Short-time working due to structural economic problems
With respect to short-time working due to structural economic problems and for the duration of the state of crisis, the time limit for submitting the monthly claim declaration has been extended from 2 months to 3 months following each inactive month. Moreover, the claim declaration must be countersigned by the staff delegation, if any.
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 short-time working scheme due to structural economic problems is intended to support business encountering structural difficulties.
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
Eligible businesses
The scheme for short-time working due to structural economic problems is aimed at businesses facing structural difficulties.
Eligible employees
Short-time working due to structural economic problems can apply to all employees with their place of work in Luxembourg, whether they are under a permanent employment contract or a fixed-term employment contract.
Special case
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 problems, the business must:
- be established in Luxembourg;
- hold, where applicable, a business permit granted by the competent authority;
- be faced with problems of a structural economic nature (i.e. related to the legal, social, tax or commercial organisation of the business).
Short-time work due to structural economic problems generally comes under the scope of a job protection plan, alongside other measures which, if the company's economic situation so requires, can be combined and/or applied simultaneously.
Preliminary steps
Before applying for short-time working due to structural economic problems, the business must:
- contact the secretariat of the Economic Committee (Comité de conjoncture) to check that the problems encountered are recognised as being of a structural economic nature;
- design a recovery plan at the request of the secretariat.
The recovery plan must include precise commitments that the business intends to undertake according to an agreed timetable.
Before applying for short-time work, the business manager must inform and consult with the staff delegation (délégation du personnel) and the trade unions until the next social elections in the case of businesses bound by a collective agreement.
Deadlines
Short-time working applications must be submitted by the 12th day of the month preceding the requested short-time working period (for example, before 12 September for a short-time working application relating to the month of October).
Short-time work benefits can never be granted retroactively.
How to proceed
Initial application
Filing an application
Businesses have to submit their application for short-time work to the secretariat of the Economic Committee (Comité de conjoncture). Each application will be treated with complete confidentiality.
A new form is being developed for applications for short-time working for the month of July. It will normally be available on MyGuichet.lu around 20 June 2020.
Documents to be submitted with the application
The initial application must be accompanied by the following documents:
- the annual financial statements for the last 3 financial years;
- proof of payment of social security contributions;
- a recovery or job-protection plan.
Admissibility of the application
The Economic Committee analyses the balance sheet and the financial situation of the business as well as the planned restructuring measures.
It then submits a written opinion to the Government Council (Conseil de Gouvernement) who will decide whether or not to allow short-time work.
After the decision taken by the Government Council, the Economic Committee will send the decision by post and by fax to the number indicated in the application. No information will be provided by telephone.
If the application is approved, the business is authorised to resort to short-time work in addition to the measures implemented by the restructuring plan.
The business must nevertheless renew its application each month and inform the secretariat of the Economic Committee of any change in the situation.
Monthly renewal
For subsequent applications after the initial application, the business has to:
- submit the duly-signed application for short-time work before the 12th of each month;
- indicate any changes in comparison with previous months (e.g. number of employees impacted).
Maximum period of short-time working per employee
The permission to make use of the provisions concerning short-time working due to structural economic problems can only be granted for a maximum of 1,022 hours per year and per full-time working employee. For persons working on a part-time basis, the limit of 1,022 hours are pro-rated.
Payment of salaries and social contributions by the employer
During the period of short-time work, the employer pays each employee:
- the salary due for every hour worked;
- and a compensatory allowance corresponding to:
- at least 80 % of the normal salary for inactive hours;
- at least 90 % of the normal salary if the worker has participated in continuous vocational training during inactive hours.
Employers also have to continue to pay the following to the competent public administrations:
- social contributions (the employer's and the employee's share) and withholding tax on salaries paid for hours worked;
- and also social contributions (the employer's and the employee's share) and withholding tax on the compensatory allowance paid for inactive hours, with the exception of the following employer's contributions:
- accident insurance contributions;
- and family benefits.
Reimbursement of the compensatory allowances paid by the State
Within 2 months of each month under short-time work, the employer must send the ADEM a monthly declaration of claim, the individual statements signed by the employees concerned by the short-time working and a statement of the amounts to the ADEM.
The State then reimburses the employer the compensatory allowance (80 % or 90 % of the gross salary) normally received by each employee for the inactive hours up to a maximum of 250 % of the social minimum wage (the balance of the salary remains payable by the employer).
Availability of the worker and return to work
Employees are not required to stay at work during inactive hours.
However, they need to remain at the employer's disposal who may, at any time, call the employees back to work in the event of a pick-up of activity.
Who to contact
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Ministry of the Economy - Economic Committee19-21, boulevard Royal
L-2914 Luxembourg
Luxembourg
Fax : (+352) 46 04 48
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National Employment Agency (ADEM)
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Occupational Counselling and Redeployment Panel19, rue de Bitbourg
L-1273 Luxembourg-Hamm
Luxembourg
Postal address :
B.P. 2208, L-1022 Luxembourg
Phone : (+352) 247 - 88000 -
Department for Workers with Reduced Working Capacity19, rue de Bitburg
L-1273 Luxembourg
Luxembourg
Phone : (+352) 247 - 88000Fax : (+352) 247 - 85402 -
Disability and Redeployment Department19, rue de Bitbourg
L-1273 Luxembourg
Luxembourg
Postal address :
B.P. 2208 L-1022 Luxembourg
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Head Office in Luxembourg City19, rue de Bitbourg
L-1273 Luxembourg
Luxembourg
Postal address :
B.P. 2208 L-1022 Luxembourg
Phone : (+352) 247 - 88000 -
Career Guidance - Luxembourg City - Maison de l'orientation (Educational and Vocational Guidance Centre)12-14, avenue Émile Reuter
L-2420 Luxembourg
Luxembourg
Postal address :
B.P. 19 L-2010 Luxembourg
Phone : (+352) 247 - 85480Fax : (+352) 40 61 39Mon.-Fri. 8.00 - 12.00 and 13.00 - 17.00 -
Diekirch Agency2, rue de Clairefontaine
L-9220 Diekirch
Luxembourg
Postal address :
B.P. 7 L-9201 Diekirch
Phone : (+352) 247 - 88000Fax : (+352) 80 26 3508.30 - 11.30 and 14.00 - 17.00 -
Career Guidance - Diekirch - Maison de l'orientation (Educational and Vocational Guidance Centre)7, avenue de la Gare
L-9233 Diekirch
Luxembourg
Postal address :
B.P. 7 L-9201 Diekirch
-
Differdange Agency23, Grand-rue
L-4575 Differdange
Luxembourg
Postal address :
B.P. 5 L-4501 Differdange
Phone : (+352) 247 - 88000Fax : (+352) 247 - 7535108.30 - 11.30 and 14.00 - 17.00 -
Dudelange Agency56, rue du Parc
L-3542 Dudelange
Luxembourg
Phone : (+352) 247 - 88000Fax : (+352) 247 - 75 47108.30 - 11.30 and 14.00 - 17.00 -
Esch-sur-Alzette Agency1, boulevard Porte de France
L-4360 Esch-sur-Alzette
Luxembourg
Postal address :
B.P. 289 L-4003 Esch-sur-Alzette
Phone : (+352) 247 - 88000Fax : (+352) 54 10 5808.30 - 11.30 and 14.00 - 17.00 -
Wasserbillig Agency44, esplanade de la Moselle
L-6637 Wasserbillig
Luxembourg
Postal address :
B.P. 38 L-6601 Wasserbillig
Phone : (+352) 247 - 88000Fax : (+352) 247 - 7539108.30 - 11.30 and 14.00 - 17.00 -
Wiltz Agency20, rue Winseler
L-9577 Wiltz
Luxembourg
Postal address :
B.P. 57 L-9501 Wiltz
Phone : (+352) 247 - 88000Fax : (+352) 95 86 1108.30 - 11.30 and 14.00 - 17.00 -
Financial Management of Support Measures - Young Persons10, rue Bender
L-1229 Luxembourg
Luxembourg
Postal address :
B.P. 2208 L-1022 Luxembourg
Fax : (+352) 29 65 90 -
Employer Services – Department for Third-Country Workers19, rue de Bitbourg
L-1273 Luxembourg-Hamm
Luxembourg
Phone : (+352) 247 - 88000Fax : (+352) 247 - 90410 -
Job Protection Department1, boulevard Porte de France
L-4360 Esch-sur-Alzette
Luxembourg
Postal address :
B.P. 289 L-4003 Esch-sur-Alzette
Phone : (+352) 247-88000Fax : (+352) 40 59 88