The benefit involves the following payments:
- Wage debt and severance pay to the employee: the employee is entitled to claim from the National Insurance Institute payment of unpaid wage and severance. Linkage differentials will be added to the payment, from the date of receipt of the debt claim until the date of actual payment by the National Insurance Institute.
- Debt to provident fund: the fund may claim from the National Insurance Institute the employer's debt to the fund, as well as the deductions that it was obligated to transfer to the fund, excluding severance pay component.
Payment to the employee: wage debt and severance pay
Wage debt
In calculating wage debt, the following components are automatically taken into account:
Basic salary, seniority increment, cost of living increment, family increment that are considered "fixed salary".
If the salary also includes a professional or departmental supplement, these supplements will be considered as part of the basic salary.
As part of a wage debt, you can also receive payment for these components:
- Prior notice – payment for the days of prior notice set forth in the Prior Notice of Dismissal and Resignation Law.
Eligibility depends on the employee's seniority and the type of employment basis (hourly or monthly). - Wage differentials – wages that were not paid to you until the day you stopped working, for the last year of your employment.
- Redemption of vacation days – payment for the vacation days you had left until the day you stopped working.
Eligibility covers the last 3 years and the current year of termination of your employment, in accordance with the Annual Vacation Law. - Convalescence allowance – the part that was not paid to you until the end of the employment relationship, for the last year of your employment.
- Clothing allowance – the part that was not paid to you until the day you stopped working, for the last year of your employment.
- Redemption of holidays – in accordance with the extension order applicable to your workplace. Eligibility is for your last year of employment.
- Thirteenth month of salary – in accordance with the extension order applicable to your workplace. Eligibility is for your last year of employment.
- Non-provisions for provident fund – If a provident fund was not opened for you, you can claim the sums that the employer was obliged to transfer to the fund. Eligibility is conditional upon the existence of an expansion order applying to the employer and fulfillment of conditions of entitlement set forth in the order.
Eligibility for payment of allocations for provident fund and advance study fund, stands for your last year of employment.
The following components are not taken into account for the purpose of wage payment: Reimbursement of expenses, such as car maintenance, telephone, food and accommodation, redemption of sick days, and any component that is not defined as a wage debt under the Wage Protection Law.
Severance Pay
Eligibility is determined according to section 14 of the Severance Pay Law:
If your employer did deposit payments of 6% for severance to a provident fund (for the entire period of employment) – you will be entitled to a severance pay of up to 28% of fixed salary.
If your employer did deposit payments of 8.33% for severance to a provident fund (for the entire period of employment) – you will not be entitled to severance pay.
Payment of a debt to a provident fund
The fund may claim from the National Insurance Institute the employer's debt to the fund, as well as the deductions that it was obligated to transfer to the fund, excluding severance pay component.