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Ireland's Protection of Employees (Employers' Insolvency) (Amendment) Act 2026 took effect on June 8, 2026, creating a new pathway for employees to claim unpaid wages, holiday pay, sick pay, and payment in lieu of notice when employers cease trading without entering formal insolvency proceedings. Eligible employees (Class A PRSI) can access the Insolvency Payments Scheme administered by the Department of Social Protection after seeking payment from the employer for 8 weeks. The change addresses Ireland's incomplete transposition of EU Directive 2008/94/EC following the 2018 Glegola Supreme Court decision.
Ireland launches Deemed Insolvent Process for unpaid wages effective June 8, 2026
Ireland's Protection of Employees (Employers' Insolvency) (Amendment) Act 2026 took effect on June 8, 2026, creating a new pathway for employees to claim unpaid wages, holiday pay, sick pay, and payment in lieu of notice when employers cease trading without entering formal insolvency proceedings. The change addresses a gap in Ireland's transposition of EU Directive 2008/94/EC identified by the Supreme Court in the 2018 Glegola decision and applies to unpaid entitlements that fell due on or after December 8, 2024.
Who is affected
Employees whose employer stopped trading without liquidation, receivership, or bankruptcy and who are owed wages, holiday pay, sick pay, or payment in lieu of notice. Employment must have been fully insurable under the Social Welfare Acts (Class A Pay Related Social Insurance (PRSI)).
Employers who ceased trading will be notified of claims and have 4 weeks to respond to the Department of Social Protection.
What's changing
Before June 8, 2026, employees could only access the Insolvency Payments Scheme if their employer entered formal insolvency proceedings (liquidation, receivership, or bankruptcy). Employees whose employers simply ceased trading with insufficient assets had no statutory route to recover unpaid entitlements from the Social Insurance Fund.
After June 8, 2026, employees can access the Insolvency Payments Scheme through the new Deemed Insolvent Process when employers cease trading without formal insolvency, provided the employee first seeks payment from the employer and waits 8 weeks without receiving it.
| Covered payments | Details |
|---|---|
| Outstanding wages | Unpaid salary or wages due |
| Holiday pay | Accrued but unpaid annual leave entitlement |
| Sick pay | Statutory sick pay owed |
| Payment in lieu of notice | Minimum notice period compensation |
| Pension contributions | Certain employer pension obligations |
| WRC/Labour Court awards | Statutory employment rights awards |
The deemed insolvency determination applies only for accessing the Insolvency Payments Scheme and does not affect an employer's legal status under the Companies Act 2014, Bankruptcy Act 1988, or Personal Insolvency Act 2012.
What NEO partners and clients should do
- Review Irish payroll closeout procedures to ensure employees whose employer ceases trading are informed of the Deemed Insolvent Process and the 8-week waiting period requirement.
- Document cessation dates for any Irish entity wind-downs to establish eligibility timelines for affected employees.
- Monitor Q1 2027 for the opening of the Historical Deemed Insolvent Process, which will cover situations arising between October 22, 1983 and June 7, 2026.
- Direct affected employees to gov.ie/deemedinsolvency to apply after the 8-week employer response period expires.
