In order to face the current crisis, the government has introduced various measures to alleviate the financial and operational burden of Luxembourg-based undertakings.
1. Short time work (chômage partiel)
The most important relief measure is known as "short time work" or partial unemployment. Pursuant to Article 511 of the Luxembourg Labour Code, short time work is available in the event of an economic downturn that leads to a decrease in demand and the need for labour. Article 511 states that short time work may be used to cope with events of force majeure, such as the present pandemic.
Which employers are concerned?
All employers established in the Grand Duchy of Luxembourg employing staff and whose activity is adversely affected by the current crisis may apply for short time work for employees:
- who do not have an incapacity certificate;
- whom the employer can no longer keep employed on a full-time schedule or no longer employ at all:
- because the employer's supplier can no longer supply raw materials due to the COVID-19 crisis; or
- in the event of a sharp drop in customer demand due to the COVID-19 crisis; or
- if the employer can no longer continue operating normally or if one or more departments are at a complete standstill due to the absence of staff or external decisions relating to COVID-19.
Which employees are concerned?
Short time work is available to any employee whose position is affected by the present exceptional circumstances, regardless of whether the employee has an open-ended employment contract (CDI) or a fixed-term contract (CDD). On the other hand, the scheme is not available to interim employees, those subject to a notice period or employees who are unable to work for medical reasons (with a certificate of incapacity). In order to be eligible for short time work, employees must take any leave remaining from last year (2019).
How can you apply for short time work?
The employer must submit an application to the Comité de Conjoncture (email@example.com or 19-21 Boulevard Royal L-2914 Luxembourg), along with its financial statements for the past three financial years and proof of payment of social security contributions.
Businesses that are directly affected by a government decision restricting their activities are immediately eligible and may use the fast-track procedure (meaning they do not have to submit their financial statements for the past three financial years and advances are paid based on the company's current payroll). Requests will be dealt with directly by the National Employment Agency (ADEM).
In both cases, applications can be submitted online using this form.
How does the programme work?
The employer is entitled to receive at least 80% of the labour cost corresponding to unworked hours, with a minimum of 100 % of the minimum wage for an unskilled employee (i.e., EUR 2,141.99) and capped at 250% of that amount (i.e., EUR 5,354.97), with a maximum of 1,022 hours per employee per year. Further to the latest changes to the short-time rules, the employer receives an advance of 80% of the total salary cost for the employees concerned, subject to the abovementioned cap of EUR 5,354.97 per employee.
Afterwards, the company submits to the National Employment Agency (ADEM) a statement regarding the hours the employees concerned effectively worked and must reimburse a corresponding amount.
What are the obligations of a company applying for short time?
By submitting an application for short time work, the employer undertakes not to make any dismissals for economic reasons during the period covered by this measure. The company must also not renew expiring fixed-term employment contracts concerned by short-time working or conclude new fixed-term employment contracts during the relevant period. On the other hand, the company can renew fixed-term employment contracts that are not concerned by short time work. The company must also not use interim employees during this period.
How can you renew an application for short time work?
Short-time working is only available for one month. If the exceptional circumstances persist, the company must apply to renew this measure a monthly basis, before the 12th day of each month. The request must specify any changes the company has experienced in the interim. It is not necessary to resubmit the financial statements and the certificate of payment of social security contributions with renewal applications.
For more information, please visit guichet.lu - partial unemployment force majeure or contact the short-time hotline set up by the Ministry of the Economy at 8002 9191.
2. Family leave
People who have no other suitable option for childcare (for children under 13 years of age) during the COVID-19 crisis may apply for extraordinary family leave. This measure was recently extended until 3 May 2020, the currently scheduled end of the school and nursery closure.
It should be noted that leave cannot be taken by both parents at the same time, but is very flexible and can be taken partially. This measure cannot be combined with other types of leave; therefore, if one parent is on short time work, for instance, neither parent in the household is in principle entitled to take extraordinary family leave.
The employee must contact the employer to inform it that (s)he is taking leave for family reasons and indicate how (s)he will take such leave (part time or full time). A specific form, the "certificate of leave for family reasons in the context of containing the spread of an epidemic (COVID-19)", must be completed and sent to both the employer and the National Health Fund (CNS). For leave and extensions of leave after 30 March 2020, please use this form.
Pregnant women can benefit from special leave of at least one (1) month.
The duly completed form has the same value as a medical certificate within the meaning of Articles L.234-53 and L.234-54 of the Labour Code as far as the employer and the National Health Fund (CNS) are concerned.
Under the usual procedure, the employer continues to pay the wages of the employees concerned. Subsequently, upon final determination of the leave for family reasons effectively taken, the employer is entitled to a reimbursement. In the particular circumstances of the coronavirus crisis, the government will pay employers an advance so that they can continue to pay the salaries of their employees.
3. Facilitation of cross-border mobility
Now that several neighbouring countries have set up border controls, the Luxembourg authorities have issued a certificate that Luxembourg-based employers must sign to confirm the employment relationship with cross-border workers in order to facilitate their entry into Luxembourg.
To download this certificate for a cross-border worker residing in:
• Germany, click here;
• Belgium, click here;
• France, click here (this document must also be signed by the employee, who also needs to complete the justificatif de déplacement professionnel and attestation de déplacement dérogatoire issued by the French authorities).
4. Flexibility in the payment of social security contributions
The Joint Social Security Centre (CCSS) and the Minister of Social Security have taken several measures to provide for greater flexibility in the payment of social security contributions. The following temporary measures entered into force on 1 April 2020:
- suspension of the calculation of default interest for late payments;
- suspension of collection of contributions;
- suspension of enforcement measures by bailiffs;
- suspension of the imposition of fines on employers for the late submission of social security returns.
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