Overview of Luxembourg Labor Law and Employment Policies

Employment Law Overview

• Key Legislation:
  • Luxembourg Labor Code
  • Social Security Law
  • Tax Law
• Legal Characteristics:
  • Aims to protect employee rights and promote workplace fairness
  • Sets standards for minimum wage, working hours, vacation, sick leave, and severance pay

Employment Contract Requirements

• Contract Types:
  • Fixed-term contracts
  • Indefinite-term contracts
• Contractual Provisions:
  • Must include job description, compensation, working hours, vacation, termination terms, etc.
• Language and Currency:
  • Contracts must be in an official Luxembourg language (Luxembourgish, German, French)
  • Currency is the Euro

Working Time Regulations

• Standard Working Hours: 40 hours per week
• Rest Days and Breaks:
  • Minimum of 24 hours of rest per week
  • 15-minute break after 6 hours of work per day

Vacation Policy

• Annual Leave: 26 days of paid annual leave per year
• Public Holidays: 11 statutory public holidays
• Special Leave:
  • Sick leave: Up to 26 weeks of paid sick leave
  • Maternity leave: 20 weeks of paid maternity leave
  • Paternity leave: 10 days of paid paternity leave
  • Parental leave: 4-12 months of unpaid parental leave, depending on contract type and working hours

Employee Dismissal and Contract Termination

• Notice Periods:
  • Indefinite-term contracts: 2-6 months
  • Fixed-term contracts: Based on contract duration
• Severance Pay:
  • Service of 5+ years: 1-12 months of salary
• Unfair Dismissal Protection:
  • Employers must prove fair reason for dismissal, or employees may be entitled to compensation

Tax Law

• Personal Income Tax:

  • Salary Range (EUR)	Tax Rate
    0 - 20,000	0%
    20,001 - 38,700	10%
    38,701 - 58,000	15%
    58,001 - 77,400	20%
    77,401 - 96,700	25%
    96,701 - 116,000	30%
    116,001 - 135,000	35%
    135,001 - 155,000	40%
    205,000+	45%

• Social Security Contributions:

  • Employer: 12.47%
  • Employee: 8%

Health Insurance

• Insurance Policy:
  • Employees must participate in the national health insurance scheme
• Coverage:
  • Basic healthcare services, including medical, dental, and vision

Compensation and Benefits

• Minimum Wage:
  • Age 18+: EUR 2,776.05 per month
• Compensation Structure:
  • Base salary, bonuses, allowances, etc.

Work Permits and Visas

• Permit Requirements:
  • Non-EU/EEA citizens require a work permit
• Application Process:
  • Employer applies for work permit with Luxembourg Immigration Office
  • Employee applies for visa with Luxembourg consulate

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Confidentiality and non-compete clauses are enforceable in Luxembourg
• Common Provisions:
  • Restrict employees from using or disclosing employer's confidential information after leaving employment
  • Restrict employees from working for competitors after leaving employment

Training and Development

• Legal Requirements:
  • Employers must provide safety training and opportunities for skill development
• Government Support:
  • Government provides funding and incentives to support employee training

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibits discrimination based on factors such as race, gender, religion
• Enforcement Measures:
  • Employers must establish policies and procedures to ensure workplace diversity and inclusion

Remote Work Policy

• Legal Framework:
  • Luxembourg does not have specific remote work legislation
• Tax and Insurance Implications:
  • Remote work may impact employee's tax and social security obligations

Authoritative Website Addresses

• Luxembourg Ministry of Labor: https://www.gouvernement.lu/en/topics/ministry-of-labour-employment-and-social-and-solidarity-economy/index.html