Background information

In case of an employer's insolvency, the measure according to act no. 118/2000 Coll., Protection of employees in the event of insolvency of their employer can guarantee the living standard of employees. The employee can to submit the application for claims to the labour office.

All employees are eligible for the subsidy, including part-time workers and fixed-term workers. Other employees are also excluded from protection, namely employees who are members of the employer’s statutory body and shareholders with half and higher participation. Then employees who work for the employer as temporary agency workers (TAW) and whose wages are covered by a TAW insurance in case of insolvency.

Content of measure

The employee has to apply within 5 months and 15 calendar days following the date on which the labour office published its official board information to the court regarding the employer who has filed an insolvency petition or has impounded property. All claims (wage, payment for holidays, termination of a job, payment for time off to visit a doctor) that arose in the period of three months before and three months after the month when the insolvency was announced are covered. Wage claims are covered for a maximum period of three months, for a monthly amount of one and a half average wage in Czechia as prescribed by law. The guarantee is financed by the state and paid by the labour office; there are no employers’ contributions.

Use of measure

The number of employers, number of submitted employees' applications and paid wage guarantee followed the economic cycle in the country, as it can be observed. In 2020, the following data according labour office were recorded:

• Number of employers, whose employees are qualified for the wage guarantee in insolvency (-)
• Submitted employees´applications (-)
• Processed applications (3,737)
• Wage guarantee paid to employees in total (thousands CZK) (273,895)
• Wage guarantee paid to emplyoees in total (thousands EUR) (10,67)

Target groups

Workers	Businesses	Citizens
Applies to all workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public employment service	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

No involvement.

Views and reactions

No view.

Sources

• 31 October 2022: Act No. 118/2000 Coll., Protection of employees in the event of insolvency of their employer (www.ilo.org)
• 31 October 2022: Act No. 182/2006 Coll., Insolvency act (www.ilo.org)
• 31 October 2022: Analysis of development of employment and unemployment, MPSV (www.mpsv.cz)
• 31 October 2022: Labour office of Czechia (Úřad práce ČR) (www.uradprace.cz)