The Employees’ Guarantee Fund (LG) has reported a significant decrease in payments to employees, indicating that fewer companies are going bankrupt. In 2024, the fund paid out DKK 602 million in connection with 1294 bankruptcies, a 26 percent decrease compared to the DKK 812 million paid out for 1598 bankruptcies the year before.

This positive trend has continued into 2025 and is attributed to the strong state of the labor market, according to Anne Kristine Axelsson, Executive Vice President for Pension & Labour Market at ATP, the organization that manages the LG scheme. The current level of payouts is the lowest in 15 years, excluding 2021, which was heavily impacted by the Covid-19 pandemic and government aid packages.

To further assist employees affected by bankruptcies, the Employees’ Guarantee Fund has implemented a new “partial payment” solution. This allows employees to apply for 80 percent of their salary to be paid out during their notice period. This initiative aims to provide faster financial relief, enabling eligible employees to receive a substantial portion of their salary from the fund within just five days.