In order to maintain employment and, consequently, avoid redundancies, Luxembourg labour law provides that firms may, under certain conditions, have recourse to different short-time working schemes, depending on the nature of the difficulties encountered. This system enables firms to keep their trained employees in employment with skills that are essential to the smooth running of their activities.
The short-time working scheme is therefore one of the major instruments enabling enterprises to cope with the fall in economic activity due to the Covid-19 health crisis.
In view of the current exceptional situation and the repercussions on the life of companies and their employees, the conditions for applying for and obtaining short-time working have been adjusted.
In order to speed up and facilitate the procedure for applying for short-time working in cases of force majeure linked to the Covid-19 crisis, ADEM, in close collaboration with the Secretariat of the Economic Committee and the State Information Technology Centre (CTIE), has set up a new automated system that enables companies to submit their short-time working applications via an online form at: http://guichet.lu/cocp.
The application has to be renewed every month.
Companies submit their application using secure authentication (LuxTrust product (e.g. Token, Smartcard or Signing stick) or electronic identity card). They also have the possibility of having their application submitted by their authorised representative (a trustee), e.g. if they do not have a LuxTrust product. The data collected will be processed automatically by ADEM. The application has been designed to be as simple as possible for companies. From 27 March 2020, companies will be obliged to use the form available at MyGuichet.lu to submit their application (applications by mail, e-mail or fax will no longer be accepted).
Applications from companies that can no longer carry out their activities following the government decisions of March 2020 will be processed directly by ADEM. Applications from other companies will only be processed after the agreement of the Economic Committee (Comité de conjoncture). In both cases and as soon as the request is accepted, ADEM will pay an advance to the companies. This advance corresponds to 80% of the salaries of the staff affected by short-time working and will enable the firms to obtain financial liquidity quickly.
After the end of the month, the company must draw up a detailed statement showing the actual inactive work hours and the sums actually owed by the state. In the event that the advance was greater than the sums actually owed by the state, the company will be required to reimburse the amounts overpaid.
Which companies are eligible for the new short-time working scheme due to COVID-19?
Companies that can no longer carry out their activities following a government decision are automatically eligible for short-time working scheme without the need for the agreement of the economic conditions committee.
All other companies that have to suffer a drop in economic activity due to the coronavirus crisis must receive the agreement of the Economic Committee in order to be eligible for short-time work.
Temporary employment agencies are also eligible with regard to their employees whose assignment contract continues but who can no longer carry out their activity.
Both types of companies must apply using the same form at the MyGuichet.lu.
Which employees are eligible for the new partial unemployment scheme due to COVID-19?
- Employees on permanent and fixed-term contracts (the contracts must be in force at the time of the occurrence of the force majeure event)
- Apprentices in initial and adult learning.
How much compensation is paid to companies?
During the period of short-time working, the state shall pay compensation up to 80 % of the salaries. Reimbursement is limited to 250 % of the social minimum wage for unskilled workers aged 18 or over. This compensation may not be less than the amount of the social minimum wage for unskilled workers. Any difference between the amount of the compensation and the social minimum wage for unskilled workers will be borne by the Employment Fund.
What about companies that have already applied on the basis of the old application form?
The applications already received by the secretariat of the Economic Committee by mail, email or fax are being processed. In view of the extremely large number of applications received, this processing may take until 3 April 2020. Companies whose application was incomplete and therefore cannot be processed will be contacted by ADEM.
Please also consult the list of FAQs and our dedicated page of short-time working in the event of force majeure in relation with the coronavirus