatory Contributions from the Salary Differential Under the Expanded Maternity Leave Law (EMLL)
Legal basis of deduction of mandatory contributions on account of implementation of the expanded maternity leave law may be found in the new SSS law, the EMLL, amended PhilHealth and the Pag-Ibig law.
In this post, the old rates under older laws cited may be shown but these may have already been amended. But the point of citing them here is to show the provision supporting the act of deduction. So just ignore the rates if not current as these can be verified with the new contribution tables, rates, etc.
While the SSS or even the DOLE has not issued the supporting laws and rules on this matter, below are the sources found that may support the idea:
Full pay shall consist of: (Rule III, Sec. 2, 2, b, IRR)
- Maternity benefit computed based on the average daily salary credit and
- Salary differential to be paid by the employer
Full pay means actual remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours not lower than the wage rate fixed by the RTWPB including allowances provided for under existing company policy or collective bargaining agreement, if any. (Rule II, Sec. 1, j, IRR; Sec. 3, Rule VI, IRR; See also Sec. 5, R.A. 11210)
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Beginning on the last day of the calendar month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee’s monthly salary, wage, compensation or earnings the employee’s contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the monthly salary credits xxx (Sec. 18, R.A. 11199)
Compensation refers to all actual remuneration for employment, including the mandated cost-of-living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary credit as provided in the act. (Sec. 8, f, R.A. 11199)
Thus, full pay is remuneration which falls within the definition of compensation. Being such, the employer is mandated to deduct and withhold from the employee’s compensation the employee’s contribution to the SSS.
As to PhilHealth:
SEC. 7. Enrollment. – The Program shall enroll beneficiaries in order for them to be placed under coverage that entitles them to avail of benefits with the assistance of the financial arrangements provided by the Program. The process of enrollment shall include the identification of beneficiaries, issuance of appropriate documentation specifying eligibility to benefits, and indicating how membership was obtained or is being maintained. The enrollment shall proceed in accordance with these specific policies: (a) all persons currently eligible for benefits under Medicare Program I, including SSS and GSIS members, retirees, pensioners and their dependents, shall immediately and automatically be made members of the National Health Insurance Program; (Art. VII, R.A. 7875, as amended)
SEC. 28. Contributions. – All members of the Program shall contribute to the Fund, in accordance with a reasonable, equitable and progressive contribution schedule to be determined by the Corporation on the basis of applicable actuarial studies and in accordance with the following guidelines: (a) Formal sector employees and current medicare members and their employers shall continue paying the same monthly contributions as provided for by law until such time that the Corporation shall have determined the contribution schedule mentioned herein: Provided, That their monthly contribution shall not exceed three percent (3%) of their respective monthly salaries xxx (Sec. 28, Art. VII, R.A. 7875, as amended)
On Pag-Ibig:
SEC. 6. Fund Coverage. – Coverage in the Fund shall be mandatory upon: (a) all employees covered by the SSS and the GSIS, and their respective employers, notwithstanding any waiver of coverage previously issued, including the uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail Management and Penology, and the Philippine National Police; (h) Filipinos employed by foreignbased employers; and (c) spouses who devote full-time to managing the household and family affairs, unless they also engage in another vocation or employment which is subject to mandatory coverage, may be covered by the Fund on a voluntary basis adopting as a basis of contributions one-half (1/2) of the monthly compensation income of the employed spouse. (R.A. 9679)
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Covered employees and employers shall contribute to the Fund based on the monthly compensation of covered employees as follows: Employees earning not more than One thousand five hundred pesos (P1,500.00)per month – one percent (1%). Employees earning more than One thousand five hundred pesos (P1,500.00) per month – two percent (2%). All employers – two percent (2%) of the monthly compensation of all covered employees. The maximum monthly compensation to he used in computing employee and employer contributions shall not he more than Five thousand pesos (P5,000.00): Provided, That this maximum may be fixed from time to time by the Board of Trustees through rules and regulations adopted by it, taking into consideration actuarial calculations and rates of benefits.
Thus, SSS, PhilHealth and Pag-Ibig require contribution for earnings on account of compensation. Full pay in the context of Expanded Maternity Leave Law is compensation where contribution is required and where employer is mandated to deduct, withhold and remit.
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