Employer Bankruptcy and Unpaid Wages: Federal Help for Workers

When an employer enters a qualifying insolvency process, the Wage Earner Protection Program may cover certain unpaid amounts. A proof of claim and program application are distinct steps.

Adapted from a guide first written for Quebec readers: passages specific to Quebec were removed. Rules in your province may differ.

Confirm that the insolvency process qualifies

The federal Wage Earner Protection Program (WEPP) may provide payment for eligible unpaid wages, vacation pay, termination pay or severance pay when an employer is in a qualifying bankruptcy or receivership proceeding and the worker meets the program’s conditions. A company closing, missing payroll or announcing financial trouble does not by itself establish WEPP eligibility.

A trustee or receiver normally administers the insolvency file. The employee may need to file a proof of claim with that professional and also complete the WEPP process. Program limits, eligible amounts and deadlines depend on the applicable legislation and insolvency date.

Assemble evidence before access disappears

• Save pay statements, schedules, employment contract, record of employment and any termination letter.
• Make a dated list of wages, vacation, termination or severance amounts that appear unpaid.
• Ask the trustee or receiver for the file number and proof-of-claim instructions.
• Apply through the official WEPP process and keep confirmation numbers and copies.

Read the federal Wage Earner Protection Program guide and follow the trustee’s instructions. Read the French guide →

Sources and limits

Sources: Employment and Social Development Canada, Wage Earner Protection Program; trustee or receiver instructions for the insolvency file. Eligibility, payment caps and deadlines are set by current federal rules.

General information based on federal and national rules; provincial rules may differ. Confirm with the official body before acting.