Employees can apply to the Employees’ Guarantee Fund (Lønmodtagernes Garantifond, LG) for wage and holiday compensation, indemnification for interruption of the employment relationship and compensation in connection with discharge from employment.

The claims have to arise in the period of four months after bankruptcy or six months after notice of suspension of payments or the death of the employer.

LG is an independent national institution governed by the social partners and regulated by law. All private employers pay a quarterly contributions based on company size to the fund.

Support is provided in case of bankruptcy, the employer’s death where the court declares the company is insolvent, the termination of the business while it is proven that the employer is unable to pay the employees’ claims or during the employer’s court-supervised suspension of payments according to the provisions of the bankruptcy law.

All employees are eligible, including part-time and fixed-term workers, except for family members and close associates of the insolvent employer.

There is no minimum duration for the employment relationship in order for workers to qualify for the guarantee. An employee's claim is usually paid 4 weeks after the fund has received the application from the employee.

The maximum compensation from the fund is DKK 160,000 (€ 21,300).