Luxembourg Companies Embracing Short-Time Work
Amidst the economic landscape of Luxembourg, the utilization of short-time work remains a stable and crucial avenue for businesses. As of October 2024, 60 companies have applied for short-time work, with 55 of these requests approved. This move has the potential to impact up to 6,000 employees, showcasing the significance of this measure in maintaining workforce stability and economic resilience.
Current Utilization and Impact
While the approval rate is high, the actual implementation by companies and the number of employees on reduced hours will be confirmed at a later date. In June 2024, out of the 102 approved companies, 59 took advantage of short-time work, affecting 1,446 employees, equivalent to 329 full-time jobs. The Employment Fund stepped in to cover €1.19 million in costs for the scheme that month, highlighting the financial support provided to businesses and workers during challenging times.
Furthermore, the recent meeting of the Conjuncture Committee on September 23 saw the approval of two requests for tax exemptions on voluntary severance payments, impacting 38 individuals. This additional support demonstrates the comprehensive nature of measures in place to safeguard businesses and employees in Luxembourg.
Conditions for Short-Time Working
Access to short-time work in Luxembourg is governed by specific conditions outlined in labour laws. Companies can apply for short-time work under the following scenarios:
- Structural reasons: Addressing structural challenges through employee retention strategies.
- Economic difficulties: Supporting businesses in sectors facing economic crises.
- Economic dependencies: Assisting companies reliant on key clients for financial stability.
- Force majeure: Providing support in cases of uncontrollable circumstances like natural disasters.
Employee Impact and Compensation
When short-time work is implemented, it can affect employees across all employment statuses. During partial unemployment, employees may work reduced hours or be excused from work entirely. Compensation is provided based on the following guidelines:
- Employees receive their standard hourly wage for hours worked.
- For hours not worked, compensation must be at least 80% of the usual hourly wage.
- If employees participate in training programs, they are entitled to compensation equivalent to 90% of their last hourly wage for training hours.
ADEM Reimbursement and Employee Earnings
The National Employment Agency (ADEM) plays a critical role in reimbursing companies for compensation paid during short-time working. Reimbursement is capped at 80% of the affected employee’s salary and 2.5 times the qualifying minimum wage. This support ensures that employees are not financially burdened during periods of reduced work hours.
While transitioning to short-time work may lead to reduced earnings for employees, the minimum wage guarantee protects individuals from facing financial hardship. Every effort is made to support both businesses and workers through these challenging circumstances.