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Luxembourg
Luxembourg is a small landlocked country in Western Europe bordered by Belgium, France, and Germany. It is a founding member of the European Union and one of the world’s leading financial centers. Luxembourg is a constitutional monarchy headed by the Grand Duke.
POPULATION
692 thousand inhabitants
CURRENCY
Euro (EUR)
GDP
$97 billion
MINIMUM MONTHLY WAGE:
3,244 EUR.
TIME ZONE
UTC +1
For many years, Luxembourg’s prosperity was formerly based on steel manufacturing.
With the decline of that industry, Luxembourg diversified and is now best known for its status as Europe’s most powerful investment management centre.
- Permanent contract (CDI)
- Fixed-term contract (CDD) – it cannot exceed 24 months, including renewal and can be renewed only 2 times maximum.
- Part-time contract
- Seasonal employment contract – it cannot exceed 10 months including renewals over a period of 12 successive months.
- Temporary agency work
The labour law provides a legal duration of 40 hours per week and 8 hours per day. The daily working time may not exceed 10 hours. In exceptional cases, it may be unlimited (occurrence of a serious accident or urgent work) or limited to 12 hours (continuous work).
If overtime is worked, the maximum working time per week cannot exceed 48 hours.
In all cases where the statutory working hours are exceeded, the ceiling of 40 hours per week can not be exceeded within a reference period of 4 consecutive weeks or more if the collective agreement provides for a longer reference period. Collective agreements may also provide for daily working hours that are less than the statutory provisions.
Overtime is generally compensated at a premium of 140% or with time off in lieu (1.5 hours per extra hour), depending on agreements.
The payment of overtime hours is exempt from taxes and partially exempt from social security contributions.
The employer must report any overtime and also send a statement of hours worked to the Inspectorate of Labour and Mines (Inspection du Travail et des Mines – ITM).
Annual paid leave, also called “annual recreational leave”, is granted to employees having worked for the same employer for 3 continuous months.
Annual leave totals 26 business days per year, regardless of the employee’s age. However, collective agreements or individual agreements may provide for an increase in the number of days of annual leave.
In general, employees must take their annual leave in full during the year. Any remaining annual leave may be deferred until 31 March of the following year.
After this deadline, employees lose their accrued leave, unless:
- the employee were unable to use their leave due to the employer’s operational needs;
- the employee were not able to schedule their leave due to illness;
- the employer and employee have entered into a specific agreement allowing employee to take the leave during the following year.
Employees in Luxenburg are entitled to 11 public holidays per annum.
In return for extra pay, employers may ask their employees to work on a public holiday.
1 Jan — New Year’s Day
6 Apr — Easter Monday
1 May — Labour Day
9 May — Europe Day
14 May — Ascension Day
25 May — Whit Monday
23 Jun — National Day
15 Aug — Assumption Day
1 Nov — All Saints’ Day
25 Dec — Christmas Day
26 Dec — St. Stephen’s Day
The term ‘maternity leave’ in Luxemburg covers two types of leave: antenatal leave and postnatal leave.
To qualify for the protection scheme for pregnant women, women are free to inform their employer of their pregnancy whenever they wish, but they must submit a medical certificate attesting to their pregnancy.
Antenatal leave begins 8 weeks before the expected date of delivery.
Postnatal leave continues for 12 weeks after the actual date of delivery.
The father is entitled to 10 days (or more, depending on the collective agreement of the company) of paternity leave.
Maternity allowances are paid by the CNS (The Caisse Nationale de Santé) and not by the employer.
On the first day of absence, employees must inform their employer orally or in writing of their incapacity for work. In addition, the medical certificate certifying the incapacity for work and how long it is expected to last, must be delivered to the employer by no later than the third day of absence.
During the sickness period, employees must:
- continue to be paid by their employer until the end of the month in which the 77th day of incapacity for work occurs, during a reference period of 18 consecutive months;
- and, where applicable, receive sickness benefit starting in the month following the 77th day of illness; The sickness benefit will be paid by Luxemburg social security authorities (CNS) for a maximum period of 12 months over the period of 2 years.
During the period in which the salary is maintained, the employer must comply with all clauses of the employment contract, since employees who are unable to work are entitled to the full salary and other benefits due to them under their employment contract, including any commission provided for in the contract.
Mandatory employee benefits in Luxemburg include:
- Employee’s compensation
- 13th-month pay
- Leave entitlements
- Social insurance
- Pension Plans/Retirement Contributions
- Supplementary Pension scheme
- Supplementary Health insurance
- Annual bonus
- Travel allowance
- Dental and Vision insurance
- Profit sharing bonus
- Meal allowance
- Gym or health club memberships
- Personal learning and development trainings
- Therapy or coaching allowance
- Mentorship programs
- Volunteering days
- Flexible working hours
Luxembourg is part of the European Union and the Schengen area.
Citizens of EU and EEA countries and Switzerland do not need a work visa for jobs in Luxembourg.
Nationals from non-EU countries who wish to visit, transit through or work in Luxembourg must, before their departure, have a valid travel document with a visa issued by a consular authority from one of the countries in the Schengen area.
Types of visas:
- Short stay visa (visa C) – to transit through or stay in Luxemburg for a continued or interrupted period of 90 days at the most during each period of 180 days for the purpose of:
– tourist or family visits;
-business trips (visiting professional partners, negotiating and concluding contracts, etc.);
-participating in conferences (conference speakers and university lecturers) exhibitions, fairs or shows;
-participating in board of directors’ meetings and general meetings;
-providing services within the same business group, etc.
- Long stay visa (visa D):
– the holder of a temporary authorisation to stay;
– the holder of a work permit for the purpose of carrying out a salaried activity;
– joining a family member who is an EU citizen.
In Luxembourg, a citizen of a third-party country requires a permit to work as an employee. If the person is not yet a legal resident in Luxembourg, the application for this authorization must be made before entering the country.
In the event of resignation, the employee must notify the employer by registered letter and ask for a signature on two copies of the letter of resignation, which shall constitute acknowledgement of receipt of the notification.
The employment relationship ceases after the expiry of the 1 to 3 months’ notice period, depending on the length of service of the employee.
An employer who dismisses an employee for reasons other than serious misconduct must give notice depending on the length of service:
- For employees with less than 5 years of service, 2 months’ notice
- For employees with between 5 and 10 years of service, 4 months’ notice
- For employees with more than 10 years of service, 6 months’ notice
The employee may also be dismissed with immediate effect for serious reasons. In such a case, the letter of notice of termination of employment must clearly state the fact in question.
The amount of severance pay is determined by the length of employment (for employers with less than 20 employees):
- Less than 5 years – no severance pay
- 5 to 10 years – 1 month’s salary
- 10 to 15 years – 2 months’ salary
- 15 to 20 years – 3 months’ salary
- 20 to 25 years – 6 months’ salary
- 25 to 30 years – 9 months’ salary
- 30+ years – 12 months’ salary
The severance pay is calculated based on the gross salary or wages actually paid to the employee over the 12 months prior to the notification of termination of the employment contract.
As a small country, Luxembourg has always turned itself towards the world and has incorporated the know-how of not only its residents but also of cross-border commuters and immigrants coming from all over the world in the country’s development.
With our immigration support solution, we can ensure 100% compliance with the local legislation in terms of expatriates ‘s employment in Luxembourg within a short period of time, in order to facilitate and speed up expansion of your business to the country.
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