Prerequisite

Dear Atty. Angela,

I am an owner of a small production studio where I hire producers, editors, and other production staff. One day, representatives from the Social Security System (SSS) conducted a routine field inspection in our studio. During the visit, the inspectors saw that there were six individuals in our studio and already concluded that they were regular employees when most of them are just freelancers. I was criminally charged with violating Section 28(e) of the Social Security Law for purportedly failing to register my employees. Can this criminal case proceed against me?

Aries

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Dear Aries,

Under Section 28(e) in relation to Sections 9, 10 and 24(A) of the Social Security Law, any person or employer who “fails or refuses” to register employees with the SSS will face criminal liability.

In the case recent case of Gabrillo v People, GR No. 275194 (7 July 2026), the Supreme Court made an express ruling where it stated, “[t]he Court now clarifies that the service of a prior demand to comply with the registration requirement is a necessary prerequisite before a criminal action may be instituted for violation of Section 28(e) of the SSS Law.”

“Since the law penalizes failure ‘or refusal,’ and ‘one cannot be said to have refused an obligation that has not first been demanded,’ the Coverage Letter with Demand ‘must specify a reasonable period within which to comply. Criminal liability shall attach only if the employer fails or refuses to comply within the period stated in the demand, reckoned from receipt thereof.”

In other words, the Court made explicit that for employers who have failed to register their employees under SSS, said employers would not be automatically be criminally liable unless there was no prior demand for them to comply with SSS registration requirement. This prerequisite of prior demand is now mandatory.

The SSS inspectors cannot merely rely on casual observation to immediately determine that the individuals in your studio were employees. As you stated, there were freelancers or even possibly project employees or interns who were in the premises at the time. Thus, without proof of the employees’ nature of employment, and prior demand as now required, there cannot be immediate presumption of SSS compulsory coverage.

Atty. Angela Antonio