Short-time working due to cyclical economic difficulties

MyGuichet.lu

Large businesses

SMEs

In order to protect jobs and thus prevent redundancies, Luxembourg labour law allows businesses to use various short-time working schemes (chômage partiel) depending on the nature of the difficulties encountered and subject to certain conditions.

The short-time working scheme in the event of cyclical economic difficulties is intended to support businesses belonging to a crisis-stricken sector or economic branch and encountering cyclical economic difficulties. Currently, only manufacturing companies can benefit from this type of short-time working scheme.

Any business making use of short-time working due to cyclical economic difficulties undertakes not to make employees redundant for economic reasons.

During the short-time working period, the State reimburses the business 80 % of the salaries normally received by the employees during the non-work periods. Reimbursement is limited to 250 % of the social minimum wage. The business still has to pay social security contributions and salaries in respect of hours worked.

Who is concerned

Organisations/businesses concerned by the short-time working scheme due to cyclical economic difficulties

This scheme is aimed at businesses belonging to a sector or an economic branch declared to be in crisis by the government.

Eligible employees

Short-time working due to cyclical economic difficulties can be applied to all employees with their place of work in Luxembourg, employed under a permanent or fixed-term employment contract, and who

are not covered by a certificate of incapacity for work; and
do no longer have any work to do or can no longer be occupied on a full-time basis when the company can no longer ensure the normal operation of its activity.

Short-time working schemes cannot be applied to apprentices, to temporary workers or workers having tendered/received their notice.

Sectors officially declared to be in crisis

The Economic Committee (Comité de conjoncture) evaluates whether or not a given sector is in crisis upon each application for short-time working due to cyclical economic difficulties.

After analysing the sector concerned, the Economic Committee proposes, where appropriate, that the government declare the entire sector in which the business operates as a sector in crisis. Only after the decision of the Government council can the business benefit from short-time working due to cyclical economic difficulties.

Any business in the sector that satisfies the requirements below then becomes eligible.

The economic sector of a company is determined by its NACE code.

To avoid exposing Luxembourg businesses to a loss of confidence on the part of their suppliers and creditors, the list of sectors in crisis is not published.

In order to not distort competition, short-time work due to cyclical economic difficulties cannot be applied in highly-competitive sectors.

Prerequisites

To apply for short-time working due to cyclical economic difficulties, the business must:

be established in Luxembourg;
hold, where applicable, a business permit granted by the competent authority;
belong to a sector declared to be in crisis by the government;
not be suffering from structural difficulties;
undertake to not make any employee redundant for economic reasons.

Short-time working due to cyclical economic difficulties comes within the scope of complementary job protection measures which, if the company's economic situation so requires, can be combined and/or applied simultaneously.

Preliminary steps

Before submitting an application via MyGuichet.lu, the employer is required to confirm, by means of the declaration provided for this purpose for businesses with or without staff delegation, that the employees respectively the staff delegation, and, where applicable, the trade unions (in the event of a collective agreement) have been informed of the application for short-time working.

Deadlines

Short-time working applications must be submitted at the latest by the 12th day of the month preceding the requested short-time working period (for example, before 12 March for a short-time working application relating to the month of April 2021).

Applications cannot be submitted outside these dates. Short-time work benefits can never be granted retroactively.

How to proceed

Filing an application

Regardless of the situation that applies to the business, the employer, or their representative (e.g. a fiduciary), must submit the application to benefit from the short-time working scheme electronically using their business eSpace on the MyGuichet.lu platform. The person submitting the application needs:

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

How to use MyGuichet.lu

There are 3 possible scenarios:

The person submitting the application is a new user on MyGuichet.lu and does not yet have an eSpace:

The creation of the eSpace is done in 2 steps:
1. registration of a user;
2. creation of a business eSpace.

A tutorial in video or PDF format is available to guide you.

The person submitting the application is a user of MyGuichet.lu and already has a private eSpace: he or she will have to create a new business eSpace.

A tutorial in video or pdf format is available to guide you.

The person submitting the application already has a business eSpace for the company: the existing business eSpace can be used.

Consult the help section on MyGuichet.lu.

This online application tool was developed by the Ministry of the Economy and ADEM, with the support of the Government IT Centre (CTIE). Each request will be treated confidentially.

All requests made through any other communication channel will not be considered and will not be processed.

Admissibility of the application

The Economic Committee assesses the application for short-time work and submits a written opinion to the Government Council (Conseil de Gouvernement) who will decide whether or not to allow short-time work.

The Economic Committee sends an information email to the company informing it that the acceptance or refusal letter can be consulted in their eSpace on MyGuichet.lu.

If the application is approved, the company is authorised to resort to short-time working.

The business must nevertheless renew its application each month and inform the secretariat of the Economic Committee of any change in the situation.

It must be noted that the reduction in working hours covered by the short-time working scheme cannot exceed 1,022 hours per calendar year per full-time employee. For persons working on a part-time basis, the limit of 1,022 hours are prorated.

Validity period

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

Amount of allowance

The payment of short-time working benefits is made on the basis of a statement.

During the period of short-time work, the State will reimburse the employer the compensatory benefit paid up to the amount of 80 or 90 % of the employee's normal hourly salary (provided the employee participates in continuing vocational training programmes during the hours off work).

The reimbursement is limited to 250 % of the social minimum wage for unskilled workers aged 18 or over. However, if this calculation indicates that the compensatory allowance ends up being lower than the social minimum wage for unskilled workers, the social minimum wage will be used instead.

Submitting the statement

Businesses must complete the 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 concerned will need to be filled in. ADEM will receive the other necessary data from the Joint Social Security Centre (CCSS).

The statement, together with the individual monthly statements (individual forms), must be submitted to ADEM, on pain of debarment, within 2 months of the month short-time working occurred.

Sanctions

All subsidies granted on the basis of deliberate misrepresentations will have to be repaid.

Subsidies granted on the basis of deliberate misrepresentations and as soon as there is deliberate failure to pay the compensatory allowance to one or more employees concerned or if the subsidies were used to other ends than the payment of salaries must be paid back. The beneficiary must reimburse the totality of the amounts received on the basis of all applications submitted and the benefits of short-time working will be withdrawn with immediate effect from the business concerned.

These offences are punishable by a fine of between EUR 251 and EUR 5,000.