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Involuntary and temporary layoff

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.

During the involuntary and temporary layoff period, the State reimburses the business 80 % of the salaries normally received by employees as of the 17th hour of monthly inactivity.

Who is concerned

A business can apply for involuntary and temporary layoff in the event of an interruption to or a significant reduction in its activity due:

  • to a natural disaster affecting its production equipment;
  • or to road or infrastructure works, 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 temporary layoff scheme does not apply to businesses who are no longer able to carry out their activity due to an event external to the business, such as the temporary or permanent cessation of activity of an important supplier or a strike affecting an important supplier. In such cases, the business may apply for short-time work in the event of force majeure (chômage partiel en cas de force majeure).

The involuntary layoff scheme can be applied to all employees and apprentices with their place of work in Luxembourg.

Prerequisites

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 second inactive personnel to other businesses, building sites or workshops;
  • commit to maintain the employment or apprenticeship contracts of the persons concerned.

Maximum duration of involuntary and temporary layoff

Each employee may be laid off temporarily for a maximum of 350 hours per calendar year.

Remuneration of Employees

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.
 

How to proceed

The employer must inform ADEM of the involuntary layoff at the latest on the business day following the day on which activity was interrupted.

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:

  • an individual form for each employee concerned;
  • a statement of the amounts to be borne by the State.

The claim declaration must be submitted to ADEM, under penalty of foreclosure, within twelve months following the month of the occurrence of unemployment.

Further Information

Contact ADEM’s department “Financial aids for employers” (Service aides financières pour employeurs)