Business MyGuichet.lu

Procedures for short-time working related to the economic recovery

Coronavirus / Covid-19

With the end of the state of crisis and in order to revive the economy, new procedures for granting short-time work to companies affected by the COVID-19 crisis will be in force from July to 31 December 2020.

The company, or its representative (e.g. a fiduciary), are required to submit the application using the electronic form in their business eSpace on MyGuichet.lu.

The person submitting the application needs:

  • a LuxTrust product (e.g. Token, Smartcard or Signing stick); or
  • an electronic identity card.

The time limits for submitting the applications for short-time working related to the economic recovery are as follows:

  • for August 2020: from 1 to 12 July 2020 inclusive;
  • for the months of September to December inclusive: no later than the 12th day of the month preceding the period of short-time working requested. For example, the application must be submitted by 12 August at the latest for short-time work during the month of September.
Under no circumstances can short-time working be granted retroactively.

Furthermore, since 18 June 2020, the hotline 8002-9191 has been operating every working day between 8.00 and 17.00 to answer questions on applications for short-time working related to the economic recovery.

Frequently asked questions on short-time working

 

Hotline short-time working

 

In case of questions concerning the applications for short-time working:
  • Ministry of the Economy – Economic Committee: phone: 8002 9191
     

In case of questions concerning the statement and the reimbursement:

  • ADEM – Job Protection Department: phone: 247-88000
Where to apply for the short-time working scheme?

The employer, or their representative (e.g. a fiduciary), must submit the application to benefit from the short-time working scheme electronically through their business eSpace on the MyGuichet.lu platform.

The person submitting the application must have a LuxTrust product (e.g. Token, Smartcard or Signing stick) or an electronic identity card (eID). All applications made through any other communication channel (mail, fax, email) are not accepted and will not be processed.

Is there a deadline for applying?

From August until the end of 2020, applications for short-time working must be sent at the latest on the 12th day of the month preceding the period of short-time working requested (for example, at the latest on 12 September for the application for short-time working in October).

Applications cannot be made outside these dates and under no circumstances can short-time working be granted retroactively.

Businesses must renew their application each month by logging back into the MyGuichet.lu assistant

Must the entire company staff be on short-time working or only part of the staff?

The short-time working scheme only applies to employees who are obliged to reduce their work partially or to stop it completely when the company can no longer ensure the normal operation of its activity.

The company can therefore decide to put only part of the staff of a department or service on short-time work. 

Is there a limit to the number of employees that can be put on short-time work?

Yes, the number of employees benefiting from the short-time working scheme may not exceed 25 % of the total workforce (as at 30 June 2020) for the months of July and August, 20 % of the total workforce for the months of September and October and 15 % for the months of November and December 2020.

These limits do not apply to industrial businesses, to businesses in vulnerable sectors (HORECA, tourism and events sectors) and to businesses in the financial and insurance sector.

How to round off the maximum limit of employees who can benefit from short-time working in the case of a decimal number?

As far as businesses in other economic sectors are concerned, the number of employees benefiting from short-time working must respect the limits mentioned in the previous question. When the limit is a decimal number, the business may round up the number to the nearest whole number, regardless of the size of the business.

Example:

  • for a business in the above-mentioned sector employing 21 employees in August 2020, the limit of 25 % will result in 5.25 employees (21*0.25) which will be rounded up to 6 employees;
  • for a business in the above-mentioned sector employing 2 employees in September 2020, the limit of 20 % will result in 0.4 employees (2*0.20) which will be rounded up to 1 employee.
How to round off the maximum limit of employees made redundant for economic reasons in the case of a decimal number?

For businesses in vulnerable sectors, when the maximum limit of redundancies for economic reasons of 25 % of employees (in relation to the total workforce as of 30 June 2020) is a decimal number, the business may round up this number to the nearest whole number, regardless of the size of the business.

Example:

  • for a business in the above-mentioned sector employing 21 employees on 30 June 2020, the 25 % limit will result in 5.25 employees (21*0.25) which will be rounded up to 6 employees;
  • for a business in the above-mentioned sector employing 2 employees on 30 June 2020, the 25 % limit will result in 0.5 employees (2*0.25) which will be rounded up to 1 employee.
Does an employee have to be on short-time work for the whole month?

No. An employee can also be on short-time work for part of the month only.

Can the employee alternate a period of actual work (whether on site or teleworking) with a period of short-time working?

Yes. As long as the company has not completely stopped its activity but is facing a decrease in its activities due to the coronavirus, it is possible to have an employee working full or half-time or for certain hours only, whether on site or teleworking.

However, only the days, half days or hours that are not worked will be covered by the short-time working scheme. On the other hand, periods of actual work (on site or teleworking) are not covered by short-time working.

Can an employee with a fixed-term contract benefit from short-time working?

Yes. The benefit will nevertheless be limited to the duration of the current contract in force and will not apply to a possible renewal of a fixed-term contract, nor to new contracts concluded during the period of short-time working.

On the other hand, a fixed-term contract that is immediately followed by a permanent contract makes the employee eligible for short-time working.

Can the employee benefit from short-time working if the employment contract was concluded before the occurrence of the short-time working period but the contract only takes effect after the short-time working period has begun?

Yes, they can benefit from short-time working as soon as the employment contract takes effect.

Can an employee who has just recovered from a period of sick leave benefit from short-time working?

Yes, if the company and the employee meet the other conditions for short-time working.

Can an employee who has just come off parental leave benefit from short-time working?

Yes, if the company and the employee meet the other conditions for short-time working.

Can an apprentice benefit from short-time working?

With the end of the state of crisis, apprentices can no longer be placed on short-time work.

Can an apprentice benefit from short-time working if their apprenticeship contract expires during the period of short-time working but the apprentice is then hired by their training company under a permanent employment contract?

Yes. An apprentice (initial or adult apprenticeship) whose apprenticeship contract expires during the period of health crisis and who is hired on a permanent contract by their training company can benefit from short-time working after the apprenticeship contract has ended.

How is the compensatory benefit for short-time work that the employer must pay to the employee calculated?

The rate of the legal compensatory benefit is set at 80 % of the employee's normal gross hourly wage, without, however, exceeding the amount of 250 % of the hourly social minimum wage for unskilled workers over the age of 18 (currently EUR 5,354.98 on a monthly basis at the index 834.76).

By normal hourly wage, the following is meant and to be counted separately:

  1. the highest base salary which was used as an assessment base during one of the 3 calendar months preceding the beginning of the period of short-time working;
  2. the average amount of the complementary and accessory benefits included in the assessment base during the 12 calendar months preceding the month prior to the period of short-time working.

Definition: The complementary and accessory benefits that form part of the assessment base for the compensatory benefit, are all the elements of remuneration that are payable each month in cash, with the exception of overtime pay and the increases provided for by contractual, legal or regulatory provisions.

If this reference period is not fully covered by an activity subject to insurance, the average is calculated on the basis of the calendar months with full coverage.

In the absence of a single fully covered month, the basic salary as well as the complementary and accessory benefits are taken into account according to their value agreed in the employment contract.

If the above calculation shows that the compensatory benefit is actually lower than the social minimum wage for unskilled workers, then the latter shall be taken into account (since 18 March 2020 - date of the beginning of the state of crisis) and must continue to be until 31 December 2020; it will be reimbursed by the Employment Fund.

Important: Employers are always required to pay the salaries within the legal time limits, regardless of the date of reimbursement paid by ADEM.

The compensatory benefit reimbursed by ADEM to companies can only be used to pay the salaries and under no circumstances to pay other costs.

How is the compensatory benefit for short-time work calculated?

The amount of the compensatory benefit for short-time work is calculated on the basis of a statement. After the end of the month in which short-time working occurs, businesses must complete an online procedure on MyGuichet.lu so that ADEM can draw up a statement.

The declarant also has the possibility of downloading an XML list before starting the procedure on MyGuichet.lu.

In practice, for each month of short-time working, the employer or their representative receives an email/mail from ADEM inviting them to fill in the online form.

On this form, only the names and national identification numbers of the employees and/or apprentices concerned will need to be filled in. ADEM will receive the other necessary data from the Joint Social Security Centre (CCSS).

What is the level of reimbursement to which the employer is entitled for the compensatory benefit paid during short-time working?

The legal compensatory benefit advanced by the employer is reimbursed by the Employment Fund. Unlike the schemes for involuntary layoff due to bad weather or involuntary and temporary layoff, the first 16 hours are also reimbursed by the Employment Fund.

Reimbursement is limited to the legal benefit to which the employee affected by short-time working is entitled, which is limited to 250 % of the hourly social minimum wage payable to an unskilled worker over the age of 18 (currently EUR 5,354.98 on a monthly basis at the index 834.76).

If the rate of the social minimum wage for unskilled workers replaces the compensatory benefit, any difference between the amount of the compensatory benefit and the social minimum wage for unskilled workers is reimbursed to the employer by the Employment Fund during the period from 18 March 2020 (the beginning of the state of crisis) until 31 December 2020.

The compensatory benefit is subject to social and tax contributions generally provided for in respect of salaries, with the exception, however, of accident insurance contributions and contributions due in respect of family benefits.

The employers' share of social security contributions remain at the expense of the employer. This also applies to the difference between the amount of the compensatory benefit and the social minimum wage for unskilled workers. The employer's contributions will not be reimbursed.

Can an employee who should be covered by the short-time working scheme be granted leave for family reasons?

No, short-time working takes precedence over leave for family reasons.

Since the salaried worker who is affected by short-time working is in principle released from work, they are available to care for a dependent child without having to resort to leave for family reasons.

For this reason it goes without saying that the salaried worker on short-time work is not entitled to leave for family reasons.

Can a self-employed or freelance worker benefit from short-time working?

No, but where applicable, the employees in their employ are eligible.

In the context of the end of the Covid-19 crisis, the Ministry of Economy has set up a certain number of financial aids in favour of small companies and self-employed people.

Can employees on short-time work participate in vocational training programmes?

Yes, if the employee participates in continuing vocational training programmes during the hours off work, the compensatory benefit corresponds to at least 90 % of the salary normally received in the case of short-time working due to structural or cyclical economic problems as well as in the case of short-time working due to economic dependence.

Is there a maximum limit to the coverage for short-time working?

Yes, the reduction in working hours covered by the short-time working scheme can currently not exceed 1,022 hours per calendar year per full-time employee. For employees working part-time, the 1,022 hours are prorated.

However, the hours of short-time work used during the period from 1 January 2020 to 31 July 2020 are not counted against the maximum working time reduction of 1,022 hours.

Can an employee posted abroad benefit from short-time working?

Yes, employees who are affiliated to the Luxembourg social security system can benefit from short-time working if they are employed by a company legally established in Luxembourg and if their normal place of work is in Luxembourg.

Can an employee posted from abroad to a Luxembourg company benefit from short-time working?

No. As this person is not insured as an employee with the Luxembourg social security bodies, they do not meet the conditions for benefiting from the short-time working scheme.

Which employees are eligible for the new short-time working scheme?

The short-time working scheme due to structural economic problems can be applied to all employees whose place of work is located in Luxembourg, whether they are on permanent or fixed-term contracts. Short-time working is not applicable to apprentices, trainees or employees on notice of dismissal.

Employees who have been dismissed before the occurrence of short-time working and whose notice period falls during the period of short-time working are not entitled to short-time working. Thus, the employer must continue to pay 100 % of the salary and will not be reimbursed by the state.

Dismissal during the period of short-time working is only possible for personal reasons. In this case, the employee in question is no longer eligible for short-time working. The employer must continue to pay 100 % of the salary and will not receive any reimbursement.

It should be noted that temporary workers may be eligible for short-time working on behalf of their employer, i.e. the temporary employment agency.

Please note: Employees who receive an old-age pension, an early old-age pension or a disability pension are not eligible for short-time working.

Are jobseekers hired under a CIE, CAE or CRE contract eligible for short-time working?

CIEs, CAEs and CREs do not fall under the short-time working scheme.

Can a foreign company with salaried workers who are affiliated to the CCSS in Luxembourg benefit from short-time working?

Only companies that are legally established in the Grand Duchy of Luxembourg can benefit from short-time working. These companies therefore require a physical address in Luxembourg. The compensatory benefit for short-time working is only reimbursed for employees who:

  •  are legally employed with a company legally established in the Grand Duchy of Luxembourg;
     and
  •  are normally employed at a place of work located in the Grand Duchy of Luxembourg;
    and
  • are insured as employees with Luxembourg social security bodies.

The Law of 2 September 2011 (Art. 5) regulating access to the professions of craftsman, trader, industrialist and certain liberal professions, defines the criteria for establishment in Luxembourg.

Can employees on parental leave benefit from short-time working?

Many companies think that employees on parental leave cannot benefit from short-time working.

However, this only applies to those who are on full-time parental leave; those on part-time or split parental leave can benefit from the short-time working scheme during the working hours that should have been worked.

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