According to ILO Convention No. 173 (1992), the term “insolvency” refers to situations in which, in accordance with national law and practice, proceedings have been opened relating to an employer’s assets with a view to the collective reimbursement of its creditors. The term may extend to other situations in which workers’ claims cannot be paid by reason of the financial situation of the employer, for example where the amount of the employer’s assets is recognized as being insufficient to justify the opening of insolvency proceedings. The extent to which an employer’s assets are subject to the proceedings of insolvency shall be determined by national laws, regulations or practice. The provisions of Convention No. 173 shall be applied by means of laws or regulations or by any other means consistent with national practice. In the event of an employer’s insolvency, workers’ claims arising out of their employment shall be protected by a privilege so that they are paid out of the assets of the insolvent employer before non-privileged creditors can be paid their share. The privilege shall cover at least: (1) the workers’ claims for wages relating to a prescribed period, which shall not be less than three months, prior to the insolvency or prior to the termination of the employment; (2) the workers’ claims for holiday pay due as a result of work performed during the year in which the insolvency or the termination of the employment occurred, and in the preceding year; (3) the workers’ claims for amounts due in respect of other types of paid absence relating to a prescribed period, which shall not be less than three months, prior to the insolvency or prior to the termination of the employment; (4) Severance pay due to workers upon termination of their employment. National laws or regulations may limit the protection by privilege of workers’ claims to a prescribed amount, which shall not be below a socially acceptable level. Where the privilege afforded to workers’ claims is so limited, the prescribed amount shall be adjusted as necessary so as to maintain its value. National laws shall give workers’ claims a higher rank of privilege than most other privileged claims, and in particular those of the State and the social security system. The workers’ claims protected shall include at least: (1) the workers’ claims for wages relating to a prescribed period, which shall not be less than eight weeks, prior to the insolvency or prior to the termination of the employment; (2) the workers’ claims for holiday pay due as a result of work performed during a prescribed period, which shall not be less than six months, prior to the insolvency or prior to the termination of the employment; (3) the workers’ claims for amounts due in respect of other types of paid absence relating to a prescribed period, which shall not be less than eight weeks, prior to the insolvency or prior to the termination of employment; (4) Severance pay due to workers upon termination of their employment. The payment of workers’ claims against their employer arising out of their employment shall be guaranteed through a guarantee institution when payment cannot be made by the employer because of insolvency. See: Guarantee institutions (employer’s insolvency); Insolvency of the employer; Insolvency (state of)