HR Solutions & Employee Relations in Luxembourg with IRIS  

IRIS HR consulting has experience helping businesses grow in Luxembourg. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in Luxembourg to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. As a leading Eastern European economy, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.

Take your business to Luxembourg with IRIS HR Consultancy.  

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    Global expansion in Luxembourg  

    Establishing your business in Luxembourg

    Luxembourg has the highest per capita gross domestic product in the world, while being a mere 998 square miles. Despite the size of its geography, Luxembourg has a global reputation for productivity and efficiency and its markets have been known to attract foreign trade and investment.

    Luxembourg is a banking giant, positioned as the 25th most competitive in the world. Here, the country specialises in cross-border fund administration. Other similar industries power Luxembourg, making it strong financially and, therefore, attractive for external investment.

    Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.

    Before entering the Luxembourg market, you will need to honour labour regulations, which have developed over the years. Establishing a business in Luxembourg will require local knowledge – everything from establishing your operation based on location, to understanding the ‘employees’ market’.

    Complying with these procedures can be easier when you partner with IRIS HR consultants – we can help you reach Luxembourg markets.


    Employment laws in Luxembourg   

    When first expanding your business into Luxembourg, navigating local laws, legislation and rules of employment laws is no mean feat, especially if you’re unfamiliar with the country’s strict labour focused policies. Throughout the world map, these laws are almost never universal. Rather, employment is dynamic and reflects each country’s social, economic and cultural opportunities.

    Did you know?

    Luxembourg is the seat of the Court of Justice of the European Union, which is the highest judicial authority in the EU.

    HR In Luxembourg

    Employment rights & contracts in Luxembourg

    In Luxembourg, some companies have collective agreements, which govern certain aspects of contracts and employment terms and conditions. Other, alternative employment deals must conform to the Labour Code.

    If an employer confirms an employment contract orally, then it is automatically deemed permanent. All contracts must be written, and only the employee can establish a contract if no existing written contract or arrangement is agreed on.

    Hiring & recruitment in Luxembourg  

    When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer and thereafter – including before, during and after the commencement of an employment contract.

    What are the working hours in Luxembourg?  

    The working week in Luxembourg is set a maximum of 40 hours. A working day may never exceed 10 working hours and a working week may never exceed 48 hours.

    Overtime in Luxembourg 

    Overtime is highly regulated and restricted to 2 hours per day. Provision of time off at 1.5x the overtime worked, is the usual practice; where this is not possible for business reasons, overtime payment must be made with an additional 40% premium on salary.

    Maternity Leave in Luxembourg

    Maternity leave is entitled to start eight weeks before birth and continues 12 weeks after birth. If the birth occurs before the expected date indicated on the certificate of pregnancy, the days of antenatal leave not taken are added to the postnatal leave (however, the total duration of maternity leave may not exceed 20 weeks).

    During maternity, the employee cannot receive her salary and the benefits that relate to her position, instead she receives maternity benefits from the government.

    Unless the employee wants to leave to fully devote to raising their child, a resignation without notice cannot be honoured.

    Paternity leave in Luxembourg 

    After the birth of the child, an employee is entitled to 10 days’ paid paternity leave, which must be requested at least two months in advance, but can be taken two months within the birth of the child.

    Adoptive parental leave

    Employees are entitled to 12 weeks adoption leave when one or more children under the age of 12 are adopted. Adoption leave will enable one of the partners to stay at home in order to take care of the child(ren) who has/have recently arrived in the family.

    Parental Leave in Luxembourg

    Either parent can apply for parental leave, which allows full-time workers to claim split leave. Split leave allows parents to raise children in a flexible manner, until the child is six years of age. Parents can chose from the following options:

    • a full-time leave of 4 or 6 months;
    • a part-time leave of 8 or 12 months;
    • split leave of 4 months for a maximum period of 20 months;
    • split leave of one day per week for a maximum of 20 months.

    Sick Leave in Luxembourg

    The first three days of the sick leave can be communicated orally, and after three days all employees are moved to Statutory Sick Pay. This lasts 78 weeks, which are paid for by the employer at 80% against regular pay. This is reimbursed by the government after it has been paid to the employee.

    Public Holidays in Luxembourg

    Luxembourg celebrates 11 public holidays, including:

    • New Year’s Day
    • Easter Monday
    • May Day
    • Europe Day
    • Whit Monday
    • Ascension Day
    • Grand Duke’s Birthday
    • All Saints’
    • Christmas Day
    • Stephen’s Day
    • Assumption

    Vacation  

    Employees benefit from 26 days of paid leave annually in addition to public holidays. Leave must be taken in the calendar year, but can be ported to the following year and taken before the end of March.

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    End of Service 

    HR in Luxembourg requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.

    For these more complicated matters, you will need expert HR guidance to navigate Luxembourg labour laws and remain compliant.

    Recruitment in Luxembourg

    Termination (including Severance) in Luxembourg

    Termination of a contract in Luxembourg requires a letter, which does not have to include the reason for dismissal. However, if the employee wishes to know the reasoning, and the employer doesn’t release this information within 30 days, then the employee can take it the courts.

    Reasons for dismissal are:

    • mutual agreement;
    • resignation with notice by the employee;
    • resignation by the employee due to gross misconduct by the employer;
    • dismissal during the trial period;
    • dismissal with notice for real and serious cause based on the employee’s attitude;
    • dismissal of employee for gross misconduct;
    • redundancy;
    • closure of business;
    • retirement;
    • employee’s incapacity to work;
    • death of one party.

      

    Pensions in Luxembourg 

    Luxembourg has a strong social security system, which includes pensions. As long as an employee has been paying into the system for 120 months, upon their 65th birthday, or 57/60 in specific circumstances, they can receive a state pension.

    Social Security Coverage  

    Social security in Luxembourg is a single, unified system and contributions apply to both compensation and earnings up to a maximum of 5 times the minimum reference social wage.


    Supplemental benefits

    Health Insurance  

    Although the social security scheme provides access to healthcare services, it is commonplace to secure an additional private healthcare plan to supplement this, with cover supporting both employees and families.

    Life Insurance

    It is becoming increasingly popular for employers to provide life insurance coverage to employees; typically this will form part of a supplemental pension plan.

    Pension / Retirement Savings

    Employers looking to provide a comprehensive suite of supplemental employee benefits, will consider implementing an occupational pension plan; such schemes are usually defined contribution arrangements.

    Disability Insurance

    Such schemes are usually under the umbrella of a retirement scheme. Coverage is designed to enhance the statutory provision for long-term disability and is funded by the employer.

    Working in Luxembourg

    Why Partner With IRIS?

    When entering small countries like Luxembourg, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.

    Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Luxembourg.

    Our cost-effective, knowledgeable approach to HR in Luxembourg makes us an ideal partner to commence your overseas plans.