Work and Wages

Minimum Wage

Minimum wage is the minimum level of payment that all male and female wage earners, without any intellectual or physical disability, are entitled to receive. On receipt of recommendations from the government every two years, the legislature fixes the minimum wage through a statute.Minimum wage is adjusted taking into account the general economic conditions and incomes in the country and according to the evolution of the average wage level. The raise in the minimum wage is determined by the increase in the cost of living index. Moreover, the wage rate varies according to the employee's professional qualifications and age.

Wages may also be set through collective bargaining however the wage rate may not be less than the national minimum wage rate. Workers are entitled to the social minimum wage however if a company's financial position does not allow it to pay even minimum wage, a temporary order may be issued by the Minister of Labour allowing the company to pay a wage that is lower than the national minimum wage rate. In the case of disabled employees, an employer may apply to the Commission d'orientation et de reclassement professionnel for application of a lower minimum wage rate to a worker whose physical or mental disability renders him/her unable to work with the same efficiency as a worker without any disability.

Minimum wage for unskilled workers who are 18 years and over is referred to as the general minimum wage. The minimum wage for qualified workers who are 18 years and over is 120% of this general minimum wage.

The wage rate for workers under 18 years of age is expressed as a percentage of general minimum wages. It is 80% of the general minimum wage for workers who are 17-18 years old and 75% for the general minimum wage for those workers who are 15-17 years old.

In order to be considered as qualified, an employee must either have  undertaken a recognized official certificate at least equivalent to a vocational skills certificate (certificat d’aptitudetechnique et professionnelle-CATP) or a vocational diploma (diplôme d’aptitude professionnelle-DAP) from a Luxembourg technical secondaryschool;or have a manual skills certificate (certificat de capacité manuelle-CCM) or a certificate of vocational ability (certificat de capacité professionnelle-CCP) and proof of at least two years’ experience in the trade;or have a vocational initiation certificate from a technical secondary school (certificat d’initiation technique et professionnelle-CITP) and proof ofat least 5 years’ practical experience in the trade or profession; or, if he does not have a qualification, proof of at least 10 years’ practical professional experience (if a certificate exists for the requiredqualification); or provide proof of at least 6 years’ practical experience in a trade requiring a certain technical capacity and for which an official certificate is notissued for training.

If an employer fails to pay the specified minimum wage rate, he/she is liable to a fine of between € 251 and €25,000. In the event of repeated offences within a period of two years, these fines may be doubled.

sources: §222 of Labour Code 2006, last amended in 2013

Regular Pay

Salary is the direct compensation for work carried out by the employee for his employer. It may consist of various elements in cash or in kind. The benefits in kind include provision by the employer of the food, meal vouchers (tickets for restaurant), housing, company transport, etc.

The value of benefits in kind can be freely determined by the employer and employee in the employment contract. The value of benefits in kind must be clearly mentioned in the employment contract.

The frequency of wage payments can be set under an employment contract however salary has to be paid every month, at the latest on the last day of calendar month for work performed during that month. The wage payment must be accompanied by a pay slip. The document (pay slip) must clearly mention the exact amount and detailed method of calculating wages expressing in particular the work period and the total number of hours of work equal to the wages paid, the rate of pay for hours worked and any other payment in cash or in kind.   

At the termination of employment contract, the salary statement must be provided to the worker and wage/salary still due must be paid within 5 days of termination of an employment contract.

sources: §121-4, 125-7 & 222-1 of Labour Code 2006, last amended in 2013