The Diwata Case and SSS Compliance: A Practical Legal Guide for Employers

The recent arrest of small business owner and food vlogger Deo “Diwata” Balbuena has sparked widespread discussion about government enforcement and business compliance. While the case is not purely an SSS case, it serves as a powerful reminder that non-compliance with mandatory government obligations—especially SSS—can quickly escalate into legal action, even for micro and small enterprises.

This article aims to guide employers on SSS compliance, explain what to do at every stage of enforcement, and outline available legal remedies to prevent situations that may lead to criminal charges or arrest.

Why SSS Compliance Is Mandatory Under the Law

SSS compliance is not optional or discretionary. It is a legal obligation imposed by Republic Act No. 11199, also known as the Social Security Act of 2018.

Under the law, all private employers, regardless of business size, are required to register with the SSS and enroll all their employees.

Employers are required to:

• Register the business with SSS

• Report all employees within 30 days from hiring

• Deduct the employee’s share of contributions

• Add the employer’s share

• Remit the total contribution on or before the prescribed deadline

Failure to comply with any of these obligations exposes the employer to administrative, civil, and criminal liability.

Legal basis: Republic Act No. 11199, Sections 9, 18, and 22

What the Diwata Case Teaches Employers

The Diwata case illustrates how compliance issues can escalate when left unaddressed. Although the case involved broader business compliance concerns, it highlights a key reality:

Government agencies are actively enforcing the law, and small businesses are not exempt.

Many employers mistakenly believe that informal operations or small-scale businesses will be overlooked. The Diwata case shows that this assumption is risky. Once a complaint is filed and violations remain unresolved, enforcement may proceed through the courts.

Key takeaway for employers:

Early compliance and proper response to notices matter.

What Happens When an Employer Violates SSS Rules

1. Receiving an SSS Notice of Violation or Show Cause Order

An SSS Notice of Violation is usually the first formal step in enforcement. This notice means that SSS has identified missing, late, or unremitted contributions based on inspections or record checks.

At this stage, employers are given the opportunity to explain or correct the violation. Ignoring this notice is one of the most common mistakes that leads to escalation.

What employers should do immediately:

• Review payroll and contribution records

• Verify the assessment with SSS

• Coordinate with the nearest SSS branch

• Begin settlement or correction of records

Responding promptly demonstrates good faith, which is critical in preventing further legal action.

Legal basis: RA 11199, Section 22; SSS RACE Program Guidelines

2. Receiving a Subpoena or Summons

If the violation is not corrected, SSS may file a complaint with the Department of Justice (DOJ). A subpoena or summons indicates that the case has reached the preliminary investigation stage.

This is already a serious legal matter. At this point, the employer is required to submit a counter-affidavit and supporting documents.

Employers should:

• Immediately seek legal counsel

• Submit a timely counter-affidavit

• Present proof of payment, partial settlement, or intent to comply

• Coordinate with SSS regarding possible settlement

Many cases can still be resolved at this stage if the employer acts responsibly and cooperates.

Legal basis: Rules of Criminal Procedure; RA 11199, Section 28

3. Receiving a Warrant of Arrest

A warrant of arrest is issued only by a court after finding probable cause. SSS does not issue warrants.

Warrants typically result from:

• Unresolved cases

• Failure to respond to subpoenas

• Continued non-compliance

If a warrant exists, employers should not panic or evade authorities.

Proper course of action:

• Coordinate immediately with a lawyer

• Arrange for voluntary surrender

• Apply for bail

• Continue settlement discussions with SSS

Voluntary compliance and settlement may still be considered by the court.

Legal basis: 1987 Constitution (Due Process); Rules of Court; RA 11199, Section 28

Criminal Liability Under the SSS Law

Under the Social Security Act of 2018, employers who fail to remit SSS contributions may face:

• Imprisonment ranging from 6 years and 1 day to 12 years

• Fines ranging from ₱5,000 to ₱20,000

• Payment of all unpaid contributions and penalties

Corporate officers, managers, or owners may be held personally liable, especially if they are responsible for payroll and remittance decisions.

Legal basis: RA 11199, Section 28

Legal Remedies Available to Employers

Settlement and Payment Before Final Judgment

Employers are allowed to settle outstanding obligations before a case reaches final judgment. Early settlement can significantly reduce legal exposure and may prevent further prosecution.

Contribution Condonation and Restructuring Programs

From time to time, SSS offers penalty condonation or installment payment programs. These are usually available to employers who demonstrate willingness to comply and settle their obligations.

Seeking Legal Counsel Early

Engaging a lawyer at the first sign of an issue helps ensure:

• Proper observance of due process

• Correct and timely filings

• Effective negotiation with SSS

• Avoidance of arrest or prolonged litigation

Legal basis: RA 11199; SSS Collection and Settlement Rules

How Employers Can Prevent SSS Compliance Issues

Employers can avoid most problems by:

• Conducting regular payroll and SSS audits

• Monitoring contribution payments monthly

• Keeping accurate employment and remittance records

• Responding immediately to SSS notices

• Seeking professional advice when unsure

Prevention is always less costly than litigation.

Final Thoughts: Compliance Is Protection

The Diwata case reminds employers that SSS compliance is actively enforced, and failure to comply—whether intentional or due to lack of awareness—can lead to serious legal consequences.

Understanding your obligations, responding properly to notices, and using available remedies are not just legal strategies. They are essential steps in protecting your business, your employees, and yourself.