Employment law in Luxembourg
Employment law in Luxembourg is primarily governed by the Labor Code (Code du Travail), which sets the basic framework for employment relationships. Luxembourg has a comprehensive system of employment rights, offering strong protections for employees. The law is supplemented by collective bargaining agreements, EU regulations, and various sector-specific laws. Below is an overview of key aspects of employment law in Luxembourg:
1. Employment Contracts
Written and Oral Contracts: Employment contracts in Luxembourg can be written or oral, but it is highly recommended to have a written contract for clarity and legal certainty. Written contracts are required for certain employment situations, such as fixed-term contracts.
Key Terms: An employment contract should include key terms like:
Job description and duties.
Salary, bonuses, and benefits.
Working hours.
Duration of employment (for fixed-term contracts).
Notice period for termination.
Types of Employment Contracts:
Fixed-Term Contracts: These contracts are valid for a specific duration or project and automatically terminate at the end of the agreed period unless renewed.
Indefinite-Term Contracts: The most common type of employment, this contract has no end date and is considered permanent unless terminated by either the employer or employee.
Temporary Employment: Luxembourg law also regulates temporary or agency work, where employees are hired by staffing agencies for short-term assignments.
2. Wages and Salary
Minimum Wage: Luxembourg has a national minimum wage, which is revised periodically. As of 2025, the minimum wage is set at:
€2,308.32 per month for an unskilled worker (the "basic" minimum wage).
€2,885.40 per month for a skilled worker.
The minimum wage is increased annually, reflecting inflation and other economic factors. Minimum wages are adjusted based on the employee's age and qualifications.
Payment of Wages: Wages are usually paid monthly by bank transfer unless otherwise agreed upon. Employers are obligated to provide a pay slip detailing the breakdown of wages and any deductions.
3. Working Hours and Overtime
Standard Working Hours: The typical workweek in Luxembourg is 40 hours, usually spread over 5 days, with 8 hours per day. This may vary for certain sectors and through individual agreements.
Overtime: Overtime work is generally compensated at a higher rate, typically:
1.25 times the normal rate for work beyond regular hours on weekdays.
1.5 times the normal rate for work on weekends or public holidays.
Rest Periods: Employees must be granted at least a 30-minute break after 6 hours of continuous work.
4. Annual Leave and Public Holidays
Annual Leave: Employees are entitled to minimum 26 days of paid annual leave. For employees who work less than a full year, the leave is calculated on a pro-rata basis.
Public Holidays: Luxembourg recognizes several statutory public holidays, including:
New Year's Day (January 1)
Labor Day (May 1)
National Day (June 23)
Christmas Day (December 25)
Easter Monday, Ascension Day, Whit Monday, and others. Employees are generally entitled to paid leave on public holidays. If an employee works on a public holiday, they are usually entitled to extra pay.
5. Sick Leave
Sick Leave: Employees in Luxembourg are entitled to paid sick leave. After an employee has worked for 3 months, they are entitled to full salary for the first 26 weeks of illness. After 26 weeks, they may be eligible for disability benefits.
Medical Certificate: Employees must provide a medical certificate to qualify for sick leave.
Short-Term Sick Leave: For shorter periods of illness, employees are entitled to sick leave paid by the employer, and the employer can claim reimbursement from the National Health Fund (CNS) after 7 days of illness.
6. Maternity and Paternity Leave
Maternity Leave: Female employees are entitled to 20 weeks of maternity leave. The leave is divided into:
8 weeks before childbirth.
12 weeks after childbirth.
Maternity leave is paid at 100% of the employee's salary, and the employer is reimbursed by the Caisse Nationale de Santé (CNS).
Paternity Leave: As of January 1, 2021, fathers are entitled to 10 days of paternity leave following the birth of their child. The leave is paid at 100% of the employee’s salary and is covered by the CNS.
7. Termination of Employment
Notice Period: The required notice period depends on the length of employment:
Less than 5 years: 2 weeks notice.
5 to 10 years: 1 month notice.
More than 10 years: 2 months notice. Employees and employers can agree to a longer notice period, but this must be stipulated in the contract.
Dismissal: Employers can terminate employees, but the reasons for dismissal must be fair and justifiable (e.g., misconduct, poor performance, redundancy). Dismissal must comply with due process and be in accordance with the law.
Severance Pay: If the employer terminates an employee’s contract, the employee may be entitled to severance pay. This depends on the employee's length of service and the terms of the contract.
8. Social Security and Benefits
Social Security: Luxembourg has a comprehensive social security system, which includes:
Health insurance: Funded by contributions from both employees and employers.
Pension system: Employees contribute to the Caisse Nationale d'Assurance Pension for old-age benefits.
Unemployment benefits: Employees who lose their jobs may be eligible for unemployment benefits under certain conditions.
Employee Contributions: Employees contribute a percentage of their gross salary to the social security system, which is matched by their employer.
Unemployment Insurance: Workers who have contributed to the social security system and have been employed for a certain period are entitled to unemployment benefits. The benefits typically amount to 80% of the employee's average salary, subject to caps and conditions.
9. Discrimination and Harassment
Non-Discrimination: Luxembourg’s labor laws prohibit discrimination in employment based on characteristics such as:
Gender, age, race, disability, sexual orientation, religion, and political beliefs.
Sexual Harassment: Sexual harassment is illegal, and employees are entitled to a safe and respectful workplace. Employers are required to take measures to prevent and address harassment.
Equal Pay: Luxembourg mandates equal pay for equal work, and there are strong legal frameworks in place to ensure that men and women are compensated fairly.
10. Health and Safety
Workplace Safety: Employers are required by law to provide a safe working environment. The Occupational Health and Safety Act requires employers to protect the health, safety, and welfare of their employees.
Workplace Risk Assessment: Employers must conduct regular risk assessments and take measures to address hazards, especially in high-risk sectors.
Reporting Accidents: Work-related accidents must be reported to the Social Security Fund (CNS), and employees who are injured at work may be entitled to compensation for medical expenses and lost income.
11. Labor Disputes and Resolution
Dispute Resolution: In the event of a dispute between an employer and employee, both parties are encouraged to attempt to resolve the issue through dialogue or mediation. If a resolution is not reached, the dispute may be brought before the Labor Court.
Collective Bargaining: Luxembourg has a strong system of collective bargaining, where trade unions negotiate with employers on behalf of employees, particularly regarding wages, benefits, and working conditions.
Labor Unions: Workers are allowed to join trade unions, which play an important role in negotiating labor agreements and protecting employees' rights.
12. Labor Unions and Collective Bargaining
Labor Unions: Employees in Luxembourg have the right to join trade unions, which represent their interests in negotiations with employers. Luxembourg has a high unionization rate, and trade unions are active in ensuring workers' rights are upheld.
Collective Bargaining: Unionized employees can engage in collective bargaining to improve working conditions and terms of employment. Many sectors in Luxembourg have sector-specific collective agreements that set minimum standards for wages, benefits, and working conditions.
Conclusion
Luxembourg’s labor laws provide extensive protections for workers, covering wages, working hours, leave, health and safety, termination, and discrimination. The legal framework ensures that employees are treated fairly and provides avenues for resolving disputes. Luxembourg's strong social security system, coupled with its policies on workplace equality and employee welfare, makes it an attractive place to work, especially for EU nationals.
RELATED Blog
0 comments