Here you will find all the latest news about HR management in Luxembourg!
Rental allowance: new tax-exempt allowance
As of 1 June 2024, employers have henceforth another option to attract young talents through a new tax exemption method!
The latest little addition to Article 115 of the Income Tax Act? The rental allowance!
In practice, this means that employers can now pay a monthly allowance to a young employee who is renting
his or her primary residence.
Certain conditions must nonetheless be met in order to be eligible:
- The amount of the allowance is limited to the rent exclusive of the charges paid by the employee;
- The allowance is capped at €1,000 per month;
- The tax exemption is 25% of the allowance amount (less the social security share);
- The employee must be under 30 years old at the beginning of the tax year;
- The annual gross salary, exclusive of the rental allowance, must not exceed 30 times the qualified minimum social wage, which is €92,553.30 at this time (index 944.43). In case of an incomplete year, the employer must extrapolate the salary over a full year in order to check the aforementioned threshold.
Moreover, in case of part-time work or an incomplete month according to the hours declared to the Common Social Security Centre (Centre commun de la sécurité sociale – CCSS), the allowance cap must be prorated.
Furthermore, in the event of a tax split, i.e. where the taxable salary is split between the different countries where the employee works, the exemption must be allocated according to the days worked and taxable in Luxembourg and the days worked abroad during the month in which the allowance is paid.
Finally, it is important to point out that it is the employer’s responsibility to verify that the conditions for the exemption are met before making the payment.
Collective labour agreement for insurance companies 2024-2026: signed at long last!
Signed on 4 June, after several months of negotiations, the new Collective Labor Agreement signed by and between the Association of Insurance and Reinsurance Companies and the trade unions has unveiled several new elements that should delight employees in the sector!
The new benefits introduced by the agreement include the following new bonuses:
- An economic situation bonus for employees in service on 15 June for the next three years;
- An exceptional “attractiveness” bonus for an overall amount of €1,300€ to be paid in three instalments(€500/€400/€400) over the coming years;
- The starting scales for new employees will be raised;
- Levels 1 and 2 are adjusted for all employees;
- 2 hours of the 40-hour training credit will now be dedicated to occupational health and the prevention of psychosocial risks;
- The training hours required for the professional development bonus will be reduced;
- The health representative will be granted credit hours to perform his or her duties.
Employers and employees will thus find some measures, especially the bonuses, directly on their remuneration as of this June!
Directive in transparent and predictable working conditions in the european union to enter info force soon.
Directive (EU) 2019/1152 on transparent and predictable working conditions in the EU will soon be transposed into Luxembourgish law.
This directive increases the information obligations of employers. It requires all companies established in Europe to provide employees, apprentices, temporary workers, students/pupils, and seafarers with expanded and detailed information concerning them.
It also strengthens working conditions by promoting more transparent and stable employment, notably by making it possible to transition from a fixed-term contract to an open-ended contract and from part-time to full-time employment and vice versa.
Protection against retaliation, as well as effective and proportionate sanctions will also be introduced through this bill.
Employment contracts will in all likelihood have to be recast accordingly so as to comply with the new European and Luxembourgish requirements.
European blue card: relaxation of conditions for accessing the highly skilled worker status.
Following the adoption of a new law on 4 June 2024, certain provisions will as of 1 July 2024 relax the rules for accessing the highly skilled worker status.
More specifically, the minimum term of the employment contract is reduced to 6 months (previously 1 year), and the minimum salary requirement is 1 time the average annual gross salary for all professional categories (instead of 1.5 or 1.2 times the minimum annual gross salary), currently equivalent to €58,968 (index 944.43).
Moreover, access to the labour market is now limited to only the first 12 months (instead of the initial 24 months) by the requirement to inform the Minister for Immigration of any changes in the employee’s professional situation. A 30-day period has however been added to examine whether the holder of the European Blue Card still meets the conditions for admission. The Minister can therefore still oppose the change of employment during the first year.
The new law moreover provides that these highly skilled employees may travel and work more easily in other EU member states.
- For short-term international mobility, this includes in particular the right to enter Luxembourg and stay there for professional purposes for 90 days within a 180-day period using the European blue card issued by another country.
- For long-term international mobility, holders of a European blue card issued in a first member state are authorised to move to a second member state after only 12 months of legal stay in the first member state.
DEMDET (request for certificate in case of secondment abroad) and framework agreement: end of the transition period.
Since 1 July 2023, the framework agreement on teleworking has allowed teleworkers who work between 25% and less than 50% of their working time in their country of residence to remain subject to the social security of their employment state under certain conditions, and thus to work more days from home.
The framework agreement thereby gives Luxembourgish employers the option to ask their non-resident employees to telework up to 49% while remaining affiliated with the Luxembourgish social security system. The 49% limit is therefore not automatic. It must be requested from the Common Social Security Centre through a declaration procedure, either on paper or via SECUline (the DEMDET procedure)!
As regards said framework agreement, the Common Social Security Centre points out that the transitional period for retroactive declarations for 12 months ended on 30 June 2024.
As of 1 July 2024, the framework agreement can only be applied for retroactively for a period of 3 months.
Fake work incapacity certificates
Attention !
It would appear that work incapacity certificates can be ordered on online platforms without consultation or examination by a doctor.
Such certificates are therefore fake that the CNS [National Health Fund] will reject if acquired online without personal contact with a doctor.
No monetary compensation will be paid, and the employer will be informed.
As to consequences under labour law, the insured person using such certificates may be liable to a fine and legal action by the CNS.
Apprenticeship contracts: now is the time to sign!
Apprenticeship entails vocational training that includes periods of school-based training as well as practical training in a professional environment.
It prepares apprentices for various diplomas and exists in two forms:
- Initial apprenticeship, which concerns minors who are at least 15 years old;
- Adult apprenticeship, which concerns adults to enable them to complete, finish, or acquire vocational training through an alternating apprenticeship system.
To hire individuals under this contract form, employers had to send apprenticeship job declarations to the vocational guidance service of the ADEM [National Employment Agency] starting in March, and the apprenticeship contracts must be concluded between now and 1 November!
