Here you will find all the latest news about HR management in Luxembourg!
1/Upcoming changes to Sunday working regulations
3/Annual leave 2025: the end of the year is drawing near
4/Residence and work permits for third-country nationals: new rules in preparation?
5/Key points regarding French medical certificates
6/Recruitment in 2025: the “young employee” bonus can be activated for the first time
1 – Upcoming changes to Sunday working regulations
Two bills currently under discussion have recently been amended again by the government: one aiming to extend Sunday working hours to 8 hours, and the other to revise retail opening hours.
Sunday working hours
Currently capped at 4 hours, Sunday working time may be extended to 8 hours, which would constitute an absolute limit that could not be exceeded. This measure seeks to offer greater flexibility to businesses while responding to requests from certain employees.
The proposed arrangements vary depending on company size:
- Fewer than 30 employees: businesses may require staff to work up to 8 hours on Sundays without special conditions.
- More than 30 employees: a collective bargaining agreement or union accord will be required to exceed the current 4-hour limit.
- Maintained exception: large companies without a collective bargaining agreement may still require up to 8 hours of Sunday work on six occasions per year (e.g. “Mantelsonndeg,” clearance sales, year-end festivities, etc.), subject to ministerial authorisation.
The bill also maintains the 70% wage premium for all hours worked on Sundays, in line with current provisions.
The new rules are scheduled to take effect on 1 January 2026.
Retail opening hours
The second bill proposes revised retail opening hours with the following provisions.
- Monday to Friday: shops may open from 5 am to 9 pm without restriction. An extension to 1 am is possible via collective bargaining agreement or interprofessional accord.
- Saturdays and Sundays: standard hours remain 5 am to 7 pm. As during weekdays, an extension to 1 am is possible via collective bargaining agreement or interprofessional accord.
- Essential services: shops selling food, hygiene products, or fuel may open 24/7 with a collective bargaining or interprofessional accord.
- Exemption: street markets and clearance sales are excluded from the act’s scope, allowing unrestricted hours during such occasional events.
2 – Pension reform
In recent weeks, the pension reform has sparked significant public debate and strong reactions. Two draft bills were finally submitted to the Chamber of Deputies in mid-October. Among the proposed measures are the following:
- As of 2026, the overall contribution rate to the pension scheme will increase from 24% to 25.5%. This increase will be shared equally between employees, employers, and the State, each contributing 8.5% (compared to 8% under the current scheme).
- The statutory retirement age will remain set at 65 years.
- Starting in 2026, the conditions for early retirement at age 60 will gradually change. The aim is to bring the effective retirement age closer to the statutory age. Specifically, contributors will be required to complete an additional eight months by 2030: one extra month per year in 2026 and 2027, followed by two extra months per year from 2028 to 2030. The conditions for early retirement at age 57 will remain unchanged.
- To encourage individuals who already meet the requirements for early retirement but choose to continue working beyond that point, a monthly tax allowance of €750 will be granted.
- A new phased retirement scheme will be introduced, allowing employees, under certain conditions, to reduce their working hours while receiving a partial pension benefit.
3 – Annual leave 2025: the end of the year is drawing near
As the year draws to a close, it is useful to recall the rules governing the deferral of paid annual leave. In principle, annual leave must be fully granted and taken within the current calendar year. However, in certain cases and under specific conditions, it may be carried over beyond 31 December.
By way of exception, annual leave may be carried over beyond 31 December of the current year in the following four cases:
- Annual leave accrued during an employee’s first year of service may be carried over until 31 December of the following year. To do so, the employee must submit a request to their employer, who may not refuse the carry-over.
- Leave not taken by year-end due to operational requirements or justified requests from other employees may be carried over until 31 March of the following year.
- Annual leave not taken by a pregnant employee at the start of her maternity leave may be carried over to the following year, typically until 31 March. The same applies to adoption leave and parental leave.
- Following a ruling by the Court of Justice of the European Union (CJEU; “Schultz-Hoff”; 20 January 2009), an employee affected by a long period of illness must no longer lose their entitlement to annual leave. If unable to take their leave during the year in which it is due owing to incapacity for work, the employee is entitled to carry it over to the following year.
Nevertheless, the employer remains entitled to implement a more flexible system for carrying over annual leave (for example: unlimited carry-over of leave days from one year to the next; establishment of a time savings account).
When the employer records the carry-over of unused leave hours from one year to the next on payslips, this carry-over is presumed to be unlimited. Unused leave may then be taken up until 31 December.
However, the fact that the employer has granted a one-off carry-over of leave days until 31 March of the following year should not be interpreted as a company practice of systematically carrying over unused leave to the next year.
4 – Residence and work permits for third-country nationals: new rules in preparation?
A bill was submitted this summer to transpose European Directive (EU) 2024/1233 into Luxembourgish law. The directive’s primary aim is to simplify and harmonise procedures for residence and employment of third-country nationals within the European Union. Transposition is expected by 21 May 2026.
The bill outlines several key measures regarding the conditions for the issuance of permits and the rights of affected workers:
– Faster processing of applications, with a decision deadline of 90 days for complete permit requests, reduced from four months previously. An extension of 30 days is possible for complex cases.
– Simplified procedure for changing employer:
In Luxembourg, changing employer within the first two years of legal residence remains regulated.
It is subject to:
- Prior notification to the competent immigration authorities;
- A requirement to work for at least six months with the initial employer;
- Submission of an ADEM certificate confirming completion of the labour market test;
- Proof of appropriate professional qualifications and possession of an employment contract compliant with the Labour Code.
After the two-year period, the worker may change employer freely.
– Greater protection for permit holders facing job loss:Unemployment consequently is not, in and of itself, grounds for permit withdrawal, provided the total duration does not exceed three months during the permit’s validity. This period is extended to six months for third-country nationals who have held the permit for more than two years.
5 – Key points regarding French Medical certificates
A major change now affects all insured persons who consult a doctor in France and are issued a medical certificate for sick leave. Since 1 September 2025, Luxembourg’s National Health Fund (CNS) no longer accepts outdated, unsecured French forms.
In fact, as of 1 July 2025, only the secure Cerfa form is valid in France. It includes security features such as holograms and magnetic ink. From 1 September 2025, French Health Insurance rejects any older forms, and the CNS in Luxembourg applies the same rule for any sick leave certified in France.
As an employer, it is important to inform your staff so as to avoid rejection of certificates and reimbursement claims. Unfortunately, the employer’s copy of the certificate does not allow verification of the form’s validity, but the CNS will contact you if necessary.
6 – Recruitment in 2025: the “young employee” bonus can be activated for the first time
In 2025, a new bonus was introduced to support employees at the start of their careers. As the year draws to a close—or even in 2026—it is not too late to offer this benefit to your young recruits.
To recap, the bonus is 75% tax-exempt if the following conditions are met:
- The employee is under 30 years old at the start of the tax year;
- He or she holds a first permanent employment contract signed from 2025 onwards with an employer established in the Grand Duchy of Luxembourg, or abroad with a stable establishment in Luxembourg;
- He or she remains with the same employer for the duration of the bonus period, up to a maximum of five years.
Accordingly, the maximum annual bonus, based on full-time employment and eligible for exemption, is:
- €5,000 for a gross annual salary lower than or equal to €50,000;
- €3,750 for a gross annual salary lower than €50,000 and greater than or equal to €75,000;
- €2,500 for gross annual salary lower than €75,000 and greater than or equal to €100,000.
The gross annual salary refers to remuneration before inclusion of benefits in cash and in kind during the tax year in which the young employee bonus is granted.
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