Guidelines on Penalty Condonation for Employers

Applies to unregistered and delinquent registered employers who have deducted monthly savings from employees but failed to remit them.
Includes employers with pending payment plan applications resulting from Fund enforcement actions who were disqualified under a previous circular (Circular 387).

Employers must pay total unremitted monthly mandatory savings including both employer and employee contributions.
Employers must pay deprived dividends computed up to the payment date.
Employers must pay total assessed penalties (TAP) computed likewise as of the payment date.

Full Payment Option:
- 70% discount on TAP granted for full settlement of all obligations (unremitted savings, deprived dividends, and 30% of TAP).
- Full payment must be made within 30 calendar days from discount approval or approval is forfeited.
- Employers who initially opt for full payment but shift to a payment plan must submit the plan within 25 days to retain eligibility.
Plan of Payment Option:
- Discounts on TAP vary by settlement term:
  - 1 year or less: 60% discount
  - More than 1 to 2 years: 50% discount
  - More than 2 to 3 years: 40% discount
  - More than 3 to 4 years: 30% discount
  - More than 4 to 5 years: 20% discount
- 0.50% monthly interest on outstanding balance until full payment.
- Failure to pay any installment results in re-imposition of all penalties and possible civil/criminal prosecution.
- Payment schedule starts exactly one month after approval date.
- Employers must issue post-dated checks covering the payment plan installments.

Issues in interpretation or implementation should be resolved by the concerned officer.
Unresolved issues should be escalated to the next higher approval authority.

The circular takes effect 15 days following publication in the Official Gazette or a newspaper of general circulation.