Factsheet for measure
EE-2002-1/2605
– measures in Estonia
Benefits in case of employer insolvency
Hüvitis tööandja maksejõuetuse korral
Background information
In order to ensure that employees can cope financially in case of the employer's insolvency, the Estonian Unemployment Insurance Fund pays insolvency benefits to the employees. Insolvency is understood as either the bankruptcy of the employer or the abatement of bankruptcy proceedings (if the assets cannot meet the costs of liquidation). The terms and conditions of the benefit are based on the Unemployment Insurance Act (chapter 4).
Other cases related to the Estonian Unemployment Insurance Fund (EUIF) are:
Content of measure
The benefits include:
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Pending salary from the period before the declaration of the employer as insolvent.
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Pending holiday pay from the period before the declaration of the employer as insolvent.
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Benefits from the period before or after the declaration of the employer as insolvent which were not received at the time of cancellation of the employment contract.
In case of unpaid wages, the amount to be paid covers up to the employee's gross wages for the last three months of work, but not exceeding the amount equal to three average gross monthly wages in Estonia during the quarter preceding the declaration of the employer as insolvent (data published by the Statistical Office is the reference point).
In case of unpaid holiday pay, the maximum paid amount is one gross monthly wage of the employee, but not exceeding the amount equal to one average gross monthly wage in Estonia during the quarter preceding the declaration of the employer as insolvent (according to the data published by the Statistical Office).
In case of benefits not received, the maximum paid amount is equal to the employee's two gross monthly wages but not exceeding the amount equal to one average gross monthly wage in Estonia during the quarter preceding the declaration of the employer as insolvent (according to the data published by the Statistical Office).
The benefit is financed from the national fund, i.e., from the unemployment insurance premiums paid by employers and employees which are gathered into a national fund administrated and used by the Unemployment Insurance Fund.
Use of measure
According to data provided by the Estonian Unemployment Insurance Fund, the number of people entitled to benefit upon insolvency of the employer was significantly higher during the Great Recession in 2008-2010, when it served its purpose well. The COVID-19 pandemic also increased the number of cases.
Data for recent years:
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2018: Number of people entitled to benefit - 1,090; average benefit - €2,772
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2019: Number of people entitled to benefit - 1,200; average benefit - €3,092
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2020: Number of people entitled to benefit - 2,424; average benefit - €3,367
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2021: Number of people entitled to benefit - 1,235; average benefit - €2,919
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2022: Number of people entitled to benefit - 1,154; average benefit - €3,283
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2023: Number of people entitled to benefit - 1,202; average benefit - €4,597
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2024: number of people entitled to benefit - 1,047; average benefit - €4,522
Manufacturing, accommodation and catering, construction, and transportation and storage have been the sectors where the number of people receiving the compensation has been the highest during recent years.
Source of data:
Estonian Unemployment Insurance Fund statistics
Target groups
Actors and funding
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Actors
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Funding
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National government
Public employment service
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Unknown
Views and reactions
Unknown
Sources
