FOGASA, Wage Guarantee Fund

If you have ever found yourself in the situation where the company you work for does not pay your salary, you have probably heard of the Wage Guarantee Fund, better known by its acronym FOGASA (Fondo de Garantía Salarial). But, do you really know what it is and whether you are entitled to it? In this article, thanks to our team of employment lawyers, we are going to tell you everything you need to know about it.

What exactly is FOGASA?

The Wage Guarantee Fund is basically an autonomous administrative body that has the capacity to act on the basis of its own legal personality but which depends on the Ministry of Labour and Social Affairs of the Spanish Government. Specifically, it is a publicly financed system whose objective is to guarantee the family and social purpose of the wage when the employer is unable to do so.

Therefore, it should be considered as the body in charge of making effective all those salaries that are pending payment, including the possible compensations recognised to the employees and their salaries in process, when there is a demonstrable insolvency event on the part of the employer or the employer is in insolvency proceedings. 

It should be noted at this point that FOGASA is not obliged to pay any wages or compensation when the absence of payment is due to the insolvency of a first company that had the services under a subrogation regime, provided that the latter has liquidity. Likewise, workers in the family home and members of worker cooperatives are also not beneficiaries.

It should also be noted that the Social Guarantee Fund is financed by the contributions paid by employees working in public or private companies. It also obtains another part from the subrogation of the worker's actions against the company and from the income it obtains as a result of its assets.

What wages are covered by FOGASA?

FOGASA pays eligible workers their outstanding wages with the corresponding special payments. In fact, it also covers processing wages arising from the insolvency proceedings or declaration of insolvency to which the company is subject. However, there are nuances that need to be explained.

There is a maximum amount set by FOGASA for the payment of wages and compensation owed. Specifically, this is calculated by multiplying, as a maximum, the minimum interprofessional wage of one day by three, taking into account the proration of the extraordinary payments. The resulting figure is then multiplied by the number of days outstanding. The maximum, in this sense, is 150 days. In turn, the wages due must be recognised in a Court Resolution or, failing that, in a Conciliation Act in order for the Wage Guarantee Fund to give the go-ahead for payment.

What period does FOGASA set for the presentation of claims?

FOGASA provides for a period of one year for the filing of the claim from the moment in which the judicial sentence is issued, the conciliation act is held or the resolution of the competent labour or judicial authority is produced. In the event that the company is in insolvency proceedings, this period may be interrupted when enforceable actions or actions for recognition of claims are brought.

How is the application for benefits to FOGASA formulated?

The procedure can be initiated ex officio, i.e. when the peripheral administrative unit or the General Secretariat deems it appropriate, or at the request of the interested parties, which is usually the most common. This application must be made using the official form, which can be downloaded from the Internet or obtained from the FOGASA regional office, and must be accompanied by the following documentation:

- Photocopy of ID card.
- Certificate of employment history.
- Judgment of the Social Court or Minutes of Conciliation in the event that payment of wages is requested.
- Administrative resolution or court ruling that determines the termination of the employment relationship between the worker and the company when payment of compensation is requested. 
- Letter of dismissal and court decision stating the amount of compensation if payment is requested for termination of the employment contract on objective grounds.
- Proof of the insolvency of the employer, i.e. the Insolvency Order in the event that the process has followed the labour enforcement route or the Ruling of Admission to Proceedings if it has followed the insolvency proceedings. 
- Certification that the credit owed by the company to the worker is recognised.

How does FOGASA pay the amounts?

In the application, the worker must state a bank account in which he/she wants the amount to be paid after the processing of the case. 

In this regard, it should be noted that the Wage Guarantee Fund may refuse payment in certain situations, even if all the relevant documents are available and presented. This is the case, for example, when the claim is submitted after the deadline or, failing that, when the benefits requested are not covered by this body. 

On the other hand, even if the documentation provided, even if it is a final court judgement, shows certain amounts, FOGASA retains the right to only partially recognise these and to pay you different amounts based on the calculations it makes. In the event that the beneficiary considers this to be unfair or does not agree, he/she has the right to file a lawsuit against this body. This must be filed in the Social Court within a maximum of one year after the notification of payment.

 At G.Elias y Muñoz Abogados we hope that we have been of help to you and that, from now on, you are much clearer about what the Wage Guarantee Fund consists of and whether you are entitled to make use of it if you need it.