Luxembourg

Employment

The employment contract must be written, it must include job requirements, benefits and responsibilities of the employee.

Payroll

Salaries are paid weekly or monthly depending on the company.

HR & Labor

Working Hours: Full time employment is considered 40 hours per week. Overtime work is allowed only up to 48 hours per week. Employer must compensate employee’s overtime pay.
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Employee is entitled to 44 hours of break per week and if they don’t get these hours, they receive 6 additional vacation days per year. Minimum Working Age: There is no official minimum working age, however employees under the age of 18 cannot work full time.

Immigration

Employees from EU/EEA must let their new municipality know about their arrival within the first 8 days. Afterwards they have 90 days to register and receive a certificate of residence - they need valid documents including a promise of employment letter from the employer.
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Employees from outside of EU/EEA countries must submit an application to the Immigration Directorate to receive a temporary visa to enter Luxembourg, upon their arrival they must register with the new municipality within three days, also go through medical exams after which they can receive a residence permit within three month of entering Luxembourg.

Minimum Wage

Minimum wage is 1,922 EUR per month.

Pension Fund

Employer contributes 8% of the employee’s wages.

Employee contributes 8% of their wages. Contribution ceiling is 9,605 EUR monthly.

Severance Payments

Employee who has been in the company between five to ten years is entitled to severance pay of two months salary. From ten years until fifteen years, they are entitled to three months salary. Between fifteen years up to twenty years, four months of average salary as a severance pay. From twenty years to twenty five years, six months of average salary. From twenty five years up to thirty years, nine months of severance pay. Thirty years and on, the employee is entitled to one year of average salary as a severance pay.

Advance Notice

Employee who has been in the company for less than five years, must provide one month’s advance notice. If they have been in the company from five year until ten years, they must provide two months notice and from ten years and on, they must provide three months notice. Employees can only submit the advance notice either the 1st or 15th of each month.

Termination Procedure

Employer must provide the employee with one month’s notice if the employer has been in the company for less than five years, two month’s notice if they have been in the company from five to ten years, from ten years and more, three months notice.

Sick Days

Employee taking a sick leave must notify the employer on the first day of the leave and submit appropriate medical paperwork. The maximum sick leave period is 26 weeks, after which the employer can terminate the employee. If the employer chooses not to terminate the employee, the employment contract is automatically terminated after 52 weeks of the sick leave. The employer reimburses the employee's full salary until up to the 77th day of the sick leave, afterwards the state will cover until 52 weeks of the leave.

Public Holidays

There are 10 public holidays.

Vacation Days

Employees are entitled to 2.083 days per each month worked in the company, which is maximum 25 days per year.

Additional Employee Withholdings

1) Health Insurance
2) Dependency Insurance
3) Health at Work
4) Accident Insurance
5) Employer’s Mutuality
6) Temporary Tax

1) Employer contributes 3.05%.
2) Employer contributes 0%
3) Employer contributes 0.11%
4) Employer contributes 1%
5) Employer contributes between 0.46% and 2.93% depending on the absenteeism rate from the previous year in the company.
6) Employer contributes 0%.

1) Employee contributes 3.05%.
2) Employee contributes 1.40%.
3) Employee contributes 0%.
4) Employee contributes 0%.
5) Employee contributes 0%.
6) Employee contributes 0.5%.

Social security

Applies to wages and salaries. Is due from both the employer (at a rate of 12%-15%) and the employee (at a rate of 11%). Contributions from both the employers and the employees are computed on a capped basis (app. 115,500 EUR for 2016), and must be withheld by the employer.
Self-employed individuals must register for social security purposes and pay approximately the same rates as combined rates for an employer and an employee.

VAT

VAT is 17% standard rate.