In order to protect jobs and thus prevent redundancies, Luxembourg labour law allows businesses to resort to temporary involuntary layoff (chômage accidentel et technique) under certain conditions.
Who is concerned
Any business whose activity has come to a standstill or has been significantly reduced following a natural disaster qualifying as an event of force majeure, i.e. destroying or damaging the production equipment, may apply for involuntary and temporary layoff.
The involuntary and temporary layoff scheme may also be granted in the event of an interruption or significant reduction in activity due to roadworks or infrastructure developments being carried out by the authorities for a duration of more than one month and seriously impeding customer access to the business, provided that the reduction in activity leads to a considerable decrease in turnover compared to a period of normal activity.
The involuntary layoff scheme can be applied to all employees and apprentices with their place of work in Luxembourg.
In order to request involuntary and temporary layoff support, the business has to:
- be established in Luxembourg;
- hold a business permit, where applicable;
- be unable to temporarily post inactive personnel to other businesses, building sites or workshops;
- commit to maintain the employment or apprenticeship contracts of the persons concerned
Duration and deadlines
The employer must inform ADEM of the involuntary layoff at the latest on the business day following the day on which activity was interrupted.
How to proceed
For the initial application, the employer must submit the application for involuntary and temporary layoff on plain paper to ADEM's job protection unit (Service maintien de l'emploi) indicating:
- the reduction in working hours;
- the procedures put in place;
- the expected duration of the reduction;
- the number of workers concerned.
Maximum duration of involuntary and temporary layoff
Each employee may be laid off temporarily for a maximum of 350 hours per calendar year.
During the involuntary layoff period, the employer advances at least 80 % of the salaries corresponding to the inactive hours, subject to a limit of 250 % of the social minimum salary for unskilled workers.
The employer must bear all costs for the first 16 inactive hours per calendar month.
Reimbursing the business
As of the 17th inactive hour, the Employment Fund (Fonds pour l'emploi) reimburses up to 80 % of the average gross hourly remuneration actually paid to the employee during the 3 months preceding the month in which the layoff occurred.
At the beginning of each month following the month where the involuntary and temporary layoff occured, the employer must send the following to the ADEM:
- a claim statement
- an individual form for each employee concerned;
- a statement of the amounts to be borne by the State.
The amounts received by the employer under an insurance policy concluded with an insurance company for inactive work hours (as of the 17th inactive hour per calendar month) due to the involuntary and temporary layoff are deducted from the Employment Fund subsidies.