Payment in the event of bankruptcy, cessations of operations and restructuring

If your employer goes bankrupt, ceases operations, dies or is undergoing reconstruction, you as an employee can apply to the Employees' Guarantee Fund (LG) to have your outstanding pay, pension, holiday pay, etc. paid out.

Report a claim

Read more and self-services

You can report to LG if you are owed pay, etc. You can only report unpaid pay, etc. if your employer is in one of these four situations:

  • The employer has been declared bankrupt.
  • The employer has ceased operations and is insolvent.
  • The owner of the company has died and the company is insolvent.
  • The employer is undergoing restructuring, and you no longer work for the employer.

Deadline for reporting

It is important that you meet the notification deadline. If you report late, you will not be able to receive payment for your claims from LG. The deadline for reporting depends on your employer's situation. 

Get off to a good start

To receive money from LG, you must meet six general conditions. There may be other factors that could affect whether you are eligible for a payment. This is because LG always makes a specific assessment of your case.

1. The employer is in the right situation

Your employer must either be declared bankrupt, have ceased operations and be insolvent, the owner must be deceased and insolvent, or the company must be in restructuring. If you are still working for your employer during the restructuring process, you cannot be paid by LG.  

2. You were employed as a salaried employee

This means that you are employed and receive pay for the work that you have personally performed for your employer. This means that your employer decides how you should perform your work. You may, for example, be employed as a salaried employee, under salaried employee-like conditions or as a worker.

You cannot receive money from LG if, for example, you are a CEO, a manager with authority or self-employed.

3. You have been dismissed

You have resigned or been dismissed.

If you have a notice period, you must provide evidence that you no longer work for your employer. It may therefore be a good idea to first report to LG once you have been released from your duties by your employer, trustee, estate or restructuring agent. This is because missing documentation can prolong the case processing time.

If your employer is undergoing restructuring, you must also be on garden leave.  

4. You are not closely related to the company

You cannot receive money from LG if you are closely related to the company, for example, if you own part of the company or are married to/cohabiting with the owner. You can find more information here:

5. You have worked for a Danish employer and usually performed your work in Denmark

As a general rule, you can receive money from LG if you worked for a Danish employer and usually performed your work in Denmark.

6. You can document your claims

You can only receive money from LG if you can document what you are still owed. You must therefore send relevant documentation when you register with LG, for example, the employment contract, payslips, etc. 

LG can cover a number of claims that you have not been paid by your employer because the employer has gone bankrupt, ceased operations and become insolvent, died and become insolvent, or is undergoing restructuring.

Types of claims LG can pay

LG can pay for the following claims:

  • Pay for work you have done
  • Pay for the notice period
  • Pensions
  • Holiday pay and holiday supplements
  • Extra holiday entitlements
  • SH payment (public holidays)
  • Free choice wage account
  • Special salary savings
  • Supplements (free car/telephone, bonus, commission, piecework surplus, overtime pay, etc.)
  • Compensation, e.g. severance pay or compensation for unfair dismissal or discrimination
  • Legal costs, e.g. expenses associated with court proceedings
  • Interest
  • ATP contributions
  • Salary during illness and maternity/paternity leave
  • etc.

Please note that if you register for a pension, LG will pay your pension later than your employer would normally have done. This may affect your insurance coverage with your pension company. LG encourages you to contact your pension provider so that you know what to do in this situation.

Xamples of claims that LG cannot pay

  • Mileage allowance, subsistence allowances and entertainment expenses
  • Costs which should have been reimbursed by your employer
  • Compensation for lack of employment certificate
  • Compensation for violations committed during the employment relationship
  • Fees and charges related to the filing of a bankruptcy petition
  • G-days (first to third day of unemployment)
  • Non-competition clauses.

You can receive a maximum payment of DKK 160,000. This amount does not include holiday pay, SH payments (public holidays), discretionary account balances and special salary savings balances.

Your employment status affects whether and how much you can receive. Find your position below to read more: 

The period for which you can receive payments

As a general rule, you can receive payment for unpaid pay, etc. for a period of up to six months. This period is calculated from the date on which a bankruptcy petition was filed, your employer ceased operations and became insolvent, died or went into administration.

In some cases, LG may pay out for periods longer than 6 months back in time. This requires LG to assess that you have done everything possible to get your employer to pay you – both immediately and continuously after the amount should have been paid to you.

Check whether your employer is bankrupt, has ceased operations or is under restructuring

If you are unsure whether your employer is bankrupt, has ceased operations, is insolvent or is under restructuring, you can check it here: 

What you can do if you are owed pay, etc., and your employer is not bankrupt, has not ceased operations, is not insolvent and is not under restructuring

Here you can read what to do if you are owed pay, etc., and your employer is not bankrupt, has not ceased operations, is not insolvent and is not under restructuring. 

How to report your claim

Start Make a claim to LG

You must submit a claim to LG if you are owed salary, etc.  

When can I submit a claim? 

You can only submit a claim for owed salary, etc. when your employer has been declared bankrupt, ceased operations, become insolvent, has died or is in restructuring. 

Please note that there are different deadlines for submitting claims for bankruptcies, ceased operations, insolvency, death or under restructuring.  

Are you a member of a trade union?

If you need help reporting your claim to LG, you can contact your trade union.

Start Reporting a claim

You must submit a claim to LG if you are owed salary, etc.  

When can I submit a claim? 

You can only submit a claim for owed salary, etc. when your employer has been declared bankrupt, ceased operations, become insolvent, has died or is in restructuring. 

Please note that there are different deadlines for submitting claims for bankruptcies, ceased operations, insolvency, death or under restructuring.  

Are you a member of a trade union?

If you need help reporting your claim to LG, you can contact your trade union.

Start Reporting a claim

You must submit a claim to LG if you are owed salary, etc.  

When can I submit a claim? 

You can only submit a claim for owed salary, etc. when your employer has been declared bankrupt, ceased operations, become insolvent, has died or is in restructuring. 

Please note that there are different deadlines for submitting claims for bankruptcies, ceased operations, insolvency, death or under restructuring.  

Are you a member of a trade union?

If you need help reporting your claim to LG, you can contact your trade union.

Deadlines in the event of bankruptcy and cessation of operations 

When you report a claim to LG, you should be aware of our deadlines for reporting which are: 

  • No later than 4 months after your employer has been declared bankrupt. 
  • No later than 6 months after your employer has ceased operations and been declared insolvent. 

Deadlines in the event of death 

If your employer has died, there are 2 deadlines that must be observed: 

  • You must report your claim for wages etc. to LG no later than 4 months after the bankruptcy court has decided if your employer's estate is insolvent. 
  • You must also report your claim for wages etc. to the lawyer of your deceased employer's estate no later than 8 weeks after a notice has been published in the Danish Official Gazette. 

Deadline for reporting claims during restructuring 

If you have been terminated or released from your duties before or during your employer’s restructuring, there is no deadline for reporting claims. However, it is a condition that you have reported your claim to LG and that LG has processed your claim before your employer’s restructuring is completed. 

LG receives many new claims and inquiries every day, and they will be dealt with in the order in which they are received. 

You can read more about when you can expect to hear from LG: 

If you have been terminated and released from your duties during restructuring, LG can only process your claim while your employer is undergoing restructuring.

Is there anything I can do myself? 

You can help ensure that your submitted claim is processed as quickly as possible. You can do so by remembering to send all necessary documentation along with your claim.

Payment

Salary

LG deposits your salary to you. 

It takes 3 to 5 business days for the transaction to go through. 

Holiday allowance

LG deposits your holiday allowance to FerieKonto. 

You can apply for the payment of your holiday allowance by contacting FerieKonto. 

For trade unions and attorneys

If you are a representative of an employee, you can help the employee report a claim to LG. The employee will give you a power of attorney for the claim.  

Power of attorney

It is your responsibility when having power of attorney to communicate information from LG to the employee. 

This applies until the case is completely processed by LG. 

Revocation of powers of attorney

If you no longer need to have power of attorney in the case, you must send a notification of this to LG. 

In the event of restructuring

As a holder of a power of attorney, you will not get access to see how much has been paid to an employer during a restructuring process. 

The payments during a restructuring process have no impact on the employee’s opportunity to later get paid salary, etc. from LG in the event of a bankruptcy.

Other topics

The Employees' Guarantee Fund (LG) ensures that employees receive wages etc. when their employer is declared bankrupt, ceases operations or under restructuring. If your employer undergoes restructuring, LG can help employees who have been terminated and released from their duties. LG can also help the employer to pay wages to employees working for the company, while it is subject to financial reconstruction.

If you do not agree with LG's decision

The legislation to which LG is subject falls within the Danish Ministry of Employment, but you cannot complain about the decision to the Ministry. If you do not agree with LG's decision, you are welcome to contact us and possibly send further documentation supporting your claim. LG will review your case and send you a new decision. 

If you still do not believe that our decision is correct, you will have to initiate legal proceedings against LG at the courts. LG has no appeals board, and therefore the case can only continue at the courts. In this case, you must contact the court in Hillerød. 

Contact the customer ambassador 

If you are dissatisfied with the service you received from LG, you can contact ATP's customer ambassador: 

LG was established in 1972 and is part of the Danish social safety net. 

LG is an independent institution, managed by the social partners and governed by a special legal statute.

Written by Lønmodtagernes Garantifond (LG)

Contact LG

Last updated: 17 March 2026

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