Background information

After the increase by 2.8% of the social minimum wage, the government has decided to help enterprises with compensation aid. The government intends to support businesses in sectors that are the most severely affected by the COVID-19 pandemic. 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 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 four years preceding the judgment of the competent court for three years from the date of such judgment.

Use of measure

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

Until 28 September 2021, around €1.5 million were spent as part of the compensation aid for increasing the social minimum wage.

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

Involvement

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

This case is not occupation-specific.

Sources

• 19 December 2020: law of compensation aid for the increase of the social minimum wage in the context of COVID crisis (legilux.public.lu)
• 28 September 2021: Aid expires on 30 September 2021 (gouvernement.lu)