Small Business Wage Subsidy (SBWS) Program

Updated as of 24 April 2020

After the Department of Labor and Employment suspended accepting further applications under CAMP, the Department of Finance announced that it will provide a wage subsidy for eligible employees of small businesses affected by the enhanced community quarantine (ECQ).

Under the Small Business Wage Subsidy (SBWS) program, the government, through the Social Security System (SSS), shall provide a wage subsidy of between 5,000 to 8,000 pesos (based on the regional minimum wage) per month per eligible employee for up to two months.

The SSS will only be accepting applications completed by the employer on behalf of their employees from 16 April 2020 to 08 May 2020. [Note: Extended from 30 April 2020 per DOF Advisory dated 24 April 2020.]

Criteria, Eligibility & Conditions

Only small business establishments that meet the criteria below will be eligible under the SBWS:

1. Size of Business: The small business — whether a corporation, partnership, or sole proprietorship — must not be in the BIR’s Large Taxpayer Service (LTS) list; and

2. Impact of the ECQ: Small businesses under both Category A (non-essentials) that are forced to stop operations (i.e., temporary closure or suspension of work) and Category B (quasi-essentials) that are allowed to operate a skeleton force can apply for the wage subsidy for employees who are not able to work and did not get paid during the ECQ. [List of categories is available at the link below.]

Note that the SSS will prioritize applications of small business establishments that are:

1. BIR-registered and complying with tax obligations during the past three years, up to January 2020.

2. SSS-registered and have paid SSS contributions for the past three years up to January 2020 (the last recorded contribution).

SBWS guidelines further provide the following eligibility criteria for employees:

Who are eligible?

Who are not eligible?

An employee who fulfills all of the following criteria is eligible:

  • Must be an employee of an eligible small business
  • Must be employed and active as of March 1, 2020 but unable to work due to the ECQ
  • Did not get paid by their employer for at least two weeks during the temporary closure or suspension of work in accordance with Labor Advisory No. 1, Series of 2020
  • Can be of any contract status (e.g., regular, probationary, regular seasonal, project-based, fixed-term)
  • Must be certified by the employer in the application as having met all the above criteria

The following employees are not eligible:

  • Working from home or part of the skeleton force
  • On leave for the entire duration of the ECQ, whether with or without pay
  • Already a recipient of SSS unemployment benefits, to avoid duplication
  • Those who have settled or in-process SSS final claims (funeral, retirement, death, and total disability)

Employees who have received a subsidy from the Department of Labor and Employment’s CAMP shall be eligible for only the first month of the SBWS to avoid duplication.

To qualify, the following conditions must also be fulfilled:

1. Small businesses must maintain the employment status of all eligible employee beneficiaries before the ECQ and throughout the SBWS period. This will be checked during the monitoring and evaluation stage. Non-compliance with this condition shall result in the employer refunding to the government the wage subsidy amount.

2. Employees cannot resign during the ECQ period.

Modes of Payment

The wage subsidy are paid thru any of the following modes:

  1. Withdrawal via employee’s SSS UMID cards enrolled as ATM
  2. Withdrawal from employee’s bank account for PESOnet participating banks
  3. Employee’s Union Bank Quick Card (partnership with SSS)
  4. Employee’s E-wallet: PayMaya
  5. Cash pick-up arrangement through remittance transfer companies

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Disclaimer: The information in this website is provided for general informational purposes only. No information contained in this post should be construed as legal advice from Platon Martinez or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances.