Labor laws and working conditions

Luxembourg law governs the labor market in the Grand Duchy of Luxembourg. Anyone working in Luxembourg is subject to the current Labor Code.

Here you will find the different types of employment contracts available in Luxembourg. We also discuss the topic of telework, specifically for cross-border workers. You will also find information here on the representative bodies in the Luxembourg labor market.

Labor Law in Luxembourg

Luxembourg labor law is designed to protect the rights of workers—regardless of their status as residents or cross-border workers—and of businesses.

Labor law regulations are established by political leaders in consultation with worker and employer representatives. The rights and obligations of each party are thus clearly defined to safeguard the interests of all involved.

Employees must comply with the provisions established by the legal framework, particularly in the event of a work stoppage. In this regard, cross-border workers are subject to different provisions regarding sick leave.

Defend employees’ rights by becoming a staff representative.

Work-Life Balance for Employees

The Labor Code ensures that employees are not overworked. Thanks to vacation time and regulated working hours, they can thus have sufficient free time to spend with their families and pursue their interests.

However, they must comply with labor laws, or risk termination.

A legal framework conducive to business development

Employers also benefit from a framework conducive to business development, thoughthey must comply with the rules or face fines and legal action. Employees who believe their rights have been violated may file a complaint with the Ministry of Labor, Employment, and the Social and Solidarity Economy.

Overall, Luxembourg is a great place to work and live. Employment laws are robust. They aim to maintain a balance in employer-employee relations.

Looking for an independent union in Luxembourg? Contact ALEBA.

Types of Employment Contracts in Luxembourg

There are several types of employment contracts in Luxembourg. The most common are the permanent contract and the fixed-term contract. Employment contracts must be signed no later than the employee’s first day at the company.

The Permanent Contract in Luxembourg

The CDI, or open-ended contract, is a contract signed between the employer and the employee. The CDI has no expiration date. It thus meets a long-term need of the company. The employee works for the company in exchange for a salary.

The CDI may be terminated by either party, the employer or the employee. The minimum notice period is established in advance in the contract.

An employer who terminates an employee’s employment contract must justify their decision. If they fail to do so, the terminated employee may request the reason for their dismissal. The employer must then justify the validity of their decision.

The employee, on the other hand, may resign without providing any justification.

More information on the termination of an employment contract, whether by dismissal or resignation, can be found here.

The Fixed-Term Contract in Luxembourg

A fixed-term contract is an employment contract signed between the employer and the employee for a specific duration. It addresses the company’s need for a specific, non-recurring task.

The maximum duration of a fixed-term contract is 2 years. It may be renewed twice. The fixed-term contract addresses an extraordinary need of the company. If the need persists, the company must then sign a permanent contract with the employee.

Other types of employment contracts in Luxembourg

Other types of employment contracts may be signed between the employer and the employee. They apply to specific situations and needs.

• Temporary work addresses a specific, non-long-term need of a company. It involves a three-party relationship:
  • between the employer and a temporary staffing agency through a staffing agreement,
  • between the temporary staffing agency and the person assigned to the assignment through an assignment contract,
• A seasonal contract is a permanent contract that meets a company’s ongoing need but is tied to seasonal work, such as the grape harvest,
• Work-study contracts, offered in particular at the Unicareers Job Fair,
• Professional training internships address the need for professional reintegration for vulnerable workers
• Student contracts.

Would you like more information about the types of employment contracts in Luxembourg? Visit this page.

Telework in Luxembourg

Integrating remote work into the operations of Luxembourg companies

The Luxembourg labor market has been disrupted by the COVID-19 crisis. This crisis has led to greater flexibility regarding the number of days worked remotely, ensuring that employees and companies are not penalized.

Employees are now legally entitled to days of remote work. On these days, they are authorized, with their employer’s full consent, to work from home.

Currently, the decision to allow remote work is left to the employer’s discretion. When job hunting, candidates can discuss this matter with their prospective employer at the appropriate time.

Expansion of Remote Work in Luxembourg

According to figures from the Chamber of Employees, 21% of residents were teleworking in 2019. In the midst of the COVID-19 crisis in 2020, and in order to limit the spread of the epidemic, teleworking was made mandatory by the Luxembourg government, except in special cases and where it was impossible due to the nature of the job.

In 2021, 40% of employees were working remotely.

Today, remote work is fully integrated into how work is organized within companies, though it is structured differently depending on the Luxembourg company.

As of today, according to the latest figures from the Chamber of Employees, nearly 30% of Luxembourg employees work remotely.

However, an increasing number of employers are recalling their employees to the company’s premises, notably Amazon, one of the country’s largest employers, which has recalled all of its employees to the office.

Telework and Cross-Border Workers in Luxembourg

Remote work improves the quality of life for cross-border workers by reducing their commute times.

Teleworking rules for cross-border workers

As for cross-border workers (about half of the workforce), the number of telework days is negotiated through bilateral agreements between the Luxembourg government and the countries concerned.

Today, regardless of their country of residence, all cross-border workers—whether French, Belgian, or German—are entitled to a maximum of 34 days of remote work per year. Each day started counts toward this limit. The calculation is based on the calendar year.

Consequences of Exceeding the Limit

If the negotiated telework days are exceeded, the cross-border worker becomes liable for income tax on their wages in their country of residencerather than in Luxembourg.

If more than 49.9% of their working time is spent in their country of residence, employees must register with local social security agencies. This means that their retirement pension contributions are no longer made in Luxembourg. Furthermore, the Grand Duchy will no longer pay family allowances.

The amount of time spent working remotely directly impacts the tax situation of non-residents seeking tax optimization. Learn more here.

Employee Compensation

The employer and the employee are free to agree on the employee’s compensation. This is calculated based on the assignment or position, the employee’s qualifications, and their skills. However, a minimum wage must be observed.

Benefits in kind may supplement the monthly salary paid to the employee. These are freely negotiated between the employee and their employer. Companies often offer benefits in kind related to their business activities.

Are you applying for a job and want to know the salary ranges you can expect? Check out the latest trends in compensation here.

Other useful information about the job market

Same status for refugees and Luxembourg residents

Luxembourg law grants refugees the same right to work as Luxembourg residents: they do not need a work permit.

Given the international context, the number of people receiving international protection, also known as “refugees,” is growing in Luxembourg.

They are finding work due to labor shortages in certain sectors.

Languages spoken in the workplace

Luxembourgish, French, and German are the three official languages in Luxembourg. Depending on the sector, one language or another is generally preferred in interactions among colleagues or in business settings.

In certain professions, such as personal care and assistance, knowing Luxembourgish is essential. Speaking Luxembourgish is highly appreciated by the native Luxembourgish population, particularly in shops and service sectors.

However, given the high proportion of foreign nationals in certain companies, English is widely used in many sectors of professional life.

Looking for a job in Luxembourg? Don’t overlook the summer months.

The Importance of Networking in Professional Circles

Luxembourg is a small country, often likened to a large village given its population size. Personal networks are also very important in professional relationships.

Don’t hesitate to reach out to the many associations and participate in events that promote networking! This can be particularly useful when looking for a job.

Work and driver’s licenses

If you need to travel for work, find out about the formalities required to ensure your foreign driver’s license is valid in Luxembourg. You’ll find essential information on the steps to follow in our comprehensive guide to Driver’s Licenses in Luxembourg.

When integrating into the workforce in Luxembourg, it’s essential to have your professional qualifications recognized to boost your job application and your salary. Check out our page on the Recognition of Degrees and Professional Experience in Luxembourg.

Where can you find information related to your work?

Chamber of Employees in Luxembourg (CSL)

The Chamber of Employees (CSL) operates under the supervision of the Ministry of Labor and Employment. It represents all employees (office workers and manual laborers), apprentices, and retirees who are currently working or have previously worked in Luxembourg.

In addition to its advisory role on all draft laws and Grand Ducal regulations, the Chamber of Employees provides information on labor law—including legislation regarding sick leave—and all matters related to social security in Luxembourg.

One of the CSL’s main missions is also to train future employees and ensure the continuing education of current employees.

Through the Luxembourg Lifelong Learning Center, the Chamber of Employees offers a wide range of training courses (law, marketing, humanities, finance, office automation, and IT, etc.) in French, English, or German.

Luxembourg Chamber of Trades and Crafts

The Luxembourg Chamber of Trades is the professional organization responsible for the crafts sector, encompassing more than 120 trades and local occupations. It represents over 7,000 businesses, accounting for 22% of all businesses in Luxembourg.

The Luxembourg Chamber of Trades works to preserve and develop the crafts sector in Luxembourg. It is responsible for:

• vocational training in craft trades to preserve and develop artisans’ expertise
• establishing the legislative framework and defining regulations for craft trades to preserve their expertise while also fostering innovation
• providing advice and information, etc.

Here you will find all the information you need on starting a business. In particular, it organizes seminars for entrepreneurs and other self-employed workers: business management, languages, technology, etc., as well as apprenticeships and continuing education related to craft trades and artisan professions.

Luxembourg Chamber of Commerce

The Luxembourg Chamber of Commerce is a public institution that supports and assists all Luxembourg businesses in their development at the national, European, and international levels.

It represents 75% of all salaried employment in Luxembourg and accounts for 80% of Luxembourg’s GDP. It is the country’s largest professional chamber.

The Luxembourg Chamber of Commerce provides economic analyses and offers services to its more than 90,000 member companies and to anyone interested in engaging in commercial activity.

The Chamber of Commerce can influence national legislation by issuing opinions. It promotes entrepreneurship and the creation and development of businesses in the country. It also supports economic and trade relations with foreign countries.

The Chamber of Commerce’s Merkur magazine is a bi-monthly newsletter with a circulation of over 35,000 copies. You can request it online on the Chamber of Commerce’s website.

The Chamber of Commerce brings together its continuing education activities under the “Luxembourg School for Commerce.”

Find all our information on employment in Luxembourg here.