Wage Guarantee - Definitions

Language

Below are explanations of some of the terms used in connection with the wage guarantee scheme.

Administrator of the estate

When bankruptcy proceedings commence, an administrator of the estate (a lawyer) is appointed.

Other employee pay

For example, contract settlement, commission or overtime pay. Claims to cover expenses or outlay you have had in connection with use of a private car, per diem, tickets, etc.are not covered by the guarantee scheme.

Employer’s National Insurance contributions (payroll tax)

Your employer must pay National Insurance contributions (payroll tax) on wages or other remuneration for work performed in Norway, regardless of your or your employer’s connection to Norway. If you have performed work in another EEA member state and your employer can only be declared bankrupt in Norway, the claim may be covered by the Norwegian wage guarantee scheme, even if payroll tax was not paid to the Norwegian authorities. The condition is that you will not receive wage guarantee coverage in the country whose social security system you are a member of or where you have performed work.

Due date of payment

This the date on which you normally receive your pay. If you have not agreed a fixed dated, the Working Environment Act states that wages must be paid at least twice a month.

Date of filing

The date of filing is usually the day the district court received the petition for bankruptcy that resulted in commencement of bankruptcy proceedings.

Collection costs

These are costs that you or your union have had in connection with trying to collect your pay claim, such as expenses linked to submitting the claim, complaints or summons.

Insolvency

In order to commence bankruptcy proceedings, the enterprise must be insolvent. This term is defined in the Bankruptcy Act and means that the enterprise cannot meet its financial obligations as they fall due and also does not have assets or income that can cover the debt. The payment problems must also not be temporary. 

Statutory period of notice

A mutual period of notice of one month, unless otherwise stated in a collective wage agreement. If you have been continuously employed for at least five or ten years in the same enterprise, the mutual period of notice is at least two or three months. If your are dismissed after ten years’ continuous employment in the same enterprise and your are 50, 55 or 60 years old, you are entitled to a period of notice of four, five and six months respectively.

The period of notice usually runs from the first day of the month after you were dismissed.

Cover of expenses associating with filing a petition for bankruptcy

Reasonable costs that you or your union have incurred in connection with filing the petition for bankruptcy may be covered. For example, this may be costs linked to the claim (letter to the employer showing the basis and scope of the claim), the bankruptcy notice and the petition for bankruptcy.

The costs linked to the claim and bankruptcy notice are included in the maximum amount of 2 x the National Insurance basic amount that can be covered by the wage guarantee. Costs llinked to the petition for bankruptcy may be covered in addition to the maximum amount.

Wage agreement

This is an agreement between a union and an employer or employers’ association concerning terms and conditions of employment and pay etc.