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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure LU-2020-12/435 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

Country Luxembourg , applies nationwide
Time period Temporary, 15 March 2020 – 31 December 2021
Context COVID-19
Type Bipartite collective agreements
Category Employment protection and retention
– Income support for people in employment (e.g., short-time work)
Author Patrick Thill (LISER) and Eurofound
Measure added 09 April 2020 (updated 31 May 2022)

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).


The following updates to this measure have been made after it came into effect.

04 June 2021

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).

13 July 2020

The measure has been extended until 31 December 2020 and applies to the new measure concerning short-time work in particularly vulnerable sectors.

Use of measure

  • Number of people who benefited from the scheme: 375,196 (March to June 2020)
  • Number of businesses that have benefited: 14,810 (March to June 2020)
  • Cost of the scheme: €463m (March to June 2020) [source: Ministère de l’Economie, mai 2021:


  • Income protection
  • Other topics

Target groups

Workers Businesses Citizens
Employees in standard employment
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Trade unions
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level


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.



Eurofound (2020), New agreement on partial unemployment establishes minimum social wage for unskilled worker as new compensation floor, measure LU-2020-12/435 (measures in Luxembourg), EU PolicyWatch, Dublin,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.