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New simplified measures for businesses applying for Coronavirus-related short-time work/partial unemployment

The Economic Committee for exceptional circumstances held an extraordinary meeting on 18 March under the co-chairmanship of Dan Kersch, Deputy Prime Minister, Minister of Labour, Employment and the Social and Solidarity Economy, and Franz Fayot, Minister of the Economy.

In view of the extent of the threat posed by COVID-19 and the tangible repercussions on the lives of businesses and their employees, the Economic Committee unanimously validated the proposals and procedures developed jointly by the two ministries in question. From now on, there is:

  • an accelerated procedure for businesses directly affected by a government decision;
  • a force majeure/COVID-19 short-time work/partial unemployment scheme.

Accelerated procedure for businesses directly affected by a government decision
Businesses that have had to or still have to cease all or part of their activities following a government decision, such as those covered by the ministerial order of 16 March 2020 or subsequent decisions, are exceptionally directly eligible for short-time work/partial unemployment, as of the effective date of the government decision causing their total or partial closure.

An online system for claiming compensation for the hours unemployed in the context of short-time work/partial unemployment due to closures imposed by the Government is currently being developed and will be available in the coming days on the ADEM website. The businesses concerned are invited to wait until this system is put online to make their request for compensation, which will be retroactive to 16 March 2020. A communication to the general public will be made as soon as the online system is operational.

ADEM will endeavour, within the limits of its available human resources, to process these refund applications as diligently as possible, given the exceptional situation facing businesses and administrations.

Advances may be paid based on the total salary, effective as of the date of the respective government decision.

Compensation is limited to 80% of the normal salary, up to a maximum of 250% of the minimum social wage for non-qualified employees (i.e., EUR 2,141.99 x 2.5). A monthly statement must be submitted.

Compensation declarations will be subject to ex-post controls and erroneous or fraudulent declarations may give rise to forced repayments without prejudice to legal proceedings.

Force majeure/coronavirus short-time work/partial unemployment scheme
Companies that remain open but nevertheless are suffering due to the negative impact of COVID-19 on their business operations may at any time submit an application for the granting of ‘force majeure/coronavirus short-time work/partial unemployment to the Secretariat of the Economic Committee at the Ministry of the Economy.

The form in question can be downloaded from adem.lu and from the public.lu counter.

Applications received by Friday 20 March 2020 at 12 noon will be dealt with at the meeting of the Economic Affairs Committee scheduled for Monday morning, 23 March 2020.

At this meeting, applications for short-time work/partial unemployment for cyclical or structural reasons will also be processed.

After the meeting, businesses will be informed in writing if their application was  the accepted or refused.

Applications for short-time work/partial unemployment must be communicated to staff representatives and, as far as possible, also signed by them.

Which employees and organisations are eligible for the short-time work/partial unemployment scheme?
Those who are eligible for short-time work/partial unemployment are: employees, i.e. persons with a permanent or fixed-term employment contract legally employed by a company legally established in Luxembourg at the time of unemployment, who are fit for work and under the age of 68 and who do not receive an old-age pension, an early old-age pension or a disability pension, who are normally employed at a place of work on Luxembourg territory and who are registered in and insured by the Luxembourg social security system.

Temporary workers are therefore excluded.

On the other hand, and in order to continue to motivate businesses to participate actively in the apprenticeship system, apprentices are eligible as well as persons in the process of being employed through employment initiatives, including, in particular, those with contracts initiating employment and employment reinsertion contracts in which part of the salary is to be paid by the employer.

Applications from non-profit organisations will be analysed on a case-by-case basis to avoid any double financing.

Applications from crèches are in principle ineligible, since the Ministry of Education, Children, and Youth continues to contribute to 70% of their operating costs.

Some general rules to be observed
In addition, general rules apply in all cases, i.e. prior depletion of the company's own resources (non-renewal of fixed-term contracts that have expired, nor for new fixed-term contracts, depletion of remaining leave, temporary employees, or for lending of temporary labour), as well as the prohibition of dismissals for reasons not inherent to the individual.

Please also note that employees who telework or who are on family leave are not eligible for short-time work/partial unemployment during this period.

Press release by: Ministry of the Economy/Ministry of Labour, Employment and the Social and Solidarity Economy  /  Translation : Luxembourg Chamber of Commerce

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Chambre de Commerce Ministère de l'Économie

In partnership with

ADEM, Administration de l'Environnement, Digital Lëtzebuerg, 1535°, Chambre des Métiers, guichet.lu, HoST, IPIL,
ITM, JEL, LBAN, Microlux, LBR – RCSL, Luxinnovation, MC, Ministère des Affaires Etrangères, nyuko, Ministère de la Santé,
Ministère de la Digitalisation – CFUE, Paul Wurth InCub, Technoport, Touchpoints, WIDE

And with the support of various players