Company insolvent: The checklist for job, pay and deadlines

Your salary is late, suppliers are at the door, or management announces insolvency proceedings: in this situation employees can quickly face existential pressure. Still, hasty action is risky. Insolvency does not automatically terminate the employment relationship, outstanding claims are not paid out automatically, and a premature resignation or an unexcused absence can worsen your position.

If the employer is insolvent in Austria, the Insolvenz-Entgelt-Fonds protects many claims arising from the employment relationship. To do so, claims must be correctly determined, registered with the insolvency court, and applied for at IEF-Service GmbH. This guide shows what to do immediately, which documents count, and when the Arbeiterkammer, Insolvenzschutzverband and AMS should be involved.

The most important rules in 60 seconds

The opening of insolvency proceedings does not automatically terminate the employment.
As long as the employment relationship remains in effect, work must generally continue.
Outstanding claims arising before the opening of insolvency proceedings must be filed in the proceedings and applied for at the IEF.
The application for insolvency pay must generally be submitted within six months.
Employment contract, payslips, time records, bank statements and vacation balance should be secured immediately.
A voluntary resignation or an early departure should never take place without individual legal advice on employment law.
If the job ends, the application for unemployment benefits must be made no later than the first day of unemployment.

This sequence is more important than frantic one-off actions: check the official status of the proceedings, continue working properly, secure evidence, obtain advice, and submit claims on time.

Is the company really insolvent or merely experiencing payment difficulties?

A late salary is a serious warning sign, but not yet proof of opened insolvency proceedings. Insolvency pay requires a statutory insolvency event, such as the court's opening of proceedings or certain cases where the opening is refused due to lack of assets. Rumours within the company, an empty order book or a letter from a supplier do not replace this formal step.

The official status can be checked free of charge in the "Edicts database of the Austrian judiciary prüfen. The insolvency edict contains, among other things, the court, the file number, the type of proceedings, the insolvency administration, as well as important dates and deadlines. Save a printout or a PDF copy and note the date of publication.

If no proceedings have yet been opened, outstanding payments should be demanded in writing and in a verifiable manner. Because of possible collective bargaining or contractual limitation periods, early advice is important. Do not wait months for the situation to resolve itself.

What happens to the employment relationship?

The central message is: the employment relationship initially remains in place despite the opening of insolvency proceedings. In bankruptcy or restructuring proceedings without self-administration, the insolvency administrator appointed by the court generally assumes the role of employer. In a restructuring proceeding with self-administration, there are special rules.

Employees must therefore continue to appear for work and perform their contractual duties as long as they do not receive another binding instruction or a valid termination. Anyone who simply stays at home out of fear risks employment-law consequences. Nor should one resign on the basis of a rumor.

Whether the business will be continued, sold, downsized, or closed is decided in the proceedings. Continuation can preserve jobs; however, it does not guarantee that every employment relationship will remain in place. If a company or part of a business is taken over, the rules on transfer of undertaking may also be relevant. For this, jobspot offers the guide If the business is sold.

Which claims are secured by the Insolvency Remuneration Fund

The Insolvency Remuneration Fund helps secure the livelihood of employees when an insolvent employer can no longer pay outstanding claims. Under the Insolvency Remuneration Security Act, those entitled to claim include employees, apprentices, certain freelance contractors, and home-based workers.

Typical covered claims may include:

outstanding wages or salary,
pro-rated special payments such as vacation and Christmas pay,
overtime, additional hours, and allowances,
unreimbursed work-related expenses,
payment in lieu of vacation on termination,
Termination compensation,
certain severance claims and
certain costs of legal enforcement.

Whether and to what extent a claim is secured depends on the due date, the type of claim, the employment-law basis, statutory caps and the specific course of the employment relationship. IEF-Service GmbH reviews the application and issues a decision. A flat calculation based on the last net salary is not sufficient.

Two deadlines that are frequently confused

The application deadline with IEF

The application for insolvency pay must, under § 6 IESG, generally be submitted within six months of the opening of the insolvency proceedings. For certain other insolvency grounds the deadline begins from the time the corresponding decision is known. Those who miss it can lose claims. The date in the public notice should therefore be entered in the calendar immediately.

The secured period for older wage claims

A separate question is how far outstanding claims for remuneration extend before the reference date. § 3a IESG limits many remuneration claims to the last six months. For older claims, it can be decisive whether they were timely asserted and pursued in court or in an admissible procedure.

In practical terms: the six-month application deadline does not automatically allow you to reclaim arbitrarily old unpaid wages. Anyone who did not receive full remuneration for a prolonged period before the insolvency should have their documents reviewed immediately by the Chamber of Labour or a trade union.

The seven-step checklist after the opening of insolvency proceedings

1. Secure the public notice and contact person

Note the company name, court, file/reference number, opening date, registration deadline, date of the creditors' meeting and the contact details of the insolvency administrator. Do not rely solely on a company-wide circular email. Changes in the proceedings are also published in the insolvency file.

2. Properly offer your work

Continue to appear for work and document it if the business is closed or you are not admitted. Offer your work in a verifiable way and seek legal advice. Verbal instructions regarding release from duty, vacation or time off in lieu should be confirmed in writing.

3. Compile a complete file of documents

Store documents outside company devices and accounts where this is lawful and possible without taking trade secrets. Personal employment-related records belong in the personnel file; do not include customer data or internal confidential files.

The following are particularly important:

Employment contract and written statement of employment conditions,
applicable collective agreement and classification,
the most recent wage or salary payslips,
bank statements showing actual payments,
own working time and overtime records,
vacation and time credit balances,
receipts for outstanding expenses and charges,
correspondence regarding outstanding payments,
Termination notice, declaration of resignation, or other termination documents and
the insolvency notice including the case number.

Clean time records are particularly valuable when overtime or time off in lieu are outstanding. The jobspot-guide Record working hours explains which information helps in everyday situations.

4. Have claims calculated professionally

Gross pay, special payments, allowances, vacation and termination entitlements overlap. The Chamber of Labour supports those affected through the Insolvency Protection Association for Employees, or ISA for short. It can calculate claims, file the court claim, and represent individuals before the IEF.

This service prevents common mistakes such as incorrect time periods, missing allowances, or an inaccurate tax and social security calculation. Contact the Chamber of Labour of the federal state where you are employed as early as possible.

5. File the claim with the court

Outstanding claims arising before the opening of insolvency proceedings are insolvency claims. They must be filed with the competent insolvency court. The notice specifies the filing deadline and the examination date. If represented by the ISA, the necessary steps will be coordinated.

6. Apply for insolvency payment

The IEF application is not submitted automatically with the opening of insolvency proceedings. It can be filed by the claimant personally or by an authorized representative. IEF-Service GmbH offers electronic application filing; an electronic signature with ID Austria is required for this. Missing documents or incorrectly itemized amounts will delay processing.

7. Check ongoing payments after the opening

Clearly separate claims before and after the opening in your statement. If ongoing remuneration is not paid correctly after the opening of insolvency proceedings, prompt action is required. Depending on the stage of the proceedings and the claim, special exit rights and protective rules may apply. However, only declare an exit after specific advice; form, timing and justification are decisive.

Should I terminate my employment myself or exit early?

An insolvency alone is not a reason to spontaneously submit a resignation. Doing so can affect termination compensation, unemployment benefits and other entitlements. A justified early exit may be possible or even necessary in certain situations, but it must be carried out correctly under employment law.

The right decision depends, among other things, on when which payments are missing, whether the proceedings have already been opened, whether the insolvency administrator is paying, and what termination steps have been announced. The appropriate order is therefore:

document outstanding amounts and due dates,
check the edict and the status of the proceedings,
contact the Chamber of Labour or the trade union,
only then submit a declaration of termination.

Do not sign a "mutually agreed" exit under time pressure. Have it checked which claims the wording triggers and whether all outstanding items are included.

What to do when the job ends?

As soon as the end of the employment relationship is certain, you can already take care of unemployment benefits with the AMS up to three weeks in advance. At the latest on the first day of unemployment the application must be submitted; if this falls on a weekend or a public holiday, the following working day applies according to the AMS. A late registration can cost you money and cause gaps in health and pension insurance.

The notification to the AMS neither replaces the registration of claims nor the IEF application. Conversely, the insolvency proceedings do not replace the application for unemployment benefits. Several procedures are running in parallel. The jobspot guide "Register as unemployed after job loss guides you through the AMS steps.

Also request your employment papers, a complete final settlement, and, if desired, an employment reference. If documents cannot be issued or information is incorrect, bring this to your consultation.

Three typical practical cases

Case 1: Two months' wages are missing, but there is no edict yet

A female employee hears that the company will soon file for bankruptcy. She should demand the outstanding wages in writing, secure evidence, and seek advice immediately. An IEF application is not yet the right first step without a finding of insolvency. Because of possible limitation periods, she must not wait.

Case 2: Proceedings have been opened, the business continues to operate

The employment relationship remains in place. The employee continues to work, documents his hours and has the outstanding claims registered with the AK or ISA before the opening. He checks ongoing payments after the opening separately.

Case 3: The site closes and layoffs are announced

Before signing anything the employee obtains advice, secures vacation, time credits and pay statements, and clarifies the termination date. She registers with the AMS in good time while ISA and IEF proceedings continue in parallel.

Common mistakes in employer insolvency

Failing to show up for work:The employment relationship does not end automatically.
Relying only on internal information:The edict and the court's procedural status are decisive.
Leaving documents on the company computer:Personal records may be hard to access after a closure.
Mixing up six-month deadlines: Application deadline and secured entitlement period are not the same.
Roughly estimate claims yourself: Special payments, surcharges and termination claims are easily overlooked.
Terminate or resign prematurely: A mistaken step in ending employment can jeopardize claims.
AMS application forgotten: IEF and unemployment benefits are separate procedures.

FAQ: Employer insolvent in Austria

Will I automatically receive my unpaid salary?

No. Claims must be identified, filed in the insolvency proceedings, and applied for with IEF-Service GmbH. Assistance is provided by the Insolvency Protection Association of the Chambers of Labour and the Trade Unions.

Do I have to continue working despite the insolvency?

In principle, yes, as long as the employment relationship remains in effect and no other binding arrangement exists. If the workplace is closed or instructions are unclear, you should document your availability for work and seek advice.

How long do I have to submit the IEF application?

As a rule, six months from the opening of the insolvency proceedings or from becoming aware of certain other decisions. Do not rely on a general summary for the precise calculation.

Can I submit the application online?

Yes. IEF-Service GmbH offers electronic application submission with ID Austria. Representation by ISA is also possible.

What about independent contractors?

Freelance employees within the meaning of the ASVG may be entitled under the IESG. Contractors under a work contract are not automatically treated the same. The specific contractual form should be examined.

Conclusion: document, seek advice, secure deadlines

An employer insolvency is distressing, but outstanding claims are not unprotected in Austria. It is crucial to keep the procedures separate: the employment relationship initially remains in place, claims fall under the insolvency court, insolvency pay to the IEF and unemployment benefits to the AMS.

Check the official status, secure your personal documents today, and make a list of all outstanding amounts. Then promptly contact the Chamber of Labour or your union. Those who do not hastily terminate their employment and systematically work through the deadlines protect their job, income and insurance most effectively.

Sources and further information

Last updated: 4 August 2026. This article provides general guidance and does not replace individual legal advice. If you have outstanding wage claims or are facing a planned termination, those affected should promptly contact the Chamber of Labour, a trade union, or a qualified legal advisor.