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  • Last updated: 12-10-2020

Between March and June 2020, the Luxembourg authorities implemented an extraordinary short-time work scheme, which allowed employers whose activity had been completely or partially halted pursuant to government measures intended to fight the spread of COVID-19 to benefit from swifter decisions by and advance payments from the Luxembourg Unemployment Agency (“ADEM”).

At the end of each month, employers had to submit a precise calculation of the total number of short-time hours for their employees. ADEM then compared these figures with the advance payments made, which sometimes revealed a debit balance.

In July 2020, substantial changes were made to the short-time work scheme, which has now been extended until (at least) December 2020. The Economic Committee (Comité de Conjoncture), chaired by the minister of labour and the minister of the economy, has agreed on a new way of processing short-time work figures going forward. Debit short-time work balances relating to the period from March to June 2020 will be set off against the short-time compensation payable in the period from July to December 2020.

Now that ADEM has finished processing the figures for March-June 2020, employers will receive an updated statement, indicating either a positive or a negative balance:

  • in the case of a positive (credit) balance: ADEM will, in principle, pay the remaining amount due;
  • in the case of a negative (debit) balance: if the company concerned has not yet repaid the amount due, it will be set off against any short-time compensation payable for July 2020 and the following months.

Companies with a debit balance that did not apply for the short-time work scheme in July 2020 or any subsequent month are obliged to repay all amounts due within 30 days from receipt of their updated statement.

The Economic Committee will implement the new compensation mechanism in mid-October 2020.

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