Factsheet for measure
LU-2020-12/435
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Updated
– measures in Luxembourg
New agreement on partial unemployment establishes minimum social wage for unskilled worker as new compensation floor
Accord conclu dans le cadre de la lutte contre les conséquences économiques et sociales du COVID-19
Background information
The bi-partite agreement between the Ministry of Work, Employment, Social and Solidarity Economy and the two representative national trade unions OGBL and LCGB signed on 26 March 2020 implies a change in the law of 15 September 1975 defining the compensation rate for part-time unemployment/Règlement grand-ducal du 15 septembre 1975 portant fixation du taux d'indemnisation des chômeurs partiels (Mémorial A, Number 59, 22 September 1975) in the context of the current crisis. As the number of companies applying for partial unemployment has increased significantly since the outbreak of the crisis, the government decided to change the legal framework concerning compensation allowances as far as partial unemployment is concerned.
The agreement also underlines that the national employers' association UEL did not oppose to the bipartite agreement.
Content of measure
The bipartite agreement between the government and the two national trade unions provides that, if employers mobilise partial unemployment schemes with the objective to combat the economic and social consequences during the defined COVID-19 period, the compensation allowance which in principle corresponds to 80% of the normal reference salary capped at 250% the minimum social wage for unskilled workers must not be less than the amount of the minimum social wage for unskilled workers.
If there is a difference between the amount of the compensation allowance and the unqualified minimum social wage, the difference will be paid by the Employment Fund (Fonds pour l'Emploi).
Updates
The following updates to this measure have been made after it came into effect.
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04 June 2021
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For the duration of the health crisis, the short-time working allowance may not be less than the minimum social wage for unskilled workers (€2,201.93). This measure has been extended several times (to 31 December 2020, 30 June 2021 and 31 December 2021).
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13 July 2020
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The measure has been extended until 31 December 2020 and applies to the new measure concerning short-time work in particularly vulnerable sectors.
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Use of measure
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Number of people who benefited from the scheme: 375,196 (March to June 2020)
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Number of businesses that have benefited: 14,810 (March to June 2020)
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Cost of the scheme: €463m (March to June 2020)
[source: Ministère de l’Economie, mai 2021: https://meco.gouvernement.lu/fr/dossiers/2020/coronoavirus-entreprises.html
Contents
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Income protection
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Other topics
Target groups
Actors and funding
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Actors
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Funding
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National government
Trade unions
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Agreed (outcome) incl. social partner initiative
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Informed
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Social partners jointly
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Main level of involvement: Peak or cross-sectoral level
Involvement
greement between the Government and the trade unions in order not to leave the high number of employees affected by the crisis in a situation of partial unemployment with an income below the minimum wage
Views and reactions
The bi-partite agreement was negotiated and signed between the government and the two national representative trade unions OGBL and LCGB.
Sources
