Parties are free to negotiate the employee’s basic salary, but they must respect the minimum social wage, which applies to all employees in Luxembourg. The applicable minimum wage varies according to the professional qualification of the employee and according to an index. Luxembourg’s minimum wage increased by 1.1% at the start of 2019. The minimum wage of €2,071.07, however, rises by 20% for those classed as ‘skilled workers’ and decreases by 20–25% for those classed as adolescent workers. This means a skilled worker aged 18 or older must be paid 20% more than the standard minimum wage, totaling €2,485.29. Workers aged 17 or 18 face a 20% deduction from the standard rate and must be paid at least €1,656.86, while those aged 15 to 17 face a 25% deduction and a minimum wage of €1,553.30.
Even workers who earn above the minimum wage are affected by the national indexation of salaries, a barometer on which employers must adjust the wages they pay in line with the cost of living in Luxembourg. If the consumer price index rises or falls by 2.5% during a period, salaries in Luxembourg must be adjusted by this percentage. Salaries are paid on a monthly basis, generally at the end of the month. Even if it is not required for the employer, it is common to provide the employee with benefits in addition to the basic salary such as luncheon vouchers or additional health insurance. These benefits could depend on the employee’s position.
Maximum Working Week
Standard working time is limited to 8 hours per day and 40 hours per week, excluding higher-ranking employees (senior executives). A working day may never exceed 10 working hours and a working week may never exceed 48 hours. A rest period of 11 hours every 24 hours and of 44 hours for every 7-day period must be respected. Collective bargaining agreements may provide for other (longer) breaks.
The reform introduced by the law of 23rd December 2016 on the organisation of working time introduced new rules on working time flexibility. It reformed, among other things, the existing mechanism of using a reference period, which allows the distribution of working hours over several days without them becoming overtime hours. Flexibility can be achieved either through (i) a POT (Plan d’Organisation du Travail) or (ii) a flexible work schedule (Règlement d’horaire mobile).
In Luxembourg, overtime is strictly regulated by law and is only permitted with a prior authorisation from or a notification to the Minister of Employment. Where permitted, overtime is limited to two working hours per day and within the limit of 48 hours per week. For any overtime worked, employees are entitled to compensation in salary or free time. Sunday work is generally prohibited, but employees who work on a Sunday are entitled to a special compensatory rest of either half a day or an entire day and a 70% premium on the normal rate of pay. Night work must be compensated with a salary supplement of 15 %, according to the law, where a collective bargaining agreement applies and in the HORECA sector.
Employer’s Obligation to Provide a Healthy and Safe Workplace
The Labour Code places an obligation on the employer to evaluate and identify the risks that exist in his/her company and then an obligation to avoid the risks, otherwise, if this is not possible, he/she must tackle them by taking into account advancements and choosing the least dangerous options.