Managing employees, cross-border workers and human resources
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The government announced that as of 20th April 2020, masks (or alternative face protections) are mandatory when going outside when the required interpersonal minimum distance of 2 meters cannot be guaranteed. This measure is also applicable in the work environment.

On 17th April 2020, a new grand-ducal regulation introducing a series of health and safety measures to fight against Covid-19 entered into force. Amongst others, this regulation provides that:

  • Employers have a responsibility to safeguard the health and safety of their employees. In this sense, employers must make sure that appropriate measures are taken to mitigate the risks for employees in the specific Covid-19 situation.
  • Employers must provide individual protection equipment (face masks or alternative face protections) to their employees when necessary and ensure that masks are effectively worn when the situation so requires.
  • Employers must work in close collaboration with the staff delegation (where elected) to inform their employees about the safety rules in force in the company by appropriate means, for example by posting clear instructions, internal regulations, and/or eventual penalties for health and safety breaches. Employees must also be trained on safety and the correct use of equipment provided.
    Clients should also be informed of the safety rules applicable in the company’s premises.
  • Employers must ensure that the premises are cleaned regularly and that work surfaces are cleaned and disinfected.

The Grand-Ducal regulation of 17 April 2020 remained into force until the end of the emergency on 24 June 2020 at midnight. Although this Grand-Ducal Regulation and the sanctions included therein are no longer applicable since 25 June 2020, these provisions are nevertheless still advisable in order to satisfy the general obligation to protect the health of employees.

Five free masks per employees have been distributed to employers in calendar week 17. In case no additional masks are available in the coming weeks, alternative masks are also allowed, please find below a brochure from the Health Directorate about wearing a mask as an additional barrier measure.

Useful links:

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

As a general rule, employment income is taxable in the employee’s country of residence, unless the employment is exercised in another country. For cross-border commuters (i.e. employees residing in France, Germany or Belgium and commuting to Luxembourg to carry out employment-related activities), this means that their employment income is taxable in Luxembourg (and not in their country of residence). Depending on the employee’s country of residence (France, Germany or Belgium), different tax thresholds will apply under which income from employment should remain taxable in Luxembourg despite activities being physically exercised elsewhere (either in the employee’s country of residence or in any third country).
Thus, taxation in the employee’s country of residence should not occur where the number of days worked outside of Luxembourg does not exceed:

  • 29 days per year for France
  • 19 days per year for Germany
  • 24 days per year for Belgium.

Under a mutual agreement between the competent authorities in Luxembourg and France dated 16 July 2020 concerning cross-border workers in the context of the COVID-19 crisis followed by a press release of the Luxembourg Ministry of Finance on 25 August 2020, the 29-day rule applicable to French residents working from home shall not apply to the period 14 March 2020 – 31 December 2020. In a separate mutual agreement dated 16 July 2020 concerning the detailed rules of application of point 3 of the protocol to the tax treaty between France and Luxembourg, those authorities also stated that social security payments by the respective countries shall be taxable only in the jurisdiction from which they originate (by application of Article 17 para. 2 of the tax treaty).

For German cross-border commuters, on the basis of a consultation agreement signed on 3 April 2020 between Germany and Luxembourg (the “Consultation Agreement”), days teleworked from Germany due to the impact of COVID-19 that would otherwise have been spent in Luxembourg can receive the same tax treatment as days worked in Luxembourg. This means that the days on which employees resident in Germany telework from home may not need to be counted toward the 19-day limit. In particular, the following aspects of the Consultation Agreement should be noted:

  • Employed persons wishing to use the above-mentioned fictitious treatment (i.e. fictitious allocation of teleworking days to Luxembourg while the COVID-19 situation persists) are required to maintain appropriate documentation. In addition, the employment income allocated to Luxembourg must actually be taxed in Luxembourg, meaning that it must be included in the tax base for determining the employee’s Luxembourg tax liability. Finally, the employee shall be viewed as having consented to the taxation of this employment income in Luxembourg.
  • Such fictitious treatment cannot be used where, irrespective of COVID-19, home working days would have been spent in Germany or any country other than Luxembourg (e.g. where an employee already conducts their activities in Germany/from their home office as per the terms of their contract).
  • Germany and Luxembourg have agreed that payments made pursuant to the rules governing short-time work in Germany (Kurzarbeitergeld) and in Luxembourg (chômage partiel) qualify as social security payments by the respective country within the meaning of article 17 para. 2 of the double tax treaty between Germany and Luxembourg.
  • The Consultation Agreement came into force on 4 April 2020 and is applicable with respect to working days between 11 March 2020 and 30 April 2020. Its period of application will automatically be extended to the following month if neither Germany nor Luxembourg terminate it, respecting a notice period of one week before the end of each month. As Germany and Luxembourg did not terminate their agreement one week before 31 August 2020, it is extended de facto until 31 September 2020.

For Belgian cross-border commuters, on the basis of an agreement signed on 19 May 2020 between Belgium and Luxembourg, days teleworked from Belgium due to the impact of COVID-19 that would otherwise have been spent in Luxembourg can receive the same tax treatment as days worked in Luxembourg. This means that the days on which employees resident in Belgium telework from home may not need to be counted toward the 24-day limit. Such fictitious treatment cannot be used where, irrespective of COVID-19, home working days would have been spent in Belgium or any country other than Luxembourg. Cross-border workers who make use of this fictitious treatment are required to apply it consistently in both contracting States and to maintain appropriate documentation. In addition, the employment income allocated to Luxembourg must actually be taxed in Luxembourg, meaning that it must be included in the tax base for determining the employee’s Luxembourg tax liability. Following its second extension, the agreement is applicable with respect to working days between 11 March 2020 and 31 December 2020.

Your contact for more details: EmpCrisis@arendt.com
(26/08/20)

According to the determination of the social security legislation applicable in the context of an occupation on the territory of two or more European Member States, employees are, in general, affiliated with the social security of the country where they are employed except if they carry out a substantial part of their work (i.e. at least 25%) in their country of residence. In this scenario, they must be affiliated with the social security system of their country of residence.

The Luxembourg authorities have negotiated with their counterparts from neighbouring countries regarding the determination of the social security legislation applicable in the context of an occupation on the territory of two or more Member States. It has been agreed that remote-work performed during the Covid-19 crisis shall not be taken into account for the above 25% threshold for determining the applicable legislation.

Your contact for more details: EmpCrisis@arendt.com
(06/04/20)

  • Since 15th May 2020, the German government decided to reopen the frontiers with Luxembourg. Certificates are therefore no longer required for German residents crossing the border to work in Luxembourg.

 

  • Since 11th March 2020, the 19-day taxation threshold applicable to German residents working from home is suspended. The specific implementing provisions are detailed in the Consultation Agreement which came into force on 4th April 2020. As the Consultation Agreement has not been terminated by either Germany or Luxembourg with a one week notice period before the end of the month, the suspension is automatically extended until 30th September 2020.

 

  • Following negotiations between the Luxembourg authorities and their neighbouring counterparts, it has been decided that remote-work performed during the Covid-19 crisis shall not be taken into account for the 25% threshold for determining the applicable social security legislation.

 

  • Our dedicated tax and employment law teams remain available to address your specific questions as a case-by-case analysis is in all circumstances recommended for cross-border constellations and in particular as the ever-evolving Covid-19 situation continues to add complexity.

 

Your contact for more details: EmpCrisis@arendt.com
(01/09/20)

  • Since 15th June 2020, the French government decided to reopen the frontiers with Luxembourg. Certificates are therefore no longer required for French cross border workers.

 

  • Since 14th March 2020, the presence of an employee at home for performing his/her employment activities, may not be taken into account in the calculation of the 29 days’ taxation threshold. France and Luxembourg recently agreed that this suspension will be applicable until 31st December 2020.

 

  • Following negotiations between the Luxembourg authorities and their neighbouring counterparts, it has been decided that remote-work performed during the Covid-19 crisis shall not be taken into account for the 25% threshold for determining the applicable social security legislation.

 

  • Our dedicated tax and employment law teams remain available to address your specific questions as a case-by-case analysis is in all circumstances recommended for cross-border constellations and in particular as the ever-evolving Covid-19 situation continues to add complexity.

Your contact for more details: EmpCrisis@arendt.com
(01/09/20)

  • Since 15th June 2020, the Belgian government decided to reopen the frontiers with Luxembourg. Certificates are therefore no longer required for Belgian cross border workers.

 

  • Since 14th March 2020, no day is to be counted under the 24-day taxation threshold applicable with respect to Belgium for Belgian residents working from home. Following a recent agreement between Belgium and Luxembourg, this measure will be effective until 31st December 2020.

 

  • Following negotiations between the Luxembourg authorities and their neighbouring counterparts, it has been decided that remote-work performed during the Covid-19 crisis shall not be taken into account for the 25% threshold for determining the applicable social security legislation.

 

  • Our dedicated tax and employment law teams remain available to address your specific questions as a case-by-case analysis is in all circumstances recommended for cross-border constellations and in particular as the ever-evolving Covid-19 situation continues to add complexity.

 

Your contact for more details: EmpCrisis@arendt.com
(01/09/20)

Current government guidelines state that people should continue to work from home if they are in a position to do so. However, such statement now constitutes mere guidance, and employers may in general request their employees to return to the office (exceptions and procedures to be analysed on a case by case basis).

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

Employees and self-employed persons with children under 13 years of age and who did not have other childcare possibilities were entitled to extended days of leave for family reasons until the 15th July 2020.

Leave for family reasons was extended until 15th July 2020 for:

  • parents with children born on or after 1st September 2015;
  • parents of children under 13 years old who cannot attend school or childcare structures for reasons directly linked to the health crisis, in which case a certificate issued by the Ministry of Education, Children and Youth attesting the situation must be produced; and
  • parents with children whose child is considered vulnerable.

In addition, employees with disabled children between 13-18 years of age could also benefit from the extended leave for family reasons.

Since 16th July 2020, the exceptional leave for family reasons granted during the emergency state and extended afterwards until 15th July 2020 included is no longer available. The regular leave for family reasons provided for in the Labour Code remains applicable.

Your contact for more details: EmpCrisis@arendt.com
(27/07/20)

A new law of 20 June 2020 prolonged the paid family support leave that has been introduced during the emergency state. This leave aims at supporting employees and self-employed persons who are not in position to work anymore because they need to care of disabled or elderly persons after the closing of their specific caring structures due to the Covid-19 pandemic. Concerned employees are protected against dismissal during family support leave. This paid family support leave will be available until 20 November 2020.

The specific form below must be completed and sent to the Ministry of Family along with the necessary supporting documents.

New Certificate requesting family support leave

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

The government has imposed sanctions in the event of non-compliance with social distancing measures such as limitation of gatherings and the obligation to wear a mask (or alternative face protection) – notably fines ranging from EUR 25.- to EUR 500.- . For companies receiving public, cultural and/or sportive activities, non-compliance with the implementation of specific measures to fight Covid-19 is punished by an administrative fine of EUR 4.000.- increasing to EUR 8.000.- in case of recurrence. In addition, companies may be closed administratively until 30th September 2020.

Your contact for more details: EmpCrisis@arendt.com
(27/07/20)

Various measures have been implemented in Luxembourg to support businesses during this difficult period. Among such measures is the possibility for companies, under certain conditions, to resort to short-time working schemes (chômage partiel) depending on the nature of the difficulties encountered and under certain conditions to protect employment and prevent dismissals for economic reasons.

There is a specific short-time working scheme in case of force majeure, that can be applied to employees who are not covered by a medical certificate of incapacity for work and who can no longer be employed at all or can no longer be employed on a full-time basis, when the company cannot ensure the continuation of its normal economic activity, for reasons related to the Coronavirus, or if there is a significant drop in demand from customers or users due to the Coronavirus. It applies in principle to all economic sectors where the causes of economic difficulties are directly related to the Coronavirus.

If the Employment Fund (Fonds pour l’emploi) accepts an employer’s request to benefit from a short-time working scheme, 80 % of the salaries normally received by the employees (capped at 250 % of the minimum wage for an unskilled worker) during the non-work periods with a maximum of 1.022 hours per employee and per year will be covered. In order to apply for the scheme, an online application must be introduced.

The government confirmed that partial unemployment will be maintained until 31st December 2020 and that no employee will receive less than the social minimum wage during partial unemployment.

In addition, after the end of the emergency state scheduled for 24 June 2020, companies will be able to continue to apply for short-time work but with new terms and conditions. Four options (described under point 12 below) to apply for short-time work will be accessible to companies (these options will be further detailed in a forthcoming bill).

Useful links:

Your contact for more details: EmpCrisis@arendt.com
(12/06/20)

  • During the emergency state, two different procedures were available for companies:

a) a fast-track procedure for companies directly impacted by a government decision

b) a "force majeure / coronavirus" partial unemployment scheme

For both of the abovementioned procedures, in the event of an agreement by the authorities, the Employment Fund (Fonds pour l’emploi) covers 80% of the salaries normally received by the employees (which is capped at 250% of the minimum wage for an unskilled worker (i.e. EUR 5,345.98 gross (EUR 2,141.99 x 2.5)) during the non-work periods with a maximum of 1.022 non-working hours per employee and per year (pro-rated for part-time employees).

An agreement between the Government and the presidents of the OGBL and LCGB trade unions, approved by the Government Council, provides that in case of partial unemployment, the compensation allowance (which in principle corresponds to 80% of the normal reference wage capped at 250% of the social minimum wage for unskilled employees) cannot be less than the amount of the social minimum wage for unskilled employees. Any difference between the amount of the compensation indemnity and the minimum social minimum wage for unskilled workers will be borne by the Employment Fund (Fonds pour l’emploi).

The government confirmed that partial unemployment will be maintained until 31st December 2020 and that no employee will receive less than the social minimum wage during partial unemployment.

  • With the end of the state of emergency on 24 June 2020, the emergency measures put in place to assist companies through a special "force majeure COVID-19" short-time working mechanism expired.

The Social Partners and the Government recognised that certain sectors have been more severely affected by the health crisis, it has therefore been agreed to continue to support Luxembourg companies with four new options:

  1. Industrial companies will continue to benefit from the short-time working scheme in order to be able to react to disruptions on international markets. In applying the short-time working scheme, industrial firms undertake not to make staff redundant for economic reasons.

  2. Companies in the HORECA sector will benefit from accelerated access to partial unemployment from structural sources, with no limit on the number of employees entitled to it. In case of proven need, these companies will have the right to proceed with economic redundancies up to a maximum limit of 25% of the workforce until 31 December 2020. If the situation improves, companies that have made redundancies must, in the event of subsequent recruitment of staff, give priority to re-employing their former employees who have been made redundant.

  3. Firms affected by the health crisis, other than industrial firms and those in vulnerable sectors, will also be able to have recourse to short-time working from a structural source through the accelerated procedure, provided that they do not make redundancies. In this case, however, the number of employees covered by short-time working may not exceed 25% of the workforce for the months of July and August, 20% for the months of September and October and 15% for the months of November and December.

  4. Finally, applications from companies in vulnerable sectors making more than 25% of their workforce redundant, as well as those from all other companies proceeding to redundancies, will be required to submit a so-called "traditional" short-time working application which can be granted only if the companies draw up restructuring plans. These plans will be drawn up in the form of a recovery plan in the case of small firms with less than 15 employees.

Online applications covering these new short-time work options are currently being developed. A law detailing the measures will also have to be adopted in the next few days.

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

During the emergency state, the Social Security Centre (CCSS) paid an advance on the financial compensation for extraordinary family leave granted to parents of children who could not attend school due to the closing of lower, secondary and higher education structures as well as childcare facilities (crèches and day care centres).

As of 1st July 2020, employers will no longer benefit from the advance on the financial compensation for extraordinary family leave. The CCSS will proceed with the normal reimbursement procedure.

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

For employees on sick leave, the principle of salary maintenance by the employer (until the end of the month in which the 77th day of illness falls) was suspended during the state of emergency. By way of exception, the Luxembourg State sickness and maternity insurance will cover the sickness benefits to be paid to employees and self-employed persons from 1st April 2020 until the end of June.

In addition, between 18th March 2020 and the end of the emergency state, the computation of the 78 weeks period during which sick leave indemnities are paid to employees was suspended as well.

Furthermore, the Grand-Ducal regulation of 8th April 2020 provided that the computation of the 26 weeks period of sick leave during which employees are protected against dismissal was suspended until the day following the end of the emergency state. On 17th April 2020, a new Grand-Ducal regulation modified the applicable regime and provided that the computation of the 26 weeks period of sick leave during which employees are protected against dismissal was extended by the duration of the period between the 8th April 2020 and the end of the emergency state. As of the first day of the 27th week of protection against dismissal, dismissals with immediate effect (for serious reasons) are however authorised.

On 25th June 2020 the computation of the 26 weeks period of sick leave during which employees are protected against dismissal resumed.

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

  • From April 2020, the Social Security Centre (CCSS) suspended:
    • the calculation of default interest for late payments;
    • the procedure for the forced recovery of contributions;
    • the enforcement of constraints by bailiffs; and
    • fines against employers who are late in filing their declarations to be made to the CCSS.

  • This will allow employers and self-employed persons who find themselves in a financially precarious situation to better manage the payment of their social security contributions in the coming weeks, without having to fear administrative sanctions.

  • All social contributions remain nonetheless due.

  • These measures will continue until the CCSS Board of Directors finds that they are no longer justified.

The government announced that the calculation of default interest for late payments will be suspended until 31st December 2020.

Your contact for more details: EmpCrisis@arendt.com
(02/06/20)

On 27th March 2020, a grand-ducal regulation introduced a derogation from Article L. 211-12 of the Labour Code, meaning that as of this date, the maximum working time might be extended to 12 hours per day, 60 hours per week for activities essential for the maintenance of the vital interests of the population and of the country as listed in the Annex to this Grand-Ducal Regulation. To benefit from this extension of the maximum working time, a duly motivated request was to be introduced to the Ministry of Labour, Employment and Social and Solidarity Economy. The request could be sent by electronic means and must have been clearly limited to what is indispensable and strictly necessary. It must in all cases have been adequate and proportionate to the aim pursued. The Ministry partially or fully authorised this measure based on the motivated request submitted.

Following the end of the emergency state, derogations from the maximum working hours are not authorised anymore.

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

On 1st April 2020, several Grand-Ducal regulations derogating from the Labour Code entered into force. These grand-ducal regulations were intended to suspend various employment-related time limits or periods foreseen by the Labour Code (regarding amongst others probationary periods and collective dismissals). These suspension measures were applicable until the end of the emergency state.

Following the end of the emergency state, on 25 June 2020 employment-related limits or periods which were suspended during the emergency state resumed.

Your contact for more details: EmpCrisis@arendt.com
(01/07/20)

During the emergency state, employers in sectors that were listed in the grand-ducal regulation of 3rd April 2020 as essential to the maintenance of the vital interests of the population and the country could refuse requests for leave and cancel leave already accepted. Since 6th May 2020, employers can no longer refuse leave requests without reasons related to the needs of service or justified desires of other employees nor cancel leave already granted.

Your contact for more details: EmpCrisis@arendt.com
(15/05/20)

As a rule, temperature screening should not be an employer’s only response to the COVID-19 outbreak and employees should be encouraged to work from home to the maximum extent possible. Nevertheless, in view of the latest communications from the Luxembourg government and the planned phasing-in of an end to quarantine, employees will progressively be returning to the workplace.

As employers have an obligation to ensure the health and safety of their employees and the security of their workplace, stakeholders may wonder whether is it permissible to take employees’ temperatures for the purpose of granting or denying access to business premises.

We would like to highlight that this question requires an analysis of the particular facts of each situation. Luxembourg data protection rules and requirements must always be taken into account in so far as the employer will gain access to personal information as a result of the screening (e.g. the employee’s work location, either on-site or from home).

In accordance with the CNPD’s recent recommendations (1), merely reading body temperature taking at the entrance of a site does not qualify as an instance of processing personal data, as long as this reading does not entail, or is not linked to any additional record or processing of personal data.

Similarly, the use of thermal cameras is allowed as long as it does not allow the identification of employees, agents or visitors and is not linked to any recording or re-using of the images.

However, the CNPD considers that this would be different if the employer (i) creates a file containing all the monitored temperatures as well as identification data of the monitored persons, or (ii) could consult the images recorded by the thermal cameras and identify the data subjects. This would indeed be a disproportionate processing of data, which would not comply with the principle of data minimization, insofar as the employer could have implemented less invasive means to protect the employees’ and visitors’ privacy.

Those recommendations follow the French and Belgian data protection authorities’ guidelines (2)(3).

Your contacts for more details: Astrid Wagner (astrid.wagner@arendt.com) and Faustine Cachera (faustine.cachera@arendt.com)
(24/06/20)

Useful links:

(1) CNPD: Coronavirus (covid-19): recommandations de la CNPD relatives à la collecte de données personnelles dans un contexte de crise sanitaire

(2) COVID-19 et le traitement de données à caractère personnel sur le lieu de travail.

(3) Coronavirus (COVID-19) : les rappels de la CNIL sur la collecte de données personnelles par les employeurs