Taking into account temporary extensions agreed in the tripartite negotiations, the conditions for short-time working in vulnerable sectors remain applicable until 28 February 2022. The "job retention plans" in the sectors concerned may be extended for the said period by means of an amendment signed with the social partners.
Short-time working in the event of force majeure in relation with the coronavirus
The short-time working scheme is intended to protect jobs in companies encountering structural difficulties, cyclical economic problems or economic difficulties following the loss of one or more of their main customers. Businesses who resort to short-time working commit to not dismiss employees for economic reasons.
Faced with the magnitude of the coronavirus crisis and its tangible repercussions on the lives of businesses and their employees, the Luxembourg government has decided to set up a "force majeure / coronavirus" short-time working scheme with an accelerated procedure for all businesses that have had to completely or partially cease their activities
Who is concerned
The short-time working scheme in the event of force majeure applies in principle to businesses in all economic sectors where the causes invoked are directly linked to the coronavirus.
For instance, this may occur if the supplier of raw materials of the business in question can no longer supply or ensure the necessary volume of raw materials due to the coronavirus or if there is a significant drop in customer or user demand due to the coronavirus.
In the case of requests from a non-profit organisation (including sports clubs and federations), they will be analysed on a case-by-case basis in order to avoid double funding.
The short-time working scheme in the event of force majeure related to the coronavirus crisis may apply to employees (under a permanent or fixed-term contract in force at the time of the event of force majeure) who are not covered by a certificate of incapacity for work and who can no longer be employed at all or can no longer be employed on a full-time basis when the company can no longer ensure the normal operation of its activity.
Apprentices are also eligible with respect to the share of the salary to be borne by the employer.
Temporary work agencies are also eligible with regard to their employees whose assignment contract is ongoing but who can no longer carry out their activity.
To apply for short-time work in the event of force majeure, the business must:
- be established in Luxembourg;
- hold, where applicable, a business permit granted by the competent authority;
- be impacted by the economic or legal consequences of an external event which makes it impossible for the business to continue their normal economic activity. The event must not have been caused by the business;
- undertake to not dismiss any employee for economic reasons.
The permission to make use of the provisions concerning short-time working in case of force majeure can only be granted for a maximum of 1,022 hours per year and per full-time working employee. For persons working on a part-time basis, the limit of 1,022 hours are pro-rated.
Amount of aid
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.
How to proceed
The company, or its representative (e.g. a fiduciary), can submit the application using an online assistant available in their business eSpace in MyGuichet.lu. The person submitting the application must have a LuxTrust product (e.g. Token, Smartcard or Signing stick) or an electronic identity card.
Depending on the NACE code of the business, the scheme distinguishes 2 scenarios:
- businesses that can continue normal business operation but that nevertheless suffer the negative impact of the coronavirus on their business. Their application will be automatically transferred to the secretariat of the Economic Committee at the Ministry of the Economy;
- businesses whose activities are banned following a government decision. They are directly eligible for short-time working.
For the months of March, April and May, the businesses receive an advance payment as soon as their application has been validated. From June onwards, only businesses falling under the second scenario after 11 May 2020 will continue to receive advances.
The advance is equivalent to 80 % of the wage costs for employees on short-time working (calculation based on the average wage costs of the business).
After the end of the month in which the short-time work occurred, a statement must be submitted via MyGuichet.lu. 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.
Applications for the month of May must be submitted using MyGuichet.lu before 31 May 2020. For applications regarding June, and in view of a gradual return to normal, the deadline is also 31 May 2020.
Due to the current situation, applications for short-time working in the event of force majeure in relation to the coronavirus for the months of May and June may exceptionally be submitted until 15 June 2020.
For further information please call ADEM’s Contact Center (tel. 247-88 000)