New Irish Law Allows Workers to Access Insolvency Payments Scheme from December 8, 2024

Minister for Enterprise, Peter Burke, activated new legislative provisions on Monday, allowing workers owed money by employers who ceased trading without formal insolvency to access the Insolvency Payments Scheme. This «deemed insolvent» measure enables workers to recover wages, holiday pay, and sick pay from employers who did not undergo liquidation, receivership, or bankruptcy when closing their businesses.

The Protection of Employees (Employers’ Insolvency) (Amendment) Act 2026 addresses a shortfall identified in a 2018 Supreme Court case regarding Ireland's transposition of a 2008 EU directive on employee protections. Workers whose employment was terminated after December 8, 2024, and whose employer stopped trading without formal insolvency, can now seek payment. The original employment must have been subject to PRSI.

Employees must first approach their employer for payment. If no payment is received after eight weeks, they can apply directly to the Insolvency Payments Scheme. Employers have four weeks to respond to claims. Payments are limited to eight weeks of arrears for wages, holiday pay, contractual sick pay, and minimum notice, capped at €600 gross weekly wages.

This new legislation does not apply if an employer went through normal insolvency or if they are still in business but refusing to pay; in such cases, workers must contact an insolvency practitioner or the Workplace Relations Commission, respectively. Minister for Social Protection Dara Calleary noted that a separate scheme for employees in similar situations between October 22, 1983, and last Sunday will open applications early next year.