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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-2021-1/1793 – measures in Luxembourg

Aid to compensate for the increase of the social minimum wage

Aide de compensation de l’augmentation du salaire social minimum

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 Patrick Thill (LISER) and Eurofound
Case created 22 March 2021 (updated 07 May 2021)

Background information

After the increase by 2.8% of the social minimum wage, the government has decided to help enterprises with a compensation aid: it is intended to support businesses in sectors that are the most severely affected by the COVID-19 pandemic and for which this new burden, resulting from the increase of the social minimum wage since 1 January 2021, is more difficult to overcome due to their financial situation. The aid takes the form of a one-off capital subsidy and is tax-exempt.

Sanction: A beneficiary of aid obtained on the basis of knowingly false or incomplete information shall be liable to a prison term and a fine in addition to being required to reimburse the aid received.

Content of measure

The aid is only aimed at businesses that carry out one or more of the activities listed below and that are active in the following sectors, more particularly:

  • businesses in the tourism sector;
  • businesses in the events sector;
  • the HORECA sector;
  • businesses in the culture and entertainment sector;
  • companies operating a retail trade in shops and similar businesses

The business must:

  • have been in activity before 31 December 2020;
  • hold a valid business permit (autorisation d'établissement) for said activity (issued by the General Directorate for Small and Medium-Sized Enterprises at the Ministry of the Economy);
  • be properly registered with the Joint Social Security Centre (CCSS);
  • be experiencing temporary financial difficulties that have a direct causal link with the COVID-19 pandemic.

The business must not have been convicted at least twice for violating the provisions prohibiting (illegal labour; or employment of non-EU illegal residents) within the last 4 years preceding the judgment of the competent court for a period of 3 years from the date of such judgment.

Use of measure

Not Known for the moment, but : The amount of aid is calculated by multiplying by €500 the number of employees concerned who are in employment during a period of one month between 1 January 2021 and 30 June 2021 and the aid may not exceed the amount of €200,000 per single company.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

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

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

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

  • No involvement
  • Main level of involvement: N/A


Not known - giving the interviews with them it seems that this measure (that follow the increase of minimum wage) has been taken by government only.

Views and reactions

No reaction but regrets that this aid and amount has not been discussed in tripartite meeting.

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
      N - Administrative And Support Service Activities N79 Travel agency, tour operator and other reservation service and related activities
      N82 Office administrative, office support and other business support activities
      R - Arts, Entertainment And Recreation R90 Creative, arts and entertainment activities
      R91 Libraries, archives, museums and other cultural activities

This case is not occupation-specific.


  • 19 December 2020: law of compensation aid for the increase of the social minimum wage in the context of COVID crisis (


Eurofound (2021), Aid to compensate for the increase of the social minimum wage, case LU-2021-1/1793 (measures in Luxembourg), COVID-19 EU PolicyWatch, Dublin,

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