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Date Filed: 26 September 2018
Pursuant to the approval of the Senior Management Committee in its meeting held last September 3, 2018, the Revised Guidelines on Penalty Condonation for Employers Who Deducted Monthly Savings (MS) But Failed to Remit are hereby issued:

I.    OBJECTIVES

This program aims to achieve the following objectives:

1.   To ensure registration of unregistered employers with the Fund; and

2.   To compel employers to settle their provident obligations.

II.    COVERAGE

This Guidelines shall apply to the following:

1. All unregistered and delinquent registered employers who deducted monthly savings (MS) from their employees but failed to remit the same to the Fund.

2.   All  employers  who  have  pending  applications  for  plan  of  payment
resulting from enforcement efforts of the Fund who were not qualified to apply under Circular 387.

III.  PAYMENT OF PROVIDENT OBLIGATION

The Employer shall pay the following provident obligations:

1.1 Total  unremitted  monthly  mandatory  savings.  This  shall  include  the employer counterpart and employee contribution.
1.2 Deprived dividends; and
1.3 Total  assessed  penalties  (TAP).  The  TAP  shall  be  the  penalties
computed as of date of filing of application.

Imposition of penalties shall be suspended from the date of filing of application, provided that the employer should pay and remit the required  contributions  (EE  +  ER)  of  current  employees  for  the current remittance period and every month thereafter.

2.    The employer shall be granted specific discount on the TAP based on the following payments options:

2.1 Full Payment

A  70%  discount  on  TAP  shall  be  given  to  the  employers  for  full settlement of the total unremitted monthly mandatory savings, deprived dividends and the remaining 30% of the TAP. Full payment shall be made within thirty (30) calendar days from the date of approval of the discount. Otherwise, said approval shall be forfeited.

Employers who signified their intent to pay in full but later on opted for a plan of payment shall be granted discount based on Item III.2.2 hereof provided they shall submit their plans of payment not later than the 25th day from the date of approval of application for penalty condonation. Otherwise, said approval shall be forfeited.

2.2 Plan of Payment.

2.2.1  Employers who adopted for  plan of  payment  shall  be granted discount on TAP based on the following settlement term:

Se ttl ement Term	Pena lty Di scount on TAP
1 year or l e s s	60%
Mor e t han 1 year to 2 years	50%
Mor e t han 2 years to 3 y ears	40%
Mor e t han 3 years to 4 years	30%
Mor e t han 4 years to 5 years	20%

2.2.2  The total unpaid balance shall be charged an interest of 0.50% per month until full settlement thereof.

2.2.3  Should the employer fail to pay any of the installment due under the approved plan of payment, all other penalties shall be re- imposed. Further, appropriate civil and/or criminal actions shall be filed against the delinquent employer.

2.2.4  Payment  shall  start  exactly  one  month  after  the  date  of  the approval of application for penalty condonation, which shall be the due date under the plan of payment.

2.2.5  The employer shall issue the corresponding number of post-dated checks (PDCs) to cover the approved plan of payment.

IV.  PERIOD OF AVAILMENT

1.   Eligible employers may avail of this program within one year from the effectivity of this Guidelines.

2.   Only  applications  with  complete  documents  shall  be  accepted  and processed.

V.   MECHANISM ON RESOLUTION OF ISSUES

Any issue in the interpretation and implementation of this Guidelines shall, as much as possible, be resolved by the concerned officer. Matters that are not thereby satisfactory resolved shall be escalated to the next higher approving authority.

VI.  EFFECTIVITY

This Circular takes effect after fifteen (15) days following the completion of its publication in the Official Gazette or in a newspaper of general circulation.