Phase
Act on Social Insurance No. 461/2003; Act on Bankruptcy and Restructuring No. 7/2005, as amended; Act on Labour Code No. 311/2001
Native name
Zákon o sociálnom poistení č. 461/2003; Zákon o konkurze a reštrukturalizácii č. 7/2005, v znení neskorších predpisov; Zákonník práce č. 311/2001
Type
Wage guarantee in case of insolvency
Added to database
08 May 2015

Article

2 d), 4 (4), 7, 12, 18, 25, 102, 103, 109, 116,120, 165 (461/2003); 11, 24, 56 (7/2005); 21 (311/2001)


Description

In cases of employer's insolvency, workers’ wage claims are guaranteed through the Act on Social Insurance and the Act on Bankruptcy and Restructuring.

All workers with an employment relationship that lasted at least 18 months before the insolvency (the last working day before the employer filed for insolvency) are eligible, including employees with fixed-term contracts, part-time workers and employees working externally according to assignment contracts. However, employees of the state, public organisations, support organisations, national funds and municipalities, as well as domestic workers in a family business or people working for their family relatives who have not entered into an employment relationship are not eligible.

An employer is considered insolvent if it has filed for insolvency at the court.

The guarantee covers non-paid wages, bonuses, holiday remuneration, severance payments and travel expenses. The benefit covers employees wage claims for a maximum duration of three months. In 2019, the average payment for an employee was €2,173, but in 2022, this payment has increased to the amount of €2,608. As of October 31, 2023, the Social Insurance Agency paid benefits for 1438 beneficiaries in the first 10 months of 2023 in the total amount of €3,292,687. On average, one benefit costs €2,290.

To get access to the wage guarantee benefits, the employee has to apply within 60 days after the insolvency or termination of the employment relationship. The Social insurance Agency (SP), which administers the guarantee fund, has to decide and pay the benefit within 60 days from the application. The fund is financed by employers' contributions.

In context of the COVID-19 pandemic, the government meet employers and the self-employed by postponing the deadlines for mandatory payments to insurance funds.


Commentary

The Social Insurance Agency paid 1,446 wage compensations from the Guarantee fund in the toal expenditure €2.29 million to employees of 78 insolvent companies in 2017. In 2018, it paid more compensations, 1,702 in the total amount of €2.58 million, but the number of concerned insolvernt companies was 63. In 2022, Social Insurance Agency paid 713 wage compensations from the Guarantee Fund to employees with a total expenditure of €1.86 million.


Additional metadata

Cost covered by
Employer
Involved actors other than national government
Other
Involvement (others)
Social insurance organisation; Guarantee Fund
Thresholds
Affected employees: No, applicable in all circumstances
Company size: No, applicable in all circumstances
Additional information: No, applicable in all circumstances

Sources

Citation

Eurofound (2015), Slovakia: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/slovakia

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