In the case of employer insolvency, wages and other claims of employees resulting from the employment contract are secured by the national pay security system, which is financed by the employers' contribution to unemployment insurance.

An employer is considered insolvent if the employer is unreachable or has terminated the business activity, and it can be proven that the amount in question cannot be paid from the assets; or if the employer has been declared bankrupt or else been established to be unable to pay its debts.

The guarantee covers all claims that have become due within three months before applying for the guarantee, irrespective of the duration of the employment or the type of contract. The maximum amount to be paid per employee and employment contract with the same employer is €15,200.

The pay security system is administered by the regional Centres for Economic Development, Transport and the Environment (ELY Centres). The Centres make decisions in pay security matters and handle other functions connected with enforcement of the Act. A guarantee application may also be handed in at a local job centre.