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Employee benefits in Luxembourg: 13th salary, severance pay and compensations
In Luxembourg, during a job contract, employers must follow the law to provide several benefits for their workers. This includes things like paid vacation, extra pay for overtime work, time off for new moms and dads, and severance pay if the job ends, plus more.
Luxembourg is known as one of Europe's top places to live, offering a great quality of life and good working benefits for its employees. People working here usually have better conditions than in other countries. For example, the pension system is impressive – you only need to contribute for 10 years to be eligible for a pension.
Different types of workers' remuneration and bonuses in Luxembourg
Luxembourg offers diverse forms of remuneration, bonuses, and benefits for its workforce. While these entitlements are universal, each comes with distinct conditions. In the upcoming sections, we will intricately examine each benefit that Luxembourgish workers are entitled to, elucidating the specific conditions associated with each.
What if you work with yourself?
It's crucial to note that these provisions apply to employees working in Luxembourg and do not extend to independent workers.
Learn more about self-employment in Luxembourg
Overtime payment
In Luxembourg, the standard working hours are set at 8 hours per day and 40 hours per week. For any work beyond this agreed-upon standard, employees are entitled to compensation in the form of overtime pay.
However, there is a maximum limit of 2 hours per day and 8 hours per week for overtime.
Eligibility
The overtime benefit is for all private sector workers, except for top bosses, who work more hours than their job contracts say. However, some workers don't get this overtime benefit and don't follow the usual work-hour rules. This includes family-run businesses with only family employees, river transport companies, businesses that move around, people working from home, sales reps who work away from the office, and high-up managers or executives who are crucial for running and overseeing the company.
Compensation
Overtime hours worked must be compensated with paid time off, with a rest period of one and a half hours for each overtime hour worked. If, due to organizational reasons, it is not feasible to compensate the overtime hours through time off, or if the employee leaves the company before recovering the worked overtime hours, these hours must be paid at a rate of 140%.
Legal references
For further details and legal references, you can refer to the related de page on Guichet.lu and the Labor Code, Book II, Title I.
Annual paid leave
In Luxembourg, workers are entitled to annual paid leave lasting a minimum of 26 working days, with the possibility of additional days granted by employers or collective agreements. However, specific conditions govern this benefit, and we will examine them in detail.
Eligibility
All employees, including apprentices, irrespective of their work schedule, be it part-time, full-time, or other arrangements, and regardless of the contract type, whether fixed-term or indefinite, have the right to annual paid leave. It's important to note that for part-time employees, vacation days are calculated proportionally based on their weekly working hours.
Conditions
Unless otherwise agreed by the employer, new employees must work continuously for at least 3 months before being eligible for the accrued paid leave since the start of their contract. Additionally, it is crucial to understand that engaging in paid work during vacation is not permitted, and employees cannot waive their entitled vacation, even in exchange for compensation, unless the employment relationship is terminated.
Duration of paid leave
The legal duration of annual leave is 26 working days per year, accumulating at a rate of 2.167 days per month worked.
Certain categories of workers automatically receive additional days:
- Disabled workers, war invalids, and those who have experienced a workplace accident have 6 paid working days per year covered by the State.
- Employees in mines and quarries have 3 additional paid working days per year.
- Workers unable to enjoy an uninterrupted rest period of 44 weekly hours have 1 extra day off for every 8 weeks, consecutive or not, in which they haven't had continuous rest.
Legal references
For further details and legal references, please consult the related page on Guichet.lu, the Labor Code - Book II, Title III, Chapter III, and the Labor Code - Book III, Title IV, Chapter IV.
Weekend and holiday work compensation
All workers and apprentices in Luxembourg enjoy the right to legal public holidays. While the premise is straightforward, with 11 legal holidays, important nuances exist, such as working on holidays due to specific company conditions or holidays falling on weekends.
- New Year's Day (January 1)
- Easter Monday
- Labor Day (May 1)
- Europe Day
- Ascension Day
- Whit Monday
- National Day (public celebration of the Grand Duke's birthday on June 23)
- Assumption Day (August 15)
- All Saints' Day (November 1)
- Christmas Day (December 25)
- 2nd Christmas Day (December 26)
Eligibility
Every worker and apprentice is entitled to legal public holidays. However, employers may request employees to work on holidays in exchange for additional compensation.
Compensation
Typically, employees do not work on public holidays. However, if an employee was not scheduled to work on the holiday or if the holiday falls on a Sunday, he is entitled to compensation.
Public holiday that falls on regular non-working day
If a public holiday falls on a regular working day for the employee, they are entitled to their usual pay and a compensatory day off to be taken within three months. If the company's operations prevent the employee from taking this compensatory leave within three months, the employer must grant it before the end of the calendar year or within the first three months of the following year for holidays in November and December. Failing this, the employee is entitled to the salary corresponding to the duration of the leave.
Public holiday that falls on Sunday
If a public holiday falls on a Sunday, the employee is entitled to their usual pay, a compensatory day off to be taken within three months, and this leave must be taken as time off, not replaced by monetary compensation.
When employees are required to work on public holidays, they are entitled to specific compensation based on the day of the week and their normal working hours.
Public holiday that falls on regular working day
If an employee works on a public holiday when they would typically be scheduled to work, they receive their regular pay, the average hourly wage for the hours worked, and a 100% surcharge on those hours.
Public holiday that falls on regular non-working day
If an employee works on a public holiday when they would not normally be scheduled to work, they are entitled to the average hourly wage for the hours worked, a 100% surcharge on those hours, and a compensatory day off to be taken within three months.
Public holiday that falls on Sunday
If an employee works on a public holiday falling on a Sunday, they receive the average hourly wage for the hours worked, a 100% surcharge for working on a public holiday, a 70% surcharge for working on a Sunday, and a compensatory day off to be taken within three months.
Legal references
For further details and legal references, consult the relevant page on Guichet.lu, the Labor Code - Book II, Title I, Chapter I, the Labor Code - Book II, Title III, Chapter II, and the Labor Code - Book III, Title IV, Chapter IV.
Take a look at our holidays calendar for 2024
Sick leave
Luxembourgish workers are entitled to take days off from work in the event of incapacity due to illness or accidents. However, justifying their absence and meeting specific requirements are essential.
Eligibility
All employees unable to attend work due to illness or accidents have the right to sick leave days, provided they declare their incapacity through a medical certificate.
Notification obligations
From the first day of absence, it is mandatory to inform the employer, either by phone or in writing. If the employee cannot do so personally, a third party may communicate on their behalf. Additionally, in the case of an absence exceeding 2 working days, a medical certificate of incapacity must be sent to both the employer and the CNS (National Health Fund). The employer reserves the right to request this certificate from the first day of absence.
Conditions for leaving home
Sick leave is not akin to a free day where one can engage in unrestricted activities. There are limitations on leaving the house during illness. For the first 5 days of incapacity, is not possible to leave the residence, even if authorized by a medical professional. After this initial period, it’s possible to leave the home from 10:00 to 12:00 and from 14:00 to 18:00. Necessary visits to the doctor or any healthcare facility are permitted at any time from the first day of incapacity.
Compensation during sick leave
Throughout the sick leave period, employees are entitled to continued remuneration from the employer until the end of the month in which the 77th day of incapacity occurs. Beyond this date, employees still have the right to a subsidy, but it is provided by the CNS.
Legal references
For further details and legal references, consult the dedicated page on Guichet.lu, the Labor Code - Book I, Title II, Chapter I - Section 4, the Social Security Code - Book I, Chapter II, and the Statutes of the Caisse Nationale de Santé (CNS).
Maternity leave
In Luxembourg, every pregnant woman working is entitled to maternity leave, comprising both prenatal and postnatal periods. This provision not only safeguards the health of expecting mothers but also allows them dedicated time to care for their newborns. Throughout pregnancy and maternity, female employees benefit from specific contractual guarantees and adjustments to their working conditions.
Support for mothers
Pregnant women has protection against dismissal from the onset of pregnancy, special health and safety protection in roles with specific risks, exemption from night work risks, leave for prenatal examinations, and several weeks of leave both before and after childbirth. Flexible schedules for breastfeeding are also part of the supportive measures.
How to apply for maternity leave?
Read dedicated articleTo obtain these benefits, certain conditions must be met.
Prior pregnancy notification
To benefit from the protection granted to pregnant women, a notification to the employer is required. This can be done at the woman's discretion but needs to be accompanied by a medical certificate confirming the pregnancy, sent by registered mail with acknowledgment of receipt, or delivered in person with the employer's signature.
Maternity leave application
For maternity leave entitlement, women must submit a medical certificate to both the Caisse Nationale de Santé (CNS) and their employer, indicating the expected delivery date during the last 12 weeks of pregnancy.
Prenatal and postnatal leaves
The prenatal leave begins eight weeks before the anticipated delivery date, and postnatal leave extends for 12 weeks from the actual delivery date. In total, pregnant women are entitled to 20 weeks of maternity leave.
Benefits and protection
During job interviews, pregnant women are not obliged to disclose their pregnancy, as it is considered a private matter. Additionally, expecting or lactating women are entitled to various protective measures. For a detailed list, we recommend you take a look at the government's explanatory text on the Protection of Pregnant or Breastfeeding Women.
Compensation
Throughout maternity leave, women are entitled to maternity benefits paid by the CNS, not the employer. This benefit corresponds to the highest salary received in the three months before maternity leave. The maternity pay cannot fall below the monthly minimum social wage nor exceed five times the monthly minimum social wage.
Legal references
For further details and legal references, consult our detailed article about this subject, the dedicated page on Guichet.lu, the Labor Code - Book III, Title III, the Social Security Code, and the Statutes of the Caisse Nationale de Santé (CNS).
Paternity leave
Paternity leave is a special allowance of 10 days granted to working fathers upon the birth of a child or the adoption of a child under 16. Below, we outline the conditions for accessing this leave.
Eligibility
To be eligible for paternity leave, it is necessary to submit a medical certificate for childbirth or supporting documentation for adoption at least 2 months before the anticipated dates for taking the leave.
Duration of paternity leave
For workers with a standard 40-hour workweek, paternity leave corresponds to 80 hours, which can be taken in a fragmented manner. For those with a workweek of less than 40 hours, the leave hours are proportional to the established weekly working hours in the employment contract. In the absence of an agreement between the worker and the employer regarding the days of leave, the paternity leave must be taken at once and immediately following the birth or adoption.
Legal references
For further details and legal references, refer to the dedicated page on Guichet.lu and the Labor Code - Book II, Title III, Chapter III.
Severance pay in Luxembourg
When an employer dismisses a worker for reasons other than serious misconduct, a notice period is mandatory. If the employee has been with the company for 5 years or more, they are entitled to an extended notice period and severance pay.
Severance pay calculation 2024
| Length of service (years) | Severance pay (months) | Notice (months) | Extended notice without severance pay (months) |
| Less than 5 | 0 | 2 | 0 |
| 5 to 9 | 1 | 4 | 5 |
| 10 to 14 | 2 | 6 | 8 |
| 15 to 19 | 3 | 6 | 9 |
| 20 to 24 | 6 | 6 | 12 |
| 25 to 29 | 9 | 6 | 15 |
| More than 30 | 12 | 6 | 18 |
For small companies
However, companies with fewer than 20 employees have the option to substitute severance pay with an extension of the dismissed worker's notice period. The employer must explicitly state this choice in the dismissal letter.
The severance pay amount is contingent on the employee's tenure at the expiration of the notice period. For further details and legal references, consult the dedicated page on Guichet.lu, the Labor Code - Book I, Title II, Chapter IV, and the Labor Code - Book IV, Title I.
13th salary and non-compulsory benefits in Luxembourg
In addition to the mandatory benefits we've outlined, employers in Luxembourg also have the option to provide certain non-compulsory benefits, allowing for flexibility in enhancing the overall employee experience.
13th month salary in Luxembourg
This entails an additional month's salary paid as a bonus at the end of the year. It's crucial to note that the Labor Code does not mandate employers to offer this bonus. Furthermore, if some employees in the company receive this bonus, it doesn't automatically extend to all employees; employers have the freedom to determine eligibility. While often equivalent to a month's salary, the total may be prorated based on the number of months worked for those joining during the year.
Meal vouchers
Employers can provide special cards that employees can use at most restaurants in Luxembourg to receive complimentary meals.
Take-home cars
Certain companies permit employees to use a company vehicle for free during specific hours of the day.
Gym or health club
Companies may offer employees free access to a company gym or health club.
Profit-sharing bonuses
Some companies distribute this bonus to employees who have contributed to improving the company's results.
Additional perks
Various other benefits may include extra annual leave, a personal budget for learning and development, supplementary pension plans, additional health insurance, allowances for therapy or coaching, mentorship programs, volunteer days, and flexible working hours.
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How to obtain benefits and compensation?
Usually, to get benefits and compensation in Luxembourg, you just need to qualify for them. This means meeting certain requirements, like how long you've been with the company or specific aspects of your job or situation. For instance, to get maternity leave, you have to show you're eligible with the right paperwork. For many other benefits, simply talking to the right person in your company can help, whether that's your manager or someone from HR. They'll help you with any forms you need to fill out and guide you through the process to get your benefit.
Here is a summary of the requirements to access each of the aforementioned benefits:
Overtime payment
The sole requirement is to be covered by this benefit, as mentioned earlier certain individuals are excluded.
Annual paid leave
The fundamental requirement is work period of 3 uninterrupted months before being eligible to vacation benefits.
Weekend and holiday compensation
Automatic entitlement, but the amount vary based on the schedule and whether the holiday falls on a Sunday.
Sick leave
Declaring work incapacity through a medical certificate is necessary to qualify for sick leave benefits.
Maternity leave
You must notify the employer, submit a medical certificate to the CNS, and indicate the expected delivery date during the last 12 weeks of pregnancy.
Paternity leave
It is necessary to submit a medical certificate for childbirth or adoption papers at least 2 months before the anticipated leave dates.
Severance pay
To qualify, individuals must have a minimum stage of 5 years of tenure at the expiration of the notice period for dismissal.
13th salary
It is up to your employer to decide if they want to give it. It might depend on how you've worked, your position, or the company's financial situation.
What to do in case your employer is escaping paying benefits?
If you believe that your labor rights are being violated in Luxembourg, you should promptly reach out to the supporting authority.
The Inspectorate of Labor and Mines in Luxembourg (ITM) play a crucial role in safeguarding employees' rights and ensuring compliance with labor laws. By reporting problems to this regulatory body, you will obtain guidance, resolution, and enforcement of your rights.
MON
8:30-12:00 and 13:30-16:30
TUE — FRI
8:30-12:00 and 13:30-16:30
Located 500m from the CHL (Centre Hospitalier de Luxembourg)
Read more about the labor law in Luxembourg
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Frequently Asked Questions (FAQ)
What are the conditions for qualifying for severance pay in Luxembourg?
The conditions for qualifying for severance pay in Luxembourg depend on the employee's tenure. Typically, an employer who terminates an employee for reasons other than gross misconduct must provide advance notice, and the length of the notice period varies based on the employee's years of service. If the employee has been with the company for five years or more, they are entitled to a more extended notice period and severance pay.
Do fathers have paternity leave in Luxembourg?
Yes, fathers are entitled to paternity leave in Luxembourg. This special leave, lasting up to 10 days, is granted to fathers upon the birth or adoption of a child. To qualify, fathers must provide a medical certificate of birth or relevant documentation for adoption. This allows fathers to be actively involved during the early days of their child's life.
How is sick leave handled, and what documentation is needed?
Sick leave in Luxembourg requires employees to notify their employer from the first day of absence, either personally or through a representative. After two days of absence, a medical certificate must be submitted to both the employer and the National Health Fund (Caisse Nationale de Santé or CNS).
During sick leave, specific restrictions on leaving the home apply, especially in the initial days, while necessary visits to medical facilities are permitted at any time. Employees are entitled to continued remuneration from the employer until the end of the month in which the 77th day of incapacity occurs. Beyond this date, employees still have the right to a subsidy, but it is provided by the CNS.
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Source: www.usemultiplier.com, guichet.public.lu, guichet.public.lu, guichet.public.lu, guichet.public.lu, www.justarrived.lu, guichet.public.lu, guichet.public.lu, guichet.public.lu, guichet.public.lu
We took photos from these sources: Monstera Production on Pexels
Authors: Luz
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