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The official name of Luxembourg is the Grand Duchy of Luxembourg. It is a landlocked country located in the western region of Europe. German, French and Luxembourgish are the three officially recognized languages in Luxembourg. Historically, the economy has centered around the industrial sector. The tiny country offers political and economic stability, and a strategic location for businesses in Europe.

Written employment contracts are used in Luxembourg, with both the employer and employee receiving a signed copy. Permanent contracts are preferred, but fixed-term arrangements are possible if there is a specific business need. A fixed-term contract may be renewed, but no more than twice and the maximum length, including renewals, is 24 months. Seasonal work, replacement positions, and short-term jobs are among the most common fixed-term situations.

An employment contract must include:

  • the identities of the parties,

  • the workplace,

  • the probationary period if there is one,

  • the employee’s duties,

  • annual leave,

  • address of employee and of the employer’s registered office,

  • salary details,

  • benefits to the employee,

  • the employee’s usual working hours,

  • renewal of contract (if applicable),

  • commencement date and end date, if applicable,

  • termination notice period, and

  • if applicable, information about any supplementary pension scheme and any collective agreement that applies to the contract.

The standard workweek in Luxembourg is eight hours per day across five days. The workweek is capped at 48 hours and employees may not work longer than 10 hours in one day. Working on Sunday is prohibited, with exceptions for certain jobs and tasks that cannot be carried out any other times. These limits do not apply to some employees, including executives and senior management personnel. Employees who work at night (10 p.m. to 6 a.m.) are entitled to a premium.

Employees must be paid an overtime rate of at least 140% of the standard rate for every hour worked beyond 40 hours per week.

Employees are entitled to paid sick leave in Luxembourg. The employee must inform the employer on the first day of absence and, if the sick leave will last longer than two days, must provide a medical certificate no later than the third day. Employees hospitalized because of an emergency have eight days to provide the medical certificate. An employee who follows these procedures may not be dismissed (including for misconduct that occurred prior to the sick leave) or called for a preliminary hearing in view of dismissal for 26 weeks from the first day of the sick leave.

The employer pays an employee on sick leave full salary and any other compensation the employee normally receives up until the end of the month in which the 77th day of illness occurs. Beginning the following month, the employee receives a benefit payment from the National Health Fund (Caisse Nationale de Santé) (CNS) and the employer is not responsible for paying the employee until they return to work.

Female employees receive 20 weeks of paid maternity leave in Luxembourg, beginning eight weeks before the due date and continuing for 12 weeks after the birth. To be eligible for this leave, the employee must have been affiliated with the sickness and maternity insurance fund for a minimum of six months during the 12 months prior to the maternity leave. She must also furnish her employer with a medical certificate stating the estimated delivery date. Maternity benefits are paid by a national health insurance fund at the highest salary received during the three months before the beginning of the maternity leave.

Fathers receive 10 days of paid paternity leave in Luxembourg. The father must provide the employer with two months of advance notice and take the leave within two months of the birth. Employees who adopt a child receive 12 weeks of adoption leave. If the child is adopted by a married couple, only one spouse may take this leave. The other is eligible for a special 10-day leave.

Luxembourg has four minimum wage rates, which are based on the employee's age and whether they are a skilled or unskilled worker. Bonuses are not required but are common. Many employers pay their employees a 13th month salary as a bonus, and some even a 14th month, typically paid near the end of the year.

Employees receive 26 days of paid annual leave in Luxembourg. Some employees receive extra annual leave. A worker also receives an additional day off if, over a period of eight weeks, the worker does not receive a rest period of 44 continuous hours each week.

In Luxembourg, the public holidays are:

  • New Year’s Day

  • Easter Monday

  • Labor Day/May Day

  • Europe Day

  • Ascension Day

  • Whit Monday

  • National Day

  • Assumption of Mary

  • All Saints’ Day

  • Christmas Day

  • St. Stephen’s Day

Luxembourg has national healthcare, and everyone employed in Luxembourg must belong to one of several insurance funds, depending on the person’s occupation. Most people in Luxembourg buy private supplemental insurance to cover costs that are not paid by the national healthcare system.

An employer in Luxembourg may dismiss employees either for personal reasons, such as poor performance, or for the needs of the business, such as a restructuring which eliminates jobs. An employer must give notice when terminating an employee on a permanent contract, unless the employee has engaged in serious misconduct, for which special procedures apply. The notice period is between two and six months. Severance must be paid to employees with at least five years of service. Severance is from one to 18 months of salary, depending on the employee's length of service and the size of the employer.

An employee on a fixed-term contract may not be terminated outside of the trial period except by mutual agreement, or in cases where there has been serious misconduct by the employee. An employee on a permanent contract in Luxembourg who wishes to quit must give notice to the employer, except in the case of serious misconduct by the employer, in which case no notice is required.

  • Local Laws & Regulations

    We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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