An employer goes bankrupt or becomes insolvent: what belongs to the employee

Guarantees in the event of an employer bankruptcy belong to employees whose employers have been declared bankrupt or are in liquidation due to their insolvency. The same applies to employees when their employer’s company is registered in a state of the European Union or in another state of the European Economic Area and which has led to insolvency proceedings.

Guarantee Fund Funds – for employees of bankrupt or insolvent companies

Guarantee Fund funds are awarded only when the employer becomes insolvent and does not have sufficient own funds to settle with the employees.

An employee can claim benefits from the Guarantee Fund if he started working for the company before the court decided to initiate bankruptcy proceedings or if creditors began to conduct out-of-court bankruptcy proceedings. In this case, it is irrelevant whether the employment relationship continues or whether the employment contract expires after the court decision.

Guarantee Fund benefits are not available to employees who were employed after the initiation of bankruptcy proceedings.

AMOUNT OF GUARANTEE FUND PAYMENT

In the event of bankruptcy or insolvency of the employer, the employee is paid an estimated amount of employment-related income that does not exceed EUR 3,852 (6 MMA).

PROCEDURE TO GRANT BENEFITS

The benefit is granted when the designated bankruptcy administrator submits an application to Sodra. Indicates the amount that the bankrupt (bankrupt) employer owes the employee.

No benefit is awarded if:

• the debt with the employee has not been approved by court order or decision of the creditors’ meeting;
• the authorities of other Member States have granted such a benefit to employees;
• the employee has not been accredited with the employment relationship during the 3 months prior to the court order
• related income.

Employee steps if bankruptcy proceedings have been filed against the employer:

• the employee must submit a written request to the designated insolvency administrator and submit a creditor claim in writing;
• submit a request to Sodra for payment of a benefit from the Guarantee Fund, if you have not submitted an indefinite request for sickness benefit or in the last 12 months. you have not received any social security benefits prior to the date of the bankruptcy proceedings against the employer.

Steps of the employee if the company is declared insolvent and the employer does not pay:
The employee must submit a request to Sodra for the payment of the Guarantee Fund benefit, if they have not submitted an indefinite request for sickness benefit or in the last 12 months. you have not received any social security benefits prior to the date of the bankruptcy proceedings against the employer.

IMPORTANT. In the event of the bankruptcy of your employer, you will find the designated bankruptcy administrator on the website of the Audit, Accounting, Asset Valuation and Bankruptcy Management Service: www.anvt.lt.

What are the additional benefits for laid off workers?

SOCIAL SECURITY BENEFIT FOR UNEMPLOYMENT. If you have been laid off, we recommend that you contact the Employment Service. Here you will be able to search for a new job, receive offers to participate in trainings, as well as apply for a social security unemployment benefit, which is awarded and paid for by Sodra. An application for social security unemployment benefit can also be submitted to Sodra’s personal account.

This benefit is granted to people who have had at least 12 months of unemployment insurance in the last 30 months before registering with the Employment Service. Social security unemployment benefit is paid for 9 months.

By registering for the Employment Service, you are covered by mandatory health insurance and do not have to pay monthly contributions on your own. If a person who has lost his job does not register with the Employment Service, he will have to pay health insurance contributions independently from the following month.

JOB SEARCH ASSIGNMENT. People registered with the Employment Service and who have the status of unemployed who do not participate in the active policy measures of the labor market and who have lost their job within 3 months can apply for the job search benefit. until declaration of emergency or quarantine.

The job search benefit will not be available to people who are entitled to the social security benefit for unemployment or when the term for its payment has expired at the time of the request of the person to the Employment Service.
If the emergency or quarantine is canceled, the work search allowance will be paid for another month. The benefit for job search in 2021 will reach 212 euros.