Schools and higher education establishments are increasingly incorporating work placements (internships) in their educational programmes. These are compulsory internships that are part of the establishments' educational programmes. These internships give pupils or students an opportunity to:

• experience and learn about the world of work; and
• gain their first professional experience.

Furthermore, a pupil or student may wish to undertake an optional or voluntary internship with the aim of gaining work experience in a particular field.

All internships are subject to an internship agreement.

Moreover, for these 2 types of internships, clear guidelines exist regarding:

• the compensation of interns;
  
• the duration of the internship;
  
• the content of the internship agreement.

Who is concerned

Persons concerned

The internship agreement is signed by:

• the training supervisor (that is, the head of the host company or their representative);
  
• the intern or their legal representative, if they are a minor;
  
• where applicable, the tutor (i.e. the teacher at the pupil's/student's school or higher education establishment, who will be following the pupil's/student's progress throughout the internship).

Internships concerned

Two types of internships are concerned, namely:

• internships organised by a Luxembourg or foreign educational institution: these are compulsory internships. They form an integral part of the intern's training and are based on the Luxembourg or foreign education establishment's programme of study, more particularly internships required as part of a Bachelor's or Master's degree programme; and
  
• voluntary practical internships to acquire work experience, undertaken by:
  • pupils or students who:
    • are enrolled in an educational institution in Luxembourg or abroad; and
      
    • regularly follow an education programme;
  • persons who:
    • hold a secondary school graduation diploma or equivalent; or
      
    • have successfully completed a first cycle of higher or university education (e.g. a Bachelor).

In these last 2 cases, the internship must begin and end within the 12 months that follow the end of the most recent school enrolment period in which the intern earned one of the aforementioned diplomas.

Excluded internships

Certain compulsory internships are excluded, namely, those undertaken as part of:

• a person's professional development training, that is, all internships undertaken with the aim of obtaining:
  
  • a vocational aptitude diploma (diplôme d'aptitude professionnelle - DAP);
  • a technician's diploma (diplôme de technicien - DT);
  • an advanced technician's certificate (brevet de technicien supérieur – BTS) in cross-border apprenticeships;
• educational or career guidance;
• specific training in order to enter a profession governed by legal or regulatory provisions (e.g. physician, lawyer, schoolteacher, etc.).

How to proceed

Signature of an internship agreement

Employers who wish to hire an intern must sign an internship agreement, regardless of the type of internship.

The internship agreement must be signed by:

• the training supervisor;
• the intern or their legal representative, if they are a minor;
• where applicable, the educational institution in the case of compulsory internships undertaken as part of the academic programme.

The internship agreement must specify:

• the tasks assigned to the intern;
• the start and end dates of the internship;
• the intern's maximum number of weekly working hours;
• the procedures for authorising absences, especially to attend job interviews;
• the intern's compensation, if applicable;
• the appointment of a mentor;
• any benefits the intern may be entitled to;
• the social protection scheme under which the intern is covered, especially with regard to accident insurance;
• the terms and conditions for terminating the internship agreement, either unilaterally or by mutual consent, before the end of the internship.

Remuneration and withholding tax

Duration of the internship

The intern's remuneration depends on the duration of the internship. The remuneration scale is as follows:

• for compulsory or optional internships that are less than 4 weeks long: compensation is optional;
• for compulsory internships that are 4 or more weeks long: 30 % of the social minimum wage for unskilled workers;
• for practical training:
  • between 4 and 12 weeks long, inclusive: 40 % of the social minimum wage for unskilled workers;
  • between 12 weeks and one day and 26 weeks long, inclusive: 75 % of the social minimum wage for unskilled workers.

For part-time internships, the maximum duration is calculated in hours and compensation is prorated.

Exemption from compensation

For compulsory internships, the training supervisor is not required to compensate the intern if the educational institution:

• expressly prohibits compensation in the internship agreement; and
• requires compliance with this prohibition as a condition for recognition of the internship.

In this case, the pupil or student must send the internship agreement to the Ministry responsible for labour affairs, by post or by email to info@mte.public.lu, before the start of the internship. If the conditions are met, the ministry will issue a certificate to the pupil or student. This certificate serves to exempt the training supervisor from the obligation to compensate the intern.

Withholding tax

For resident interns undertaking practical training, the employer is required to apply the withholding tax on the remuneration paid. Under certain conditions, the intern has the option of adjusting their tax situation at the end of the year by completing an annual adjustment form (or a tax return).

The compensation paid during the internship period is exempt from the withholding tax for:

• resident interns undertaking a compulsory internship;
• non-resident interns undertaking an optional or compulsory internship.

To this end, where the intern's remuneration is concerned, the employer must file an application for exemption from withholding tax with the competent RTS tax office. The application must be submitted on plain paper, along with:

• a copy of the intern's ID card or passport;
• the intern's address, and;
• depending on the case, a copy of the school certificate, or written confirmation from the educational institution that the internship is being undertaken as part of the academic programme.

If the employer does not apply for the exemption, the intern also has the option, under certain conditions, of adjusting their tax situation at the end of the year by completing an annual adjustment form (or a tax return).

The rate which applies to an annual income (internship remuneration, occasional remuneration of students, salaries, etc.) which is below the vital minimum is zero.

Registration with Social Security

Principle

The employer must register the intern for coverage under the general accident insurance scheme, unless the intern is already covered by their parents' or educational institution's insurance.

The employer must therefore file a declaration of start of employment with the Joint Social Security Centre (Centre commun de la sécurité sociale – CCSS).

The calculation basis for social security contributions is the social minimum wage for unskilled workers.

Interns residing abroad

Interns who are domiciled abroad are generally protected under the social security system in their country of origin. Therefore, in principle, the Luxembourg employer does not need to file a declaration of start of employment for the intern with the Joint Social Security Centre.

The employer must ascertain that the intern is duly covered against accident risk. To do so, the employer may:

• refer to the internship contract provided by the foreign educational institution; or
  
• ask the intern to request a certificate from the competent administrative authority in their country of origin, confirming their accident insurance.

For interns who are not covered against work-related accidents in their country of residence, employers must therefore register the intern by filing a declaration of start of employment with the Joint Social Security Centre.

Mentor

The training supervisor assigns each intern a mentor, who is responsible for:

• assisting the intern with their integration in the host company;
• supervising the intern on an ongoing basis;
• answering the intern's questions;
• advising and guiding the intern;
• issuing a detailed critical assessment at the end of the internship in the case of internships that are at least 4 weeks long.

Limitations

The number of persons permitted to undertake practical training in a business may not exceed 10 % of the business's total headcount.

In businesses with fewer than 10 employees, the maximum is one internship.

Obligations

Throughout the internship period, the employer may not assign the intern any tasks that require a work output comparable to that of the employer's permanent employees. Internships are designed essentially to provide interns with career-related information and guidance.

Employers may not use interns:

• as replacements for permanent jobs;
• to replace an employee who is temporarily absent;
• to handle temporary increases in the business's workload.

The training supervisor must keep a record of internships that:

• may be viewed at any time by the staff delegation;
• must be made accessible to the Inspectorate of Labour and Mines (Inspection du travail et des mines – ITM) upon request.

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