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If you receive no wages or holiday pay because your employer is unable to pay you, you can apply to force your employer into bankruptcy. Once bankruptcy proceedings are opened, you can apply to have your wages and other expenses covered by the "statlige lønnsgarantiordningen" (national wage guarantee scheme) This page explains what the scheme concerns and how to apply for bankruptcy.

Who is covered by the scheme?

Lønnsgarantiordningen (the national wage guarantee scheme) applies to employees who have not received their pay or holiday pay from their employer due to the employer becoming bankrupt. The scheme also applies to employees in banks and insurance companies placed under public administration. It also applies to the employees of companies put into forced bankruptcy, according to the provisions of the Limited Liability Companies Act.

The scheme means that your wages and holiday pay are covered for an amount up to twice the National Insurance basic amount (2 G). If your employer goes bankrupt or one of the other situations occurs, you should contact the receiver. He or she can inform you of the rules and how to apply to the scheme.

Deadlines

There are deadlines applicable to claims for wages and holiday pay concerning how old a claim can be for it to be covered. By acting passively and waiting for a colleague to apply to force your employer into bankruptcy, you risk your claim being too old to be covered. It may therefore be necessary to apply for forced bankruptcy yourself. Reasonable costs you incur from applying for forced bankruptcy such as fees, legal fees and the like can be covered by the guarantee.

Exemptions from requirement for security

Employees applying to force their employer into bankruptcy because of failure to pay wages or holiday pay are exempted from the requirement to provide security of NOK 43,000 for the costs of bankruptcy proceedings. In such cases, the public authorities pay all costs not covered by the assets of the bankruptcy estate. 

How to proceed

The easiest and quickest way to open bankruptcy proceedings is for you and your employer to contact the District Court, and for your employer to acknowledge insolvency (non-ability to pay). If your employer will not concur, you can proceed as follows:

1. When you have not been paid: Claim for payment

If you have not received your wages on the usual pay day, send a recommended letter (claim for payment) as soon as possible to your employer. The letter should state what the claim concerns, the amount the employer owes you and the period in which it was earned. Give your employer a week to pay.

Example of a claim for payment (pdf from Oslo County Court, only in norwegian)

2. When an employer fails to pay on demand: Warning of bankruptcy proceedings

Four weeks after sending the recommended letter, write payment reminder (warning of bankruptcy proceedings). This should be served on your employer by a public official, see below.

Notice of bankruptcy proceedings:

    • Refer to the claim for payment you sent previously. Restate the amount your employer owes you, what the claim concerns and the period in which it was earned.

    • Give your employer two weeks from the date notice was served (see below) to pay.

    • Write that “an application for bankruptcy proceedings will be made if payment is not made before the deadline stated.”

You should also write: “Please note that upon commencement of bankruptcy proceedings, insolvency will generally be deemed to apply and bankruptcy proceedings can be opened when payment has not been made after notification of bankruptcy proceedings has been served in accordance with section 63 of the Bankruptcy Act (link to lovdata.no)".

It is important that all the above are included in notification of bankruptcy proceedings to be able to open the proceedings later.

Service:

Send notification of bankruptcy proceedings in four copies to the Chief Process Server at the local authority where your employer is registered. The Chief Process Server will serve the notice on your employer. Serving notice costs NOK 430 and you will be notified when it has been done. The Chief Process Server is either the bailiff or sheriff in your district. Check with the police.

Example of notice of bankruptcy proceedings (pdf from Oslo County Court, only in norwegian).

3. If your employer still fails to pay: Bankruptcy petition

Once the two week deadline in the notice of bankruptcy proceedings has expired, you can submit a bankruptcy petition to the court. Your application must be in at least five copies with attachments, and must be received by the court within two weeks of expiry of notice in the notice of bankruptcy proceedings. If not, notice will have to be reissued.

Example of bankruptcy petition (pdf from Oslo County Court, only in norwegian).

Comply with the deadlines and requirements for the procedure

Even if your claims according to the main rule are too old to be covered by the guarantee scheme, they can still be covered if you have started and proceeded with the case according to the recommendations above. To protect your entitlement to wage guarantee cover, it is important to act quickly. Given that the debt recovery process can be complicated and that there are strict formal requirements for how you proceed with opening bankruptcy proceedings, it can be a good idea to use a lawyer. The cost of doing so can be covered by the guarantee.

More information on "lønnsgarantiordningen" (the national wage guarantee scheme )

The Norwegian Advisory Council on Bankruptcy’s website (link) Legal provisions (section 9-3 ) on wage claims in the Bankruptcy Cover Act (lovdata.no)

The page was updated: 27.09.2016, kl. 10:08