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COVID-19 EU PolicyWatch

Database of national-level responses

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

Factsheet for case LU-2021-1/1669 – measures in Luxembourg

Compensation for the increase in minimum wage in the context of COVID-19

Compensation de l’augmentation du salaire social minimum dans le contexte de la pandémie de Covid-19

Country Luxembourg , applies nationwide
Time period Temporary, 01 January 2021 – 30 June 2021
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Adrien Thomas (LISER)
Case created 07 January 2021 (updated 18 January 2021)

Background information

In the context of the COVID-19 pandemic, the government decided to step up support for businesses by setting up a new financial assistance for companies in the sectors most seriously affected by the pandemic and whose financial situation makes it difficult to bear the burden resulting from the increase in the minimum social salary scheduled for 1 January 2021. Legal basis: law from 19 December 2020 modifying Article L.222-9 of the Labour Code.

Content of measure

The aid takes the form of a single lump sum payment of up to €500 per employee, whose monthly remuneration is higher than and or identical to the minimum social wage and less than or equal to the qualified minimum social wage. The law from 19 December 2020 takes into account employees who were hired before December 31, 2020 and who were in employment between 1 January 2021 and 30 June 2021. The aid is destined to the sectors most affected by the COVID-19 pandemic, namely tourism, events, culture, hospitality, entertainment, retail as well as continuing vocational training organizations.

Use of measure

No information available for the moment.

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

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

Trade unions Employers' organisations
Role Consulted Consulted
Form Any other form of consultation, institutionalised (as stable working groups or committees) or informal Any other form of consultation, institutionalised (as stable working groups or committees) or informal

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

  • No involvement
  • Main level of involvement: Unknown

Involvement

The Chamber of wage earners (CSL, Chambre des salariés) and the Chamber of Commerce (Chambre de commerce) and the Chamber of Crafts (Chambre des métiers) took position on the law during its discussion phase.

Views and reactions

The Chamber of Wage Earners supported the measure compensating the raise of the minimum wage provided it stays a one-shot measure. The Chamber of Commerce and the Chamber of Crafts criticized in a joint statement the principle of the raise of the minimum wage in a context where many companies are hard-hit by the crisis triggered by the COVID-19 pandemic and asked for compensation measures for the raise of the minimum wage that would be paid out to all companies.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles G47 Retail trade, except of motor vehicles and motorcycles
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities
      R - Arts, Entertainment And Recreation R90 Creative, arts and entertainment activities
      R93 Sports activities and amusement and recreation activities

This case is not occupation-specific.

Sources

  • 20 November 2020: Renforcement des mesures de soutien aux entreprises touchées par la pandémie de COVID-19 (meco.gouvernement.lu)
  • 20 November 2020: Aide de compensation de l’augmentation du salaire social minimum
  • 02 December 2020: Avis commun de la Chambre de Commerce et de la Chambre des Métiers (www.cc.lu)
  • 04 December 2020: Aide de compensation de l’augmentation du salaire social minimum

Citation

Eurofound (2021), Compensation for the increase in minimum wage in the context of COVID-19 , case LU-2021-1/1669 (measures in Luxembourg), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

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