The Wage Guarantee Fund, universally known by its Spanish acronym FOGASA (Fondo de Garantía Salarial), is a Spanish public entity attached to the Ministry of Labour, Migration, and Social Security. Its main function is to protect workers in the event of their employer’s insolvency, suspension of payments, or bankruptcy.
While no one wishes to face this situation, it is crucial to know that FOGASA serves as a vital safety net, guaranteeing the payment of outstanding salaries and severance packages. In this article, we explain what FOGASA is, the requirements for applying, and the procedure for claiming the owed amounts.
What Does FOGASA (Wage Guarantee Fund) Cover?
FOGASA covers two specific types of debts that an employer has failed to pay the worker due to the company’s financial difficulty:
1. Outstanding Salaries
- Coverage: This includes salaries, including the pro-rata portion of extraordinary payments (pagas extraordinarias), owed by the company.
- Limit: There is a statutory maximum amount that can be claimed: it cannot exceed double the daily Minimum Interprofessional Salary (SMI), with extraordinary payments prorated, multiplied by the number of outstanding payment days, up to a maximum of 120 days.
2. Severance and Contract Termination Payments
- Coverage: This includes severance pay for unfair dismissal (despido improcedente), collective dismissal (despido colectivo), contract termination due to objective causes, force majeure, or judicial resolution of the employment relationship.
- Limit: The maximum amount covered for severance pay cannot exceed the equivalent of one year of the Minimum Interprofessional Salary (SMI), calculated at 30 days per year of service.
Crucial Requirement: FOGASA (Wage Guarantee Fund) only covers these amounts if the company has been officially declared insolvent or placed under creditors’ voluntary arrangement (concurso de acreedores). It is not an entity that substitutes the employer for any standard payroll default.
Requirements and Deadlines to Apply to FOGASA
To apply for FOGASA assistance, the worker must meet several essential requirements and strictly adhere to established deadlines:
- Official Declaration of Insolvency: This is the main requirement. The employer’s insolvency must be declared by a judicial resolution (either a court order declaring insolvency or a court order approving a creditors’ arrangement).
- Acknowledgement of Debt: The amounts being claimed must be formally recognized, either by a definitive judicial sentence or through an administrative conciliation act (acto de conciliación) signed by the Labour authorities.
- Application Deadline: The worker has a strict statutory deadline of one year from the date of the court order declaring the insolvency or from the date of the sentence that formally recognizes the debt.
The deadline is peremptory, meaning it is vital not to delay the application once all necessary legal documentation is obtained.
How to Apply to FOGASA
The process for claiming FOGASA (Wage Guarantee Fund) benefits is relatively simple, provided all documentation is correctly in place.
- Gather Documents: Collect all documents confirming the company’s debt and its insolvency. This includes the judicial sentence or conciliation act recognizing the debt, the court order of insolvency, and the worker’s employment documentation (pay slips, contract, etc.).
- Submit the Application Form: The application can be filed electronically through the FOGASA Electronic Headquarters (Sede Electrónica), using a digital certificate, DNIe, or Cl@ve system. Alternatively, it can be presented in person at FOGASA offices by booking a prior appointment (cita previa).
- Resolution and Payment: Once the application is submitted, FOGASA has a maximum period of three months to resolve the file. If the application is favorable, the approved amounts are paid within a reasonable timeframe. If the resolution is negative, the worker has the right to appeal.
FOGASA is an organism of vital importance within the Spanish social protection system. It acts as a fundamental safeguard for workers facing the difficult situation of employer insolvency, ensuring that their effort and work are not left without due compensation.
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