Luxembourg HR Information

Updated on: 2025/08/05 15:25 (UTC)

Overview

The Luxembourg Constitution expressly grants citizens the right to work and to join trade unions. Since September 2006, employment relationships have been governed by a consolidated Labor Code, which replaced a variety of separate laws, rules, regulations and ministerial orders.

Luxembourg employment law applies to all work performed in the country unless the parties have agreed to application of the law of another country that is more favorable to the employee.

Hiring

Employment Contracts

All employment contracts must be in writing, a copy given to the employee no later than his or her start date, and must set forth the following:

• the names of the parties,
• the effective date of the contract,
• the place and nature of employment,
• the employee’s normal working hours,
• the employee’s wages,
• the frequency with which wages are paid,
• the length of any probationary period,
• any exceptions or additional clauses, and
• any applicable supplementary pension scheme.

The employment contract also must reference the law governing paid holidays and notice of termination, as well as any applicable collective bargaining agreements. An individual written employment agreement is required even for employment that is covered by a collective bargaining agreement.

Of Luxembourg’s three official languages (Luxembourgish, French, and German), the employment contract should be drafted in one understood by the employee.

Generally, employment contracts are presumed to be for an indefinite term. Fixed-term contracts may be used only to accomplish a specific, short-term goal, which must be expressly stated in the written employment contract. A fixed-term contract may not exceed 24 months in duration, including renewals. Once a fixed-term contract expires, the employer may not enter into another fixed-term contract for the same position until at least one-third of the total duration of the expired contract, including renewals, has elapsed. A fixed-term contract may be converted into a permanent contract if appropriate.

An employment contract may provide for a probationary period of at least two weeks, the maximum length depending on the qualifications and salary of the employee. For employees whose professional qualifications are less than required for a technical and professional proficiency certificate (CATP), the maximum probationary period is three months. For employees with at least a CATP or its equivalent, the maximum probationary period is six or 12 months, depending on salary.

If the probationary period is shorter than one month, the employment contract must define the probationary period as a period of whole weeks. If the probationary period is longer than one month, the employment contract must set forth the probationary period in whole months.

A probationary period may not be renewed.

Restrictions on Hiring

Before hiring, employers must report the open position to the Employment Administration.

Youths under the age of 15 may not be employed except in limited circumstances, such as work in technical and vocational schools if the purpose is educational and in sports, the arts, cultural events, advertising, and fashion if permission is granted by the government. Youths age 15 to 18 can be employed as long as their health and safety are not put at risk and employment doesn’t interfere with their education.

Recordkeeping

The employer must keep a record of all extensions of the normal hours of work and overtime worked on Sundays, public holidays or at night, as well as the wages paid, plus leave records for all employees. The records must be made available on request of the agents of the Inspectorate of Labor and Mines. The Labor Code does not set forth a requirement for the length of time such records must be kept.

Background Checks

Pre-employment background checks generally are permitted as long as they are relevant to the position and comply with the country’s anti-discrimination regulations.

Medical exams can be administered before the start of employment or within two months of the start of employment, but only in cases where the employee’s duties are dangerous or must be performed at night. The results of medical examinations cannot be communicated to the employer. Instead, the employer will be provided only with the decision on whether the employee is fit to work.

Noncompetition Agreements

The validity of a noncompetition clause in an employment contract depends on the extent to which the employer’s legitimate need to restrict the employee’s activities after the end of the employment relationship infringes upon the employee’s right to work in his or her chosen profession. A noncompetition clause is deemed void if it is not in writing or if the employee’s salary does not exceed a specified, indexed amount. If the annual wages exceed that amount, the noncompetition clause is valid if:

• it relates to a specific profession and to activities similar to those engaged in by the employer,
• the duration of the clause does not exceed 12 months from the date the employment contract ends, and
• the clause is geographically limited to locations where the employee could realistically compete with the employer and cannot extend beyond the borders of Luxembourg.

Reference Citations

Employment Contracts: Labor Code, 2006, art. L. 121-2 to 121-4 (French)

Restrictions on Hiring: Labor Code, 2006, art. L. 341-1 to 341-2 (French)

Recordkeeping: Labor Code, 2006, art. L. 211-27, 232-8 (French)

Immigration and Work Permits

In General

Citizens of European Union countries, European Economic Area countries and Switzerland do not need a visa or work permit to work in Luxembourg, although if they want to reside in Luxembourg for more than three months, they must obtain a registration certificate. Before hiring a third-country national, the employer must notify the Luxembourg Employment Agency (ADEM) that the job is vacant to allow ADEM to determine if the job can be filled by a local worker or a worker from the European labor market. Employers of “highly qualified” third-country nationals do not have to go through ADEM.

Visas and Work Permits

Requirements for foreign workers depend on the country of origin. Citizens of the European Union, Norway, Iceland, Liechtenstein and Switzerland have a right to reside in Luxembourg for more than three months if they:

• are either a wage-earning worker or an independent worker,
• have sufficient resources and health insurance so that they and their family members will not unreasonably burden the social assistance system, or
• are a registered full-time student in a recognized educational institution in Luxembourg or are receiving professional training in Luxembourg and have sufficient resources and health insurance so that they and their family members do not unreasonably burden the social assistance system.

Most EU, EEA and Swiss citizens also do not need a work permit to be employed in Luxembourg. The exceptions are citizens of Romania and Bulgaria, who are required to obtain work permits for their first full year of work in Luxembourg.

Third-country nationals who wish to live in Luxembourg for more than three months must follow a two-step process. Before arriving in Luxembourg, they must apply to the Immigration Directorate of the Ministry of Foreign Affairs for temporary authorization to stay. After arriving in Luxembourg, they must apply for a residence permit.

Before hiring a third-country national, the employer must notify the Luxembourg Employment Agency (ADEM) that the job is vacant to allow ADEM to determine if the job can be filled by a local worker or a worker from the European labor market. Employers of “highly qualified” third-country nationals do not have to go through ADEM. A highly qualified worker is defined as a person with an employment contract for one year or more for a highly qualified job who has documented professional qualifications required for the activity or the sector identified in the work contract, satisfies the requirements for the specific job at issue and is paid a salary at least 1.5 times the average gross annual salary.

Applications for temporary authorization to stay, which must be made and granted before arrival in Luxembourg, must be made in one of the following categories:

• salaried worker,
• highly qualified worker,
• transferred worker, and
• posted worker.

If the application is granted, the temporary authorization to stay is valid for 90 days, during which the third-country national must either apply for a visa or, if no visa is required, enter Luxembourg and register in the municipality of residence.

To obtain a residence permit, a third-country national with temporary authorization to stay must within three days of arrival in Luxembourg submit a declaration of arrival to the municipality of proposed residence and undergo a medical examination by a doctor licensed in Luxembourg.

The last step is for the third-country national to apply to the Immigration Directorate for a residence permit and appear personally to be photographed and fingerprinted, then apply to the municipality of residence for a residence certificate.

After the third-country national resides in Luxembourg for an uninterrupted period of five years, an application may be filed for the status of long-term resident. Third-country nationals who hold a residence permit valid for at least one year can be accompanied by family members immediately.

Penalties

Employers that employ an illegal immigrant face possible sanctions including criminal fines and imprisonment, as well as the temporary or permanent closure of business.

The law of 7 August 2023 came into effect on September 1, 2023. This law increases fines for employers who employ third-country nationals in irregular situations or residents without work authorization, with additional fines for aggregated offenses, including persistent repeated offences or particularly abusive working conditions. The Inspectorate of Labour and Mine is tasked with enforcing this law. Employers must therefore keep copies of residence permits and work permits in Luxembourg.

Reference Citations

Visas and Work Permits: Labor Code, 2006, art. L. 544-1 to 544-6 (French)

Penalties: Labor Code, 2006, art. L. 544-9 (French)

Nondiscrimination

In General

Employers are expressly barred from discriminating on the basis of origin, race, sex, sexual orientation, family circumstances, health, age, disability, lifestyle, political or philosophical opinions, union activities, and actual or presumed membership or nonmembership in a particular ethnic group, nationality, race, or religion. The law also bars unwanted physical, verbal, or nonverbal behavior of a sexual nature.

Article 10a of the Luxembourg Constitution states that “Luxembourgers are equal before the law.” Statutes expressly bar employers from discriminating on the basis of origin, race, sex, sexual orientation, family circumstances, health, age, disability, lifestyle, political or philosophical opinions, union activities, and actual or presumed membership or nonmembership in a particular ethnic group, nationality, race, or religion.

Gender Discrimination

The law bars physical, verbal, or nonverbal behavior of a sexual nature if:

• the offender knows or should know that the behavior affects the dignity of the person who is the object of the conduct;
• the behavior is unwanted, unreasonable, and offensive to that person;
• the employer makes an employment decision based on that person’s submission to or rejection of such behavior; or
• the behavior creates an atmosphere that is intimidating, hostile, degrading, humiliating, or offensive to the person who is the object of the conduct.

The labor code requires employers to ensure equal pay for equal work between men and women. Employers who breach this obligation can incur a fine of between 251 euros and 25,000 euros, which may be doubled if the offense is recommitted within two years.

EU Pay Transparency Directive: As a member state of the European Union, Luxembourg has until June 2026 to transpose the minimum requirements of the EU Pay Transparency Directive into its national law or amend any current pay equity laws to conform with the directive, which aims to promote pay equity between men and women. The directive introduces requirements on gender pay gap reporting, salary history bans during the hiring process, and wage disclosure in job vacancy listings. The national law may go beyond the minimum requirements of the directive, but the law may not directly conflict with the directive requirements.

Reference Citations

Nondiscrimination: Luxembourg Constitution, art. 10

Gender Discrimination: Labor Code, 2006, arts. L. 225-5, L. 245-1 to 245-4 (French)

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: International Privacy Laws.

Luxembourg in 2018 enacted a law that complements the GDPR and revises the provisions of the labor code that govern the monitoring of employees. Employers must give employees advance notice of plans to set up a monitoring system. The notification must include:

• the purpose of the monitoring system,
• the process for implementing the system, and
• the duration and criteria for storing data collected by the storage system.

If employees or their representatives have concerns they can submit them to the National Commission for Data Protection (CNDP) within 15 days of receiving the prior notification.

Employee Monitoring and Surveillance

In principal, the targeted surveillance of specific employees is not allowed.

Employers may monitor employees’ use of electronic communication tools:

• as provided for in the Labor Code, such as to ensure the security and the health of employees, to protect the employer’s property, to control the production process, or for organization of the mobile working schedule;
• if prior notice has been given to employees (for example, by including a company policy in a specific clause in the employment agreement) indicating the purpose of the surveillance and explaining the employee’s related rights; and
• if the Luxembourg National Commission for Data Protection (NCDP) has given its prior authorization.

Before technology that allows the employer to monitor the employee’s electronic communications and Internet use is installed, the Labor Code requires the employer to inform the works council, staff delegation, or the Labor Inspection.

Once notified, the staff delegation has 15 days to raise any concerns with the NCDP. The NCDP then has one month to respond; in the meantime the employer cannot install surveillance equipment. . After receiving employees’ consent, employers must ensure that the monitoring is only used for the purposes for which it was authorized.

Under the GDPR, employers can monitor employees only if there is a lawful basis for doing so. Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures. Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.

Reference Citations

Employee Data: General Data Protection Regulation, 2016; Labor Code, 2006 (French); Protection of Persons with Regard to the Processing of Personal Data, 2007 arts. 26-28; Act of August 1, 2018 Establishing the National Commission for Data Protection and Implementing Regulation 2016/679 of the European Parliament, 2018 (French)

Employee Monitoring and Surveillance: General Data Protection Regulation, 2016 (French); Labor Code, 2006 (French)

Compensation

Hours of Work

The normal workday in Luxembourg is eight hours, the normal workweek 40 hours. Pursuant to a work organization or flextime plan, however, employees may be scheduled to work up to 10 hours per day and 48 hours per week, as long as their average weekly hours during a four-month period do not exceed 40. The four-month reference period may be extended up to 12 months by a collective bargaining agreement or with the permission of the Ministry of Labor and Employment.

Employees who work more than six hours per day are entitled to one or more rest periods, whether paid or unpaid. A workday may include no more than one unpaid rest period.

Employees are entitled to at least 11 consecutive hours of rest in each 24-hour period and to at least 44 hours of consecutive rest in each seven-day period.

Sunday work generally is prohibited by law, subject to numerous exceptions, including senior executives; employees who travel to work outside the business premises; family businesses in which the only workers are close relatives; workers in places where drinks are served, such as hotels, restaurants, and pubs; employees in pharmacies, drugstores, hospitals, and other medical facilities; farmers; workers in places of entertainment; and many others.

Employees who work on Sunday are entitled to a compensatory day off plus 70 percent of their normal hourly rate or can be paid 170 percent of their normal hourly rate. Overtime pay is added to this if applicable. Employees who work four hours or less are entitled to half a day off; employees who work more than four hours are entitled to a full day off. Employees under the age of 18 who work Sundays are entitled to twice their normal hourly rate.

Employees who work on a holiday are entitled to double pay. If a holiday falls on a Sunday or other day off, workers get an additional day off they can use any time within three months.

For work performed between 10 p.m. and 6 a.m., employees are entitled to a 25 percent premium above their normal pay. Young workers are not permitted to perform night work except as part of training in particular types of workplaces, such as hospitals, hotels, the armed forces, and bakeries. Employees cannot work more than an average of eight hours of night work daily over a twenty-four hour period, as calculated over a period of seven days.

Mothers at work are entitled to 90 minutes per day to feed their child for the whole breastfeeding period.

Minimum Wage

There are several levels of minimum wage in Luxembourg: a general minimum wage, a rate for skilled workers set at 120 percent of the general rate and two rates for workers under age 18, set at 80 and 75 percent of the general rate, respectively. Effective Jan. 1, 2023, the minimum wage was 2,864.88 euros per month for skilled workers over 18 years of age and 2,387.40 euros per month for unskilled workers over 18. From April 1, 2022, to Dec. 31, 2022, the minimum wage was 2,776.05 euros per month for skilled workers over 18 years of age and 2,313.38 euros per month for unskilled workers over 18. From Oct. 1, 2021 to March 31, 2022, the monthly minimum wage was 2,708.35 euros for skilled workers over 18 years of age, and 2,256.95 euros per month for unskilled workers over 18.

To be considered a skilled worker, one must have any of the following qualifications:

• a technical and professional proficiency certificate or its equivalent,
• a manual skill certificate plus at least two years of experience in the relevant trade,
• a technical and professional preliminary certificate plus at least five years of experience in the relevant trade, or
• at least 10 years of experience in the trade.

An employer who fails to pay the applicable minimum wage is subject to a fine of 251 euros to 25,000 euros. For a second violation within two years, the maximum fine may be doubled.

Luxembourg adjusts its minimum wage every two years based on fluctuations in average wage levels in the country. In addition, salaries are adjusted in line with the cost of living. When the consumer price index increases or decreases by 2.5 percent during the previous six months, salaries are normally adjusted by the same proportion. In such cases, employers must adjust all wages accordingly.

Overtime

Any hours worked beyond eight hours per day and 40 hours per week are considered overtime. If overtime is worked, the maximum working time cannot exceed 10 hours per day or 48 hours per week.

Overtime work generally is permitted only with prior consent of the Ministry of Labor and Employment and only under exceptional circumstances. No permission is required when overtime is necessary because of accidents or emergencies, as long as such overtime does not exceed three days in a given month.

Employees (other than senior management) who work overtime are entitled to either 140 percent pay or compensatory time off at a rate of 150 percent of the overtime hours worked, and workers under 18 are paid double-time. Pregnant employees may not be required to work overtime and workers under the age of 18 can only be required to work overtime under special circumstances.

Employees who work on a holiday are entitled to double pay. Employees who work on Sunday are entitled to a compensatory day off plus 70 percent of their normal hourly rate or can be paid 170 percent of their normal hourly rate.

For work performed between 10 p.m. and 6 a.m., employees are entitled to a 25 percent premium above their normal pay. Young workers are not permitted to perform night work except as part of training in particular types of workplaces, such as hospitals, hotels, the armed forces and bakeries.

Employees cannot be required to work more than two hours of overtime per day. Special overtime rules apply to the banking, transport and hotel industries.

Wage Payment

The employer must provide the employee with a detailed wage statement each month. The wage statement must state the wage period, the number of hours worked, the applicable pay rate, and any other payments made.

Mandatory Bonuses

There is no statutory requirement that an employer pays its employees bonuses.

Reference Citations

Hours of Work: Labor Code, 2006, art. L. 211-5 to 211-7 (French)

Minimum Wage: Labor Code, 2006, art. L. 222-10 (French)

Overtime: Labor Code, 2006, art. L. 211-21 to 211-24, 231-232 (French)

Wage Payment: Labor Code, 2006, art. L. 221-1 (French)

Benefits

Vacation

Employees who have completed at least three months of uninterrupted service with their employer are entitled to a minimum of 26 days of annual leave with pay. Workers with disabilities, mine workers, and workers whose schedules do not allow them to receive at least 44 hours of continuous rest per week are entitled to additional leave.

Annual leave generally must be taken during the calendar year in which it is earned. If the business needs of the employer have precluded an employee from taking leave during the calendar year, however, the deadline to take annual leave may be extended to March 31 of the following year. Employees need not take the entire 26 days in one increment, but must take at least 12 consecutive working days off at some point during the year.

An employer may deny an employee’s request to take annual leave if the employee had unexcused absences amounting to more than 10 percent of the scheduled work time during the earlier part of the year.

While on leave, employees are not allowed to do paid work for another establishment, and if they do, they can lose their compensation for leave.

Holidays

Employees are entitled to the following 11 national holidays per year with pay:

• New Year’s Day (Jan. 1)
• Easter Monday
• Labor Day (May 1)
• Europe Day
• Ascension
• Whit Monday
• National Day (June 23)
• Assumption (Aug. 15)
• All Saints’ Day (Nov. 1)
• Christmas Day (Dec. 25)
• Boxing Day (Dec. 26)

With permission from an employer, salaried workers are permitted to celebrate a local or business holiday in lieu of an official public holiday. Public holidays that fall on a Sunday are usually observed on the following Monday.

Employees required to work on a public holiday are entitled to additional compensation, depending on the day of the week the employee is required to work and the established regular work schedule. If an employee works on a public holiday on a normal work day, he or she is entitled to regular wages, a 100 percent premium for each hour worked and an extra day of leave.

If hours on a public holiday are categorized as overtime, an employee is entitled to an extra premium of 40 percent or compensatory rest, calculated at 1.5 hours for each hour of overtime work performed. If a public holiday falls on a Sunday, an employee who works on that day is entitled to the normal hourly wage, a 100 percent premium for each hour, an additional 70 percent premium for Sunday work and an extra day of paid leave.

Maternity Leave

To receive maternity leave benefits, the female employee must be a resident of Luxembourg and generally must have worked the six months prior to pregnancy. Pregnant employees are entitled to eight weeks of maternity leave prior to delivery and 12 weeks after delivery. The maternity allowance is paid by the National Healthcare Fund.

At the end of maternity leave, the employee may delay returning to work for one year to take care of her child without subjecting herself to termination indemnities. If she asks to be reemployed during that year, her employer must give her priority in positions for which she is qualified. If she is reemployed, the employer must provide her with the same benefits she received at the time of maternity leave.

The employee continues to accrue annual leave while on maternity leave.

The employee must submit a medical certificate of pregnancy to the employer and to social security authorities no later than 10 weeks before the expected due date.

In addition, each parent is entitled to up to six months of parental leave.

Mothers at work are entitled to 90 minutes per day to feed their child for the whole breastfeeding period.

Paternity Leave

A father is entitled to ten days’ leave with pay for the birth or adoption of a child under the age of 16.

In addition, each parent is entitled to up to six months of parental leave.

Sick Leave

Employees are entitled to paid sick leave from the first day of illness or injury up to a maximum of 78 weeks in a 104-week period. Employers must continue paying employees on sick leave for up to 77 days over a period of 18 months. After this period, the employee receives sickness allowance from the Health Insurance Fund.

The employment contract must be automatically terminated after 78 weeks of paid sick leave over a period of 104 weeks.

Employees must notify the employer on the first day of absence from work due to illness or injury. No later than the third day, the employee must submit a medical certificate confirming the inability to work and stating the expected duration of the absence.

When calculating sick pay, employers must take into account whether the sick employee is in possession of his or her working hours for the month covering the sick leave. Employees who are in possession of their working hours are entitled to their monthly base salary and any supplements which would have been paid during sick leave had they worked as initially planned. Employees who are not in possession of their work schedule are entitled to a payment based on the average daily salary of the last 6 months preceding the first day of sickness.

Other Leave

Adoption leave. Employees are entitled to eight weeks of paid leave when a child younger than 6 years old is adopted, 12 weeks when more than one child is adopted, and two days of paid leave for the adoption of older children through 15 years of age.

Extraordinary leave. Employees are entitled to paid leave for the following:

• enrollment for military service (one day’s leave);
• death of a grandparent, grandchild, brother-in-law, or sister-in-law (one day);
• marriage of a child (one day);
• moving (two days, once ever three years);
• death of a spouse, parent, sibling, child, parent-in-law, son-in-law, or daughter-in-law (five days);
• marriage (three days for the first and one day for the second marriage); and
• adoption of a child under age 16 except when adoption leave has already been provided (two days).

Family leave. Employees are entitled to family leave to take care of a child under the age of 15 who is suffering from a serious illness or injury. Leave is available as follows:

• 12 days for a child during the period between 0 and 4 years,
• 18 days for a child during the period between 4 and 13 years, and
• 5 days for a child hospitalized during the period between 13 and 18 years.

An employee taking family leave must notify the employer on the day of the leave of the necessity of the absence and provide the employer with a medical certificate. The employer is reimbursed for the employee’s absence from work by the Sickness Fund for Private Sector Employees.

Parental leave. Two periods of parental leave (one for each parent) are available to parents of a newborn or newly adopted child. To ensure that both parents can avail of the benefit, one of the parents must take their parental leave immediately after the maternity leave, breastfeeding leave, or adoption leave (which the law refers to as ‘first parental leave’). The other parent can elect to take their parental leave at the same time, or later, but this parental leave (referred to as ‘second parental leave’ by the law) must always begin before the child’s sixth birthday. The age limit is extended to 12 years in the case of an adopted child.

For employees who work full-time, the following four options are available:

• 1)full-time leave for 4 or 6 months;
• 2)half-time leave for 8 or 12 months;
• 3)fractional leave: 4 months taken over a maximum period of 20 months; and
• 4)fractional leave: one day per week for a maximum of 20 months.

For employees who work 20 or more hours per week, only options 1 and 2 are available. For employees who work 10 hours or more or who have an apprenticeship contract, only option 1 is available.

A parental leave plan must be drawn up between the employer and the employee before the period of parental leave. Employers must grant requests for full-time parental leave. However, they can reject requests for part-time or flexible schemes. In this case, the employee must take full-time leave or renounce the leave.

A worker who does not take or is not entitled to the first parental leave and who wishes to leave the second parental leave to the other parent can request unpaid leave of 4 months. The employer must grant this leave and cannot postpone it.

Parental leave is only granted once for the same child. If one of the parents renounces his or her right to parental leave, it cannot be transferred to his or her spouse so that he or she may take two parental leaves. Both parents may take parental leave at the same time.

In order to be eligible for parental leave, the employee must have been continuously employed by the employer for at least 12 months prior to the parental leave.

During paid parental leave, the parent is entitled to a monthly parental leave allowance which replaces the salary and is granted by the Children’s Future Fund. The allowance cannot be less than the minimum wage, and its upper limit is five-thirds times the minimum wage.

At the end of the parental leave period, the employee is entitled to be reinstated into his or her previous position. Employers may not dismiss employees who are on parental leave except in cases of gross misconduct.

Parental leave may be requested whether the child is legitimate, illegitimate, or legitimated.

Support leave. Support leave is available to an employee who wants to spend time with or care for a parent, sibling, spouse or partner who is suffering from a terminal illness. The employee is entitled to five working days a year of support leave, which do not have to be taken together. The employee must notify his or her employer in person or in writing no later than the first day of absence and must present a medical certificate substantiating the relative or partner’s condition.

Sporting Leave. From January 2024, changes to the right to sporting leave will come into effect pursuant to bill of law n°7955. The law expands the right to all athletes registered with an affiliate club in a sports federation, support staff, volunteers and technical and administrative managers appointed by their clubs. Previously, sporting leave was only available to potential Olympic-level athletes and their management and training team.  The law sets out how much leave individuals and sports federations and clubs are entitled to, as well as other limitations.

Pensions and Social Security

Social security benefits, funded by contributions from the employer, employee, and/or the government, include old-age benefits, disability benefits, survivor’s benefits, health insurance, workers’ compensation, unemployment insurance, and family allowance benefits.

• Old-Age Benefits: Retired employees are entitled to receive an old-age pension at age 65 if they have at least 10 years of paid or credited contributions. Employees may retire with an early pension at age 60 or age 57 if they have contributed for at least 40 years. Retirees receive a flat monthly payment based on their years of coverage under the social security system plus a yearly supplement equal to 1.85 percent of adjusted lifetime earnings.
• Disability Benefits: To receive a disability pension, the employee must be under age 65, be unable to perform his or her most recent occupation or any other similar occupation, and have at least 12 months of coverage under the social security system in the three years prior to the onset of disability. The disability pension consists of a flat monthly rate based on years of coverage plus an annual supplement equal to 1.85 percent of adjusted lifetime earnings. If the disability occurred before age 55, additional benefits are paid up to age 55.
• Survivor Benefits: A deceased employee’s survivors are entitled to survivor’s benefits if the employee had at least 12 months of coverage under the social security system in the three years prior to death or was receiving a pension at the time of death. Calculation of the survivor benefit is based on the employee’s actual or theoretical old-age pension at the time of death. The amount of benefits also depends on whether the survivor is an eligible spouse or partner, an eligible divorced spouse or separated partner, or a child of the deceased employee.
• Health Insurance: Health insurance covers employees and their dependents for the cost of medical treatment from the insured’s selected providers, subject to co-payments by the employees.
• Family Allowances: Families with children under age 18 (or under age 27 if the child is disabled or a student) who legally reside in Luxembourg receive a monthly family allowance, paid entirely by the government. The amount of the family allowance is based on the number and age of the children, with a supplemental allowance paid for seriously disabled children. Additional allowances are paid at the birth of a child and at the beginning of each school year. Family allowances are paid by the National Family Benefits Fund.

Workers’ Compensation

Workers’ compensation covers all necessary care resulting from work-related illnesses or injuries. Workers with a temporary disability receive 100 percent of their covered earnings for a total of 52 weeks within a 104 week period. Workers with a permanent disability incapable of any work receive 100 percent of their average monthly earnings in the 12 months before the accident occurred up to the age of 65. Employees receive a reduced amount for partial disability based on the degree of disability. Workers’ compensation also provides for survivor’s benefits and funeral expenses.

Reference Citations

Vacation: Labor Code, 2006, L. 233-2 to 233-15 (French)

Holidays: Labor Code, 2006, L. 232-1 to 232-7 (French)

Maternity Leave: Labor Code, 2006, L. 332-1 to 332-4 (French); New Law on Family Leave, December 13, 2017, art. 9 (French)

Paternity Leave: Labor Code, 2006, L. 233-16, 234-44 (French); New Law on Family Leave, December 13, 2017 (French)

Sick Leave: Labor Code, 2006, L. 232-3, 121-6 (French)

Other Leave: Labor Code, 2006, L. 233-16, 234-43, 234-56, 234-65 (French); Law of November 3, 2016 (French); New Law on Family Leave, December 13, 2017 (French)

Labor Relations

In General

The Luxembourg Constitution expressly guarantees citizens the right to work and to form and join trade unions. Collective bargaining agreements may be entered into between one or more trade unions and an employer, one or more employers’ organizations, or a group of employers in the same line of business that form an economic and social unit. If a trade union seeks to enter into a collective bargaining agreement, the employer is required by law to negotiate. The term of a collective bargaining agreement cannot be less than six months or more than three years.

Labor disputes must be submitted to the National Conciliation Office, and the parties must refrain from strikes or lockouts while the matter is being considered. Labor laws do not otherwise regulate strikes and lockouts but do acknowledge their legality, as have the courts. Strikes are rare, however, and in many years none occurs.

Right to Organize

Article 11 of the Luxembourg Constitution expressly guarantees citizens the right to work and to form and join trade unions.

Under Luxembourg law, collective bargaining agreements may be entered into between one or more trade unions and an employer, one or more employers’ organizations, or a group of employers in the same line of business that form an economic and social unit.

If a trade union seeks to enter into a collective bargaining agreement, the employer is required by law to negotiate. If the employer fails to do so, the matter may be referred to the National Conciliation Office.

The term of a collective bargaining agreement cannot be less than six months or more than three years.

As the agreement approaches expiration, it may be terminated, in whole or in part, upon notice by either party. The requisite notice of termination required under the collective bargaining agreement cannot be more than three months. The parties can decide to renegotiate the agreement in whole or in part and are required to start talks at least six weeks before the expiration of the agreement. When a collective bargaining agreement expires without termination or revision, it is automatically renewed for an open-ended term.

Copies of all collective bargaining agreements must be submitted to the Labor and Mines Inspectorate and must be posted at the main entrance of each workplace.

The government may declare a collective bargaining agreement applicable to all employers and employees in a particular industry.

Most major enterprises in Luxembourg are set up as public limited companies, and Luxembourg law requires employee representation on the boards of some corporations of this type—specifically, those that employ 1,000 or more workers during a three-year period, that have a government contract for the company’s main activity, or in which the government has at least a 25 percent financial holding. In these companies, at least a third of directors on the board must be worker-representative directors elected by the employees by secret ballot.

Works Councils

Employee representative committees must be appointed in all businesses with 15 or more employees. Members of the employee representative committees—the number of members and committees depends on the size and structure of the employer—are elected by secret ballot by the employees for terms of five years.

The purpose of the employee representatives is to act as liaisons between the employees and the employer and in particular to uphold the interests of the employees with respect to working conditions, job security, and equal opportunity. Each employee representative committee must include at least one representative devoted to job safety issues and one to equality issues.

Dispute Resolution

Traditionally, labor disputes have been rare in Luxembourg. Problems typically are resolved through mediation among employers, trade unions, and government at the local or national level.

Individual labor disputes may be filed with the labor courts.

Strikes and Lockouts

Labor disputes must be submitted to the National Conciliation Office and the parties must refrain from strikes or lockouts while the matter is being considered. Labor laws do not regulate strikes and lockouts, but do acknowledge their legality, as have the courts. Strikes are rare, however, and in many years none occurs.

Successorship Clauses

When a business is sold or transferred, in whole or in part, and the transferred portion retains its identity and is able to continue performing its function, duties under the existing employment contracts are transferred to the new owner.

Reference Citations

Right to Organize: Luxembourg Constitution, art. 11

Works Councils: Labor Code, 2006, art. L. 422-1 to 422-5 (French)

Strikes and Lockouts: Labor Code, 2006, art. L. 211-27, 232-8 (French)

Successorship Clauses: Labor Code, 2006, art. L. 127-3 (French)

Safety, Health and Security

In General

Employers must ensure that employees receive adequate instruction in health and safety in the workplace and must appoint one or more employees to advise the company on preventing avoidable risks and protecting employees from unavoidable risks.

Every employer is required either to establish its own health service for employees, to join other companies in setting up a multi-employer health service or to use the national health service.

Luxembourg law provides for periodic safety checks of businesses in which significant dangers or risks are present. Such safety checks are performed by the Labor and Mines Inspectorate or by the mayor’s office in the locality where the business is located.

Right to Disconnect. The Law of June 28, 2023 Luxembourg amended their Labour Code in order to introduce a provision on the right to be disconnected. Employers must set up systems to allow their employees to be disconnected from work responsibilities and devices outside of work hours. Employers who do not develop such a program may be subject to an administrative fine of between EUR 251 and EUR 25,000.

Workplace Safety and Health

Employers must ensure that employees receive adequate instruction in health and safety in the workplace and must appoint one or more employees to advise the company on preventing avoidable risks and protecting employees from unavoidable risks.

Luxembourg law provides for periodic safety checks of businesses in which significant dangers or risks are present. Such safety checks are performed by the Labor and Mines Inspectorate or by the mayor’s office in the locality where the business is located.

Every employer is required either to establish its own health service for employees, to join other companies in setting up a multi-employer health service, or to use the national health service.

The health service must conduct a medical examination of every new employee. For employees working in dangerous positions, the medical examination must be completed before the employee begins work. All other employees must complete a medical examination within two months of beginning work.

Employees who are exposed to radiation or a significant risk of other occupational disease must undergo periodic medical examinations.

Drug and Alcohol Use

Under Luxembourg law, employers must take all reasonable steps to protect employees from second-hand smoke. In addition, smoking is barred in restaurants and cafes (although, depending on the size of the establishment, separate smoking rooms may be permitted), as well as in schools, public buildings, buses, and trains, among other places.

Reference Citations

Workplace Safety and Health: Labor Code, 2006, art. L. 312-1 (French)

Termination

Termination by Employer

During the first two weeks of the probationary period, the employment contract may not be terminated except for gross misconduct. After this, the employment contract may be terminated by either party upon notice to the other. No reason need be given.

If the probationary period is expressed in weeks, at least one day’s notice of termination must be given for each week of the probationary period. If the probationary period is expressed in months, at least four days’ notice of termination must be given for each month of the probationary period subject to a minimum notice period of 15 days and a maximum of one month.

After completion of the probationary period, the amount of notice of termination required depends on the reason for termination, the size of the employer, and the employee’s years of service. In all cases, an employer must notify the employee of termination in writing, either by registered letter or by obtaining the employee’s signature on the termination letter.

Whistleblowing. On May 17, 2023, the Luxembourg law transposing EU Directive on Whistleblowing went into effect. Employers with more than 50 workers must establish whistleblower policies and reporting mechanisms for suspected wrongdoings within the company. However, financial-sector entities are required to comply regardless of the number of employees. The law expands legal protections for whistleblowers and the scope of protected individuals. Employers with whistleblower procedures currently in place must ensure those procedures comply with the act. Persons who retaliate against whistleblowers can receive a fine of up to 25,000 euros.

Termination for Gross Misconduct. In cases of gross misconduct, the termination letter must state what the employee did to warrant dismissal. No notice period is required if the employer has fewer than 150 employees.

In these situations, the employer first must schedule a preliminary interview with the employee and notify the employee of the right to be assisted at the interview by another employee or union representative. Notice of termination must be provided between one and eight days after the scheduled interview date, whether or not the employee chooses to attend the interview.

Gross misconduct is defined as conduct that makes it impossible to continue the working relationship, such as repeated unjustified absences, insubordination, theft, falsification of records, refusal to comply with security rules, competing with the employer, or committing violent acts in the workplace.

The employer may not rely on gross misconduct as a reason for termination if it has known of the facts constituting the misconduct for more than 30 days. The 30-day time limit does not apply if criminal charges have been filed or if termination is based on both new and old incidents.

Termination for Reasons Other Than Gross Misconduct. If an employee is terminated for reasons other than gross misconduct, the amount of required notice depends on the employee’s years of service. For employees with fewer than five years of service, at least two months’ notice must be provided. For employees with five to 10 years of service, at least four months’ notice is required. For employees with more than 10 years’ service, at least six months’ notice must be provided. The notice period takes effect on the first or the 15th of the month unless the parties agree otherwise. The employer may choose to pay the employees’ wages and benefits in lieu of permitting the employee to work out the notice period.

If the employer fails to give the requisite notice, the employee is entitled to compensation in the amount of the wages due during the applicable notice period.

As in cases of gross misconduct, an employer with 150 or more employees must schedule a preliminary interview with the employee before providing notice of termination.

When an employee has been terminated for reasons other than gross misconduct, the employer is not required to provide written reasons for termination unless the employee requests them within one month of the date of the termination letter. If such a request is made, the employer must reply within one month.

The employer’s freedom to terminate certain categories of employees is limited:

• New employees may not be terminated during the first two weeks of their probationary period except in cases of gross misconduct.
• Employees with fixed-term contracts may not be terminated prior to the end of the contract except if gross misconduct is involved.
• Employees on sick leave may not be terminated during the first 26 weeks of leave, provided the employee notifies the employer of the illness or injury on the first day of absence from work and provides a medical certificate by the end of the third day of absence. This is true even if the employer has grounds to dismiss the employee for gross misconduct, although the employer can dismiss the worker if the incapacity was caused by the intentional commission of a crime.
• Employees may not be terminated during pregnancy or during the first 12 weeks after giving birth except for gross misconduct.
• Employees who have requested parental leave may not be terminated during leave except for gross misconduct.
• Employee representatives may not be terminated during their term of office or within six months after expiration of their term of office and candidates for election to the position of employee representative may not be terminated for three months after announcement of their candidacy. In cases of gross misconduct, however, the employer may suspend the candidate or representative without pay and file a petition with a labor court seeking judicial termination of the employment contract.
• Employees who are members of the joint works council may be terminated only with permission of the joint works council or if the employer files a petition with a labor court seeking judicial termination of the employment contract. This restriction also applies to former members for the six months after their term ends and to candidates for a council in the three months after their nomination. Where gross misconduct is involved, however, such employees may be suspended with pay pending the court’s decision.

Termination is considered to be unfair if it is based on unlawful reasons or cannot be justified on grounds of the employee’s skills or conduct or the legitimate business needs of the employer. If a person files a wrongful termination complaint with a labor court, the employer has the burden of demonstrating that the reasons stated to the employee as grounds for termination are justified. If the employee failed to ask the employer for a statement of the reasons for termination within a month of being dismissed, however, the employee has the burden of demonstrating that dismissal was unfair.

If a judge finds a dismissal to be unfair, the employer will be required to compensate the employee for any economic or other loss suffered as a result of the termination. The court can also recommend that the employer reinstate the employee. The employer is not required to do this but can be required in this situation to pay the worker an extra month’s salary in addition to other awards for damages.

Termination by Employee

An employee who wishes to resign must submit notice either by registered letter or by obtaining the employer’s signature on the letter of resignation. Unless the employer agrees to a different period, an employee must provide at least one month’s notice of resignation if the employee has fewer than five years of service, two months’ if five to 10 years of service, and three months’ for 10 or more years of service. Notice is effective on either the first or the 15th of the month.

Plant Closings and Mass Layoffs

Before making collective dismissals, the employer must enter into negotiations with employee representatives, the joint works council and any appropriate trade union to explore the possibility of avoiding or reducing the number of layoffs and to draft a planned redundancy scheme. The negotiations must include discussion of methods to mitigate the impact of the layoffs by providing for reemployment and/or retraining of terminated employees or by providing financial compensation.

Before the talks begin, the employer is required to provide employee representatives and the Employment Administration with a written statement containing:

• the reasons for the proposed dismissals,
• the number and categories of workers to be terminated,
• the number and categories of workers normally employed,
• the time period during which the terminations are proposed to occur,
• the criteria for selecting the workers to be terminated, and
• any proposed termination payment or the reasons for not making such payment.

If the parties come to an agreement within 15 days, they must submit it immediately to the Employment Administration.

If the parties fail to reach an agreement within 15 days, they must file with the Employment Administration the minutes of their meetings, a report explaining why an agreement was not reached, and a summary of the parties’ positions on each issue. No later than three days after submitting the minutes and report, the parties must jointly refer the matter to the National Conciliation Office, which will schedule a meeting to prepare an official report for the Employment Administration and the Labor and Mines Inspectorate.

Any notice of dismissal issued before the National Conciliation Office signs the minutes is null and void.

Employees must be given at least 75 days’ notice of a collective dismissal.

Payment on Termination

An employee with at least five years of service who is terminated for any reason other than gross misconduct is entitled to severance pay (also known as a departure allowance). The amount of severance pay depends on the number of years of service and ranges from one month’s pay for employees with five to 10 years of service to a year’s pay for employees with 30 years or more of service. Severance pay is exempt from tax provided it does not exceed 12 times the monthly minimum wage for unqualified workers.

Any employee who leaves employment is entitled to pay for annual leave earned but not yet taken during that calendar year. Employees are considered to have earned one-twelfth of annual leave for every month worked. Employees who worked more than 15 calendar days in a given month are considered to have worked the entire month for purposes of calculating unused annual leave.

Unemployment Insurance

To receive unemployment benefits, the employee must have worked at least 26 weeks in the preceding 12 months and be unemployed for reasons other than termination for gross misconduct, leaving a job voluntarily, or refusing an offer of suitable employment. The employee also must register with a public employment office and be willing and able to accept an appropriate job offer. Unemployment benefits are paid for up to 365 days in a 24-month period and may be extended under certain circumstances for older unemployed persons and persons who are difficult to place in a new job. The amount of the unemployment benefit is 80 percent of the insured’s average earnings—85 percent if the person has a dependent child—up to a maximum of 2.5 times the minimum wage for the first 182 days, twice the minimum wage after 182 days, and 1.5 times the minimum wage after 365 days. A person under age 18 who qualifies for unemployment receives 70 percent of the minimum wage.

Reference Citations

Termination by Employer: Labor Code, 2006, art. L. 124-1 to 124-11 (French)

Plant Closings and Mass Layoffs: Labor Code, 2006, art. L. 166-1 to 166-6 (French)

Payment on Termination: Labor Code, 2006, art. L. 124-7 (French)

Personal Taxes

Residency Requirements

Resident employees are subject to income tax on both domestic and foreign income, nonresidents only on domestic income. Employees are considered to be resident in Luxembourg if they have their domicile or habitual place of residence in the country. A person who resides in Luxembourg for more than six consecutive months is considered to have a habitual residence there.

Taxable Income

Taxable income includes all monetary and nonmonetary benefits provided by the employer, including salaries, wages, bonuses, royalties, subsistence allowances, unemployment benefits, sickness and maternity benefits paid in lieu of salary and employer-provided pensions. Overtime pay, however, is generally exempt from income tax and social security deductions.

Tax Rates

Personal income tax rates are progressive, ranging from 8 percent to 42 percent. Employees are also responsible for social security contributions in the following percentages: 3.05 percent for health insurance, 8 percent for pension, and 1.4 percent for long term care insurance.

Effective for 2020, employers were assessed a pension tax of 8 percent, a sickness insurance tax of 3.05 percent that consists of a health care component of 2.8 percent and a cash benefits component of 0.25 percent, a standard accident insurance tax of 0.75 percent, with possible tax rates ranging from 0.675 percent to 1.125 percent, and a Multisectoral Occupational Health Service funding tax of 0.11 percent.

The filing date for personal income tax is March 31.

Reference Citations

Residency Requirements: Law on Income Tax of December 4, 1967 (French)

Taxable Income: Law on Income Tax of December 4, 1967 (French)

Web References

In English unless otherwise noted.

Law and Regulation

Luxembourg Constitution

Luxembourg Labor Code (French)

Government Websites and Publications

Luxembourg Government Website

Luxembourg Ministry of Labor and Employment (French)

Luxembourg Statistics Portal