COVID-19: information for employers

This article provides information for employers with regard to the government’s recommendations in the context of COVID-19. The recommendations include:

• a preference for teleworking;
• the authorisation of employees to take extraordinary family leave;
• the use of short-time working to prevent dismissal of full-time employees;
• the use of quarantine as a preventative measure;
• the introduction of certificates for frontier workers; and
• the introduction of new tax measures.

Extraordinary leave for family reasons

In its 12 March 2020 press release, the government authorised employees to take extraordinary family leave to care for minor children due to the closure of educational facilities.

Extraordinary family leave due to COVID-19 has been extended until the end of the suspension of activities of schools and care facilities, which is currently scheduled for 19 April 2020 inclusive, including during the Easter holidays.

Who benefits from such leave?
The leave can be taken regardless of whether the child is quarantined.

In order to benefit from the leave for family reasons:

• the employee must be affiliated to the Luxembourg social security system (including non-residents);
• the employee must be the parent of one or more children under the age of 13 (parents of children aged 13 and over cannot benefit from the leave for family reasons); and
• the children must be affected by the temporary closures of (Luxembourg or foreign) structures for primary and secondary education, vocational training or childcare.

Leave for family reasons should be the last resort (in the absence of other options for childcare at home). Other measures such as teleworking should therefore be favoured whenever possible.

Moreover, leave for family reasons cannot in principle be accumulated with other measures that allow parents to stay at home (eg, if one parent is on short-time work, the second parent is in principle not entitled to take the extraordinary family leave, especially if it concerns critical employment).

What procedures must employees follow?
To take family leave, employees must:

• inform their employer as soon as possible, indicating the beginning and end of the leave and the days (or half-days) that they will take;
• fill in and sign the specific form (the start and end dates of the leave need not be indicated on the form); and
• send the form to their employer and to the National Health Fund.

The completed form is equivalent to a medical certificate in the eyes of employers and the National Health Fund.

Thereafter, employers must notify the social security organisations regarding the specific days to be taken by an employee through family leave.

Can employees split this leave?
Employees can interrupt and split the leave as necessary. Employers must be informed as soon as possible of any changes. Employees must complete and send the form to their employer at the beginning of the leave.

Can both employed parents take family-related leave at the same time?
Both parents cannot take family leave at the same time. However, the leave may be alternated according to their needs if both parents are affiliated with the social security scheme. Each parent must complete a separate form.

Can employers refuse leave for family reasons?
Employers cannot refuse leave for family reasons if the employee has followed the legal procedure (ie, informing their employer and sending them the completed form).

Therefore, even when teleworking is possible, employers cannot, in principle, refuse to grant leave for family reasons.

Short-time work

Short-time work is an option for employers faced with a decline in activity that now cannot employ employees on a full-time basis.

What conditions must be met to benefit from short-time working?
Due to the threat of COVID-19 and the tangible repercussions on companies and their employees, the Economic Committee authorised companies in difficulty – that is, companies whose activity is reduced or totally interrupted – due to COVID-19, to make an application for short-time working due to force majeure.

A short-time working scheme in the event of force majeure can apply for employees:

• who do not have a certificate of incapacity for work; or
• who can no longer be employed full-time or work at all:

o   because a supplier can no longer deliver raw materials due to COVID-19;

o   because of a sharp drop in customer demand due to COVID-19; or

o   if the company can no longer continue to operate normally or if one or more departments are completely at a standstill due to staff absences caused by external decisions relating to COVID-19.

Due to the threat of COVID-19 and the tangible repercussions on companies and their employees, the Economic Committee authorised the following extraordinary measures on 18 March 2020.

Fast procedure for companies directly affected by a government decision of closure
Which companies are affected?
Companies that have had to cease all or part of their activities following a government decision (ie, those referred to, in particular, by the Ministerial Order of 16 March 2020 and the Grand-Ducal Regulation of 18 March 2020) are, exceptionally, directly eligible for short-time working, as of the effective date of the government decision causing their total or partial closure.

What is the procedure for reimbursement?
An online system for claiming reimbursement for the hours unemployed as part of short-time working for closure imposed by the government is currently being developed and will be available shortly on the National Employment Agency website. Companies concerned should wait for this system to go live online before applying for reimbursements, which will be retroactive to 16 March 2020. A communication to the general public will be made as soon as the online system is operational.

How much is the refund?
Reimbursement is limited to 80% of the normal salary up to a maximum of 250% of the minimum social wage for unskilled workers (ie, €2,141.99 x 2.5 = €5,362.48). A monthly statement must be submitted to receive the refund.

Advances may be paid on the basis of the actual wage bill on the effective date of the respective government decision.

Reimbursement declarations will be subject to ex post control and erroneous or fraudulent declarations may give rise to forced reimbursement without prejudice to legal proceedings.

Introduction of a force majeure and COVID-19 short-time working scheme for companies that are still in business
Which companies are affected?
Companies that remain open but whose businesses still suffer the effects of COVID-19 can benefit from this scheme.

How to apply for the scheme?
Companies can submit an application at any time for the granting of force majeure and COVID-19 short-time working to the secretariat of the Economic Affairs Committee at the Ministry of the Economy by filling in the form that can be downloaded from adem.lu or guichet.public.lu.

Requests for short-time working must be communicated to – and where possible, signed by – the staff representatives.

To which employees and organisations does the short-time working scheme apply?
To be eligible for short-time working, employees must:

• be under an employment contract for an indefinite or fixed period;
• be employed by a company legally established in Luxembourg at the time when the unemployment occurs;
• be fit for work;
• be under 68 years of age and not receive an old-age pension, an early old-age pension or a disability pension;
• be normally employed at a place of work on Luxembourg territory; and
• be insured as employees under the Luxembourg social security.

Consequently, temporary workers are excluded from this scheme in the user company in which they carry out their assignment. On the other hand, they are eligible if the temporary employment agency, to which they are bound by a contract of assignment at the time of the occurrence of the events or of the taking effect of the relevant decision of the government, itself submits a request for short-time working in cases of force majeure and COVID-19.

This eligibility will nevertheless be limited to the duration of the mission normally provided for and will not apply to any renewal or new contracts concluded during the period of partial unemployment.

Apprentices are eligible, as are persons benefiting from measures to promote employment, including those employed under employment initiation contracts and employment reinsertion contracts, for the part of the salary payable by the employer.

Applications from non-profit-making associations will be analysed on a case-by-case basis in order to avoid any double funding.

Applications from childcare businesses are, in principle, ineligible as the Ministry of National Education, Children and Youth continues to contribute 70% of their operating costs.

Employees who are teleworking or on leave for family reasons are ineligible for short-time working during this specific period.

General rules to be observed when applying for short-time work
The government stated that the following general rules continue to apply in all cases:

• the prior exhaustion of a company’s own resources (eg, the non-renewal of fixed-term contracts that have expired, no recourse to new fixed-term contracts, the exhaustion of remaining leave, no recourse to temporary employees and the introduction of temporary staff leasing); and
• the prohibition of dismissal for reasons that are not inherent to the individual (eg, dismissal for economic reasons).

Quarantine as preventive measure

Can employers force employees to take annual leave or unpaid leave out of fear of COVID-19 spreading in the company?
Employers cannot make their employees take such leave. Thus, employers that decide to release employees must bear the cost (eg, grant a work dispensation or additional leave to the employee concerned), except if an employee agrees to take annual leave.

Certificates for frontier workers residing in France, Belgium and Germany

In order to facilitate the entry of frontier workers into Luxembourg during possible border controls, the government has created certificates – which must be signed by employers – attesting to employees’ employment relationship and their need to cross the border between France and Luxembourg, Belgium and Luxembourg or Germany and Luxembourg during the COVID-19 pandemic.

Thus, upon presentation of such certificate, frontier workers residing in France, Belgium or Germany will be exempt from the restrictions on border crossings.

France-Luxembourg border
To cross the France-Luxembourg border, employees must provide:

• a certificate proving their need to cross the border, which is issued by the Luxembourg government;
• a certificate of exceptional travel, which is issued by the French government; and
• proof of business travel, which is issued by the French government.

Belgium-Luxembourg border
To cross the Belgium-Luxembourg border, employees must provide a certificate proving their need to cross it.

German frontier workers
The German Federal Police has issued a new certificate for cross-border commuters residing in Germany. This certificate can be placed behind a vehicle’s windscreen in a clearly visible place.

This certificate is valid immediately, but the form provided by the Luxembourg government remains valid and will continue to be accepted by the German Federal Police.

Exceptional tax measures

Belgium-Luxembourg border
On 16 March 2020 the government issued the following press release concerning teleworking by frontier workers residing in Belgium:

As a result of the health situation linked to the Covid-19 crisis, many frontier workers will be forced to telework more in the days and weeks to come.

The Final Protocol to the Belgian-Luxembourg Convention provides for a rule of tolerance allowing cross-border workers to exercise their activity for a maximum of 24 days outside their usual State of activity while remaining taxable in that State.

The Belgian and Luxembourg authorities consider that the current situation relating to the coronavirus constitutes a case of force majeure, for which no days are to be counted under the 24-day rule.

It has therefore been decided that, as from Saturday 14 March 2020, the presence of a worker at home, in particular to carry out teleworking, will not be taken into account in calculating the 24-day period. This measure is applicable until further notice. (Emphasis added.)

France-Luxembourg border
On 19 March 2020 the government issued the following press release concerning teleworking by frontier workers residing in France:

As a result of the health situation linked to the Covid-19 crisis and the various measures taken to fight the spread of the virus, many French cross-border workers will be required to telework more in the days and weeks to come.

Since the entry into force of the new Tax Convention between France and Luxembourg, signed in 2018, French cross-border workers can telework from France for up to 29 days for the benefit of their Luxembourg employer without the related remuneration being taxed in France.

The French and Luxembourg authorities consider that the current coronavirus situation qualifies as case of force majeure. It has therefore been agreed that, from Saturday 14 March 2020, the presence of a worker at their home to carry out their activity may not be taken into account in calculating the 29-day period. This measure is applicable until further notice.

The specific terms of application of these decisions, which take effect as of 14 March 2020, will be specified at a later date.