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
The scheme for short-time working due to structural economic problems is aimed at businesses facing structural difficulties.
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.
Short-time working schemes cannot be applied to apprentices, totemporary workers or workers having tendered/received their notice.
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.
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.
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
Submitting the application
The form must be duly signed by the business manager and by the staff delegation. By signing the form, the staff delegation acknowledges that the business manager has received and informed the delegation about the application for short-time work.
If the company has less than 15 employees or does not have a staff delegation, each employee concerned must sign the form individually.
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.
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 amounting 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 payslips 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.
Forms / Online services
Who to contact
Employer Services – Department for Third-Country Workers19, rue de Bitbourg
Phone : (+352) 247-88000Fax : (+352) 247-90410
Occupational Counselling and Redeployment Panel1, boulevard Porte de France
Phone : (+352) 247 - 88888Fax : (+352) 26 19 08 22
Head Office in Luxembourg City10, rue Bender
Fax : (+352) 40 61 40
Vocational Guidance Department58, boulevard Grande-Duchesse Charlotte, Place de l’Etoile / Stäreplaz
Phone : (+352) 247-854 80Fax : (+352) 40 61 39Mon.-Fri. from 8.00 to 12.00 and from 13.00 to 17.00
Financial Management of Support Measures - Young Persons10, rue Bender
Fax : (+352) 29 65 90
Department for Workers with Reduced Working Capacity19, rue de Bitburg
Phone : (+352) 247-88000Fax : (+352) 247-85402
Disability and Redeployment department19, rue de Bitbourg
Phone : (+352) 247-88 888 (job seekers) or 247-88 000 (employer)Fax : (+ 352) 247-26 19 08 22