Country Information

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.

Employment Contracts

Written employment contracts are preferred 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. The 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 identity of the parties
  • The workplace
  • The terms of 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)
  • The date of commencement (and end date if applicable)The length of the notice period to terminate the contract
  • If applicable, information about any supplementary pension scheme and any collective agreement that applies to the contract
Working Hours

The standard workweek 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 certain categories of employees, most notably executives and senior management personnel who play a vital role in ensuring the proper operation of the business where they work. 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 who work on a Sunday must either be paid at 170% of their standard rate or receive compensatory time off (half a day off if the employee worked up to four hours on a Sunday, a full day off if more than four hours) and, in addition to the compensatory time off, be paid 70% of the standard rate for the Sunday hours. Employees who work on public holidays are entitled to pay (sometimes with a premium) and compensatory time off according to one of several formulas depending on the exact circumstances. The premium share of overtime or Sunday pay is tax-exempt and not subject to social security contributions.

Sick Leave

Employees in Luxembourg are entitled to paid sick leave. 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. Depending on the employer’s practice, the employee may be asked to provide the certificate on the first or second 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 which 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.

Maternity/Paternity Leave

Female employees receive 20 weeks of paid maternity leave, 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.

Immediately following the end of the maternity leave, one parent may take a parental leave of four to six months, or eight to 12 months during which the parent works 50% of their normal hours. This is referred to as “first parental leave,” and it is only available immediately after the end of maternity leave. The other parent may take “second parental leave” of the same length at any other time until the child is six years old. Employees may not be dismissed during maternity or parental leave.

Maternity benefits are paid by a national health insurance fund and, for working mothers, are usually the highest salary received during the three months before the beginning of the maternity leave. Fathers receive 10 days of paid paternity leave following the birth of a child. 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 days of adoption leave. However, if the child(ren) is/are adopted by a married couple, only one spouse may take this leave. The other is eligible for a special 10-day leave.


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,” which is typically paid near the end of the year and is usually one-half of a month’s salary.

Vacation Leave

Employees who have worked for their employer for three months receive 26 days of paid leave annually. Certain categories, including disabled workers and miners, 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.

Public Holidays

Luxembourg observes the following public holidays:

  • New Year’s Day
  • Easter Monday
  • Labor Day/May Day
  • Europe Day
  • Ascension Day
  • Whit Monday
  • National Day
  • Assumption
  • All Saints’ Day
  • Christmas Day
  • St. Stephen’s Day
Health Insurance Benefits

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.

Employment / Termination / Severance

Generally, an employer in Luxembourg may dismiss employees either for personal reasons (such as poor performance) or because of the needs of the business, such as a restructuring which requires the elimination of 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. Employers with 150 employees or more must hold a pre-dismissal interview with employees whom they intend to dismiss.

The employee is informed of the employer’s intent, given the reason for the dismissal, and provided an opportunity to respond. 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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