What if the factory closes down and sells its equipment, which is not enough to pay the workers?

According to Article 113 of the Bankruptcy Law of People's Republic of China (PRC), the bankrupt property shall be paid off in the following order after the bankruptcy expenses and beneficial debts are paid off first: (1) The wages, medical care, disability allowance and pension expenses owed by the bankrupt to the employees shall be included in the basic old-age insurance and basic medical insurance expenses of the employees' personal accounts, as well as the compensation that should be paid to the employees according to laws and administrative regulations; (2) Social insurance premiums and taxes owed by the bankrupt other than those specified in the preceding paragraph; (3) Ordinary bankruptcy claims.

The court will accept the bankruptcy of the company, and the employee debt is the first compensation order. Together with other workers, they can directly apply to the court to participate in the lawsuit and claim the company's arrears of wages.

If the company fails to apply for bankruptcy in the court, the debtor may apply to the people's court for reorganization, reconciliation or bankruptcy liquidation in accordance with the provisions of Article 7 of the Bankruptcy Law and under the circumstances stipulated in Article 2 of this Law. If the debtor is unable to pay off the debts due, the creditors (employees who are owed wages or other expenses) may apply to the people's court for reorganization or bankruptcy liquidation of the debtor.