Text of the provision
Art. 196. Delinquent contributions. An employer who is delinquent in his contributions shall be liable to the System for the benefits which may have been paid by the System to his employees or their dependents, and any benefit and expenses to which such employer is liable shall constitute a lien on all his property, real or personal, which is hereby declared to be preferred to any credit, except taxes. The payment by the employer of the lump sum equivalent of such liability shall absolve him from the payment of the delinquent contribution and penalty thereon with respect to the employee concerned. Failure or refusal of the employer to pay or remit the contribution herein prescribed shall not prejudice the right of the employee or his dependents to the benefits under this Title. If the sickness, injury, disability or death occurs before the System receives any report of the name of his employee, the employer shall be liable to the System for the lump sum equivalent to the benefits to which such employee or his dependents may be entitled.
Labor Code of the Philippines, Presidential Decree No. 442, as amended. Reproduced in full from the official enactment and verified against the LawPhil and ChanRobles renderings.
What this article means
An employer behind on contributions must reimburse the System for benefits it paid to his employees or their dependents, and that liability becomes a lien on all his property, preferred over every credit except taxes. Paying the lump sum equivalent wipes out the delinquent contribution and its penalty for that employee, and the worker’s right to benefits is never prejudiced by the employer’s failure to pay or to report the employee’s name.
Questions about this provision
Related provisions
- Article 195 — Relationship And Dependency.
- Article 197 — Second Injuries.
A note on article numbers. The articles of the Labor Code have been administratively renumbered, so the same provision is often cited under a different number. Supreme Court decisions write both, in the form “Article 297 [282]” — the new number first, the original in brackets. The text on this page is published under its original number, which is the numbering both source texts use. When citing, check which numbering your source follows.
Cases interpreting this article
- Authorities on this article will be added here as each is verified against primary sources.