Short-time working due to structural economic difficulties

MyGuichet.lu

Large businesses

SMEs

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

The partial unemployment scheme in the event of structural economic difficulties is intended to support businesses that are experiencing difficulties of a structural nature and/or are forced to lay off staff for economic reasons but wish to qualify for short-time working benefits.

Resorting to short-time working for structural reasons falls within the set up of a job protection plan, or a recovery plan, depending on the size of the business:

a recovery plan, for small businesses employing less than 15 persons;
a job protection plan, by industry sector where applicable, in conformity with the provisions in articles L.513-1 and thereafter of the Labour Code, for businesses employing more than 15 persons.

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 structural economic difficulties

The scheme for short-time working due to structural economic problems is aimed at businesses facing structural difficulties.

Eligible employees

The short-time working scheme due to structural economic difficulties can be applied to employees (on permanent and fixed-term contracts) whose place of work is in Luxembourg 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.

Prerequisites

To apply for short-time work due to structural economic difficulties, the business must:

be established in Luxembourg;
hold, where applicable, a business permit granted by the competent authority; and
be faced with problems of a structural economic nature (i.e. related to the legal, social, tax or commercial organisation of the business).

Preliminary steps

Before submitting an application for short-time working due to structural economic difficulties via MyGuichet.lu:

the employer is obliged to confirm, by means of the declaration provided for this purpose for businesses with or without a staff delegation, that the employees respectively the staff delegation and, where applicable, the trade union organisations (in the case of a collective agreement) have been informed of the request for short-time working;
the business must draw up a job protection or recovery plan, which must include specific commitments that the business plans to implement within an agreed time schedule.

Deadlines

Short-time working applications must be submitted at the latest by the 12^th day of the month preceding the requested short-time working period (for example, before 12 March 2021 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

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 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.

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 e-mail 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 and per full-time employee. For persons working on a part-time basis, the limit of 1,022 hours are pro-rated.

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.