Guide to living and working in Luxembourg
Luxembourg
|
|
View the latest Luxembourg Jobs on Exposure Jobs |
|
Country Overview |
|
|
Population |
480,222 |
|
Unemployment Rate |
4.9% (11/07) |
|
Average annual unemployment rate 1995 – 2004 |
3.3% |
|
GDP |
€24.92bn / $38.79bn |
|
GDP per head |
€52,000 / $80,800 |
|
Capital |
Luxembourg |
|
Major language |
Luxembourgish, French, German |
|
Life Expectancy (UN) |
76 years (men) 82 years (women) |
|
Monetary unit |
1 euro = 100 cents |
|
Internet domain |
.lu |
|
International dialing code |
+382 |
Luxembourg benefits from its proximity to France, Belgium and Germany. Its stable, high-income economy features solid growth, low inflation and low unemployment. The economy depends on foreign and cross-border workers for about 60% of its labour force. Although Luxembourg, like all EU members, suffered from the global economic slump in the early part of this decade, the country continues to enjoy a high standard of living. GDP per capita in Luxembourg ranks first in the world. After two years of strong economic growth in 2006-07, Luxembourg's economy looks likely to slow in 2008 due to conditions in the world financial markets, but growth is likely to remain above the European average.
The Economy
The industrial sector used to be dominated by steel, but is now more diversified to include chemicals, rubber and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings and the country provide an attractive regime for holding companies. Agriculture is based on small family-owned farms. Main sectors are: banking and financial services, iron & steel, information technology, telecommunications, cargo transportation, food processing, chemicals, metal products, engineering, tires, glass, aluminium and tourism.
Pay
Human development Index
Ranking: 18th
Index value: 0.944
The Human Development Index combines statistics on GDP, adult literacy, average years of schooling and life expectancy to provide an indicator of human development. The HDI shown here gives the ranking of 24 countries among 177. See http://hdr.undp.org/en/ for more information.
Getting a job
Overview of the labour market:
In June 2007, the employment situation was as follows:
• Total domestic employment: 337 403
- of which: cross-border commuters 138 649 (41%)
• Domestic salaried employment: 316 870
- of which: cross-border commuters 136 323 (43%)
Approximately two-thirds of new jobs are held by cross-border commuters. The largest employers, listed in order, are:
1. Mittal-Arcelor group (steelmaking – 5 870 employees in January 2007);
2. Cactus (retailer – 3 940 employees);
3. FORTIS (finance – 3 450 employees);
4. Dexia (finance – 3 430 employees) and
5. Postes et Télécommunications (post office and telecommunications – 3 310 employees).
Employment conditions are attractive in Luxembourg; companies therefore demand relatively high levels of qualification.
Applying for a job:
Applications should include an application letter and a Curriculum Vitae (CV). The application letter should normally be handwritten and e in the language used in the advertisement (unless specified otherwise). Letters sent with speculative applications should be written in French. A CV generally consists of two typed pages (A4) giving details of the applicant’s training and previous work experience. A photograph may be enclosed with the CV.
Conditions and rights
Employment law:
In this small, affluent state, collective bargaining is largely at a company level. The law requires companies that have over 1,000 employees or are more than 25% state-owned to appoint one-third of their board from employee representatives. Despite this, the government was reluctant to introduce the European Works Councils Directive. There have been frequent conflicts with trade unions on issues such as union recognition in the banking industry and working time arrangements in the hotel and catering sectors.
Working hours:
Standard hours: are 40 hours per week and 8 hours per day. The working day may not exceed 10 hours. An employee can work up to 10 hours per day and 48 hours per week provided that a weekly average of 40 hours is reached over a four-week period.
Overtime: Hours worked beyond the legal working time (8 hours per day and 40 hours per week) are considered as overtime. Manual workers are entitled to a 25% supplement for each hour of overtime, and white collar workers a 50% supplement. Overtime may also be paid on the basis of one and a half hours’ time off for each hour of overtime worked.
Sunday work: Sunday work is forbidden apart from in certain sectors of activity or when authorised by the Inspection du Travail et des Mines (Labour and Mines Inspectorate).
Holidays and leave:
At least 25 working days of paid leave must be given per year. A longer period may be specified in the applicable collective agreement. Workers must work for an unbroken period of three months for the same employer before they are entitled to take a period of leave. War invalids, victims of accidents at work and disabled workers are granted an additional 6 days leave. Miners, manual workers and technical engineers in the mining industry, are given an additional 3 days leave.
Leave for personal reasons including: marriage (six days), death of a relative (three days), moving house (two days), birth of a child (two days for the father), and marriage of a child (two days for each parent).
Leave for family reasons: this is limited to two days per year per child under 15. It is granted in cases of serious illness, accident or other health reasons requiring the presence of one of the parents.
Parental leave: any person employed in Luxembourg for at least one year who wishes to care for their child under the age of 5 is entitled to parental leave. This leave lasts six months per child when the parent stops work, and twelve months when the parent wishes to work part-time (for which the employer's agreement is required). The allowance comes to €1,710.90/month net for full-time leave and €855.44/month for part-time leave. Both parents are entitled to take parental leave; however the first period of parental leave must start immediately when maternity leave ends. It is also possible to take three months unpaid parental leave for a child under the age of 5 if parental leave was not taken after maternity leave.
Public holidays: New Year's Day, Easter Monday, 1 May, Ascension, Whit Monday, 23 June, Assumption, All Saints Day, 25 and 26 December. If a public holiday falls on a Sunday, beneficiaries are entitled to take a day's leave within the next three months.
Contracts
Types of employment:
You must be 18 years old to enter into an employment contract. Nevertheless, a contract may be entered into from the age of 15 with the agreement of the parents. There are several different forms of employment in Luxembourg. In the public sector, there are essentially three categories of staff: civil servants, state white collar and state manual workers. In the private sector, there are white collar and manual workers.
Temporary work: This represents about 1.7% of the employed population. Employees have a ‘contrat de mission’ (assignment contract) with the temporary employment agency under which they carry out a precise and non-permanent task.
Home work: 9% of paid jobs involve working from home.
Part-time work: This represents 18% of employees.
Apprenticeship: Apprenticeship is a system of block-release training organised by the Ministry of Education and Vocational Training together with the trade associations concerned. Apprenticeship contracts generally last for three years.
Self-employment: Self-employed workers run their own business.
Entertainment industry workers on short-term contracts: This covers artists and stage technicians who offer their services for fees on the basis of a fixed-term contract or contract for services.
Employment contracts:
Employment contracts may be concluded for an indefinite period, in most cases in the form of a permanent CDI contract (Contrat à Durée Indéterminée) or for a fixed term contract (CDD – Contrat à Durée Déterminée). Employment contracts must be in writing and given to employees before they begin working. The contract must include the following information: the nature of the position, a description of the duties involved, normal working hours, basic remuneration and benefits, agreed bonuses or profit-sharing and the length of the probationary period (if applicable).
Specific rules governing fixed-term (‘CDD’) contracts: A fixed-term contract may not run for a period exceeding two years, including any renewals. It may only be renewed twice and only if the initial contract contains a renewal clause. The use of fixed-term contracts is restricted to special situations, for example: for seasonal work, a temporary increase in business or to replace an absent employee. A fixed-term contract may not be terminated prior to its completion date, except in cases of serious misconduct. A fixed-term contract should include the following information: the date on which the contract ends or the minimum length of time for which it will run, the name of the employee who has been replaced (if applicable), the length of probationary period (is applicable) and terms of renewal, if any.
Visas and work permits
Visas:
Luxembourg is a signatory to the Schengen Treaty. The 15 Schengen countries are: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Italy, Greece, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden. With a Schengen visa, you may enter one country and travel freely throughout the Schengen zone.
Passport holders from European Union and the following countries do not need a visa to visit Luxembourg or other Schengen countries: Andorra, Argentina, Australia, Bolivia, Brunei, Bulgaria, Canada, Chile, Costa Rica, Croatia, El Salvador, Guatemala, and Honduras. Israel, Japan, Republic Of Korea, Liechtenstein, Malaysia, Mexico, Monaco, New Zealand, Nicaragua, Panama, Paraguay, Romania, San Marino, Singapore, Switzerland, United States, Uruguay, Vatican and Venezuela.
Nationals of countries not mentioned above may need a visa to visit Luxembourg. To apply for visas please contact your nearest Embassy or Consulate of Luxembourg.
Work permits:
Citizens of full European (EFTA, EEA) Member Countries & Switzerland: are able to live and work in Luxembourg without a visa or work permit.
Nationals of the ‘new’ Member States: (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) still require an individual work permit.
If you are from a country that is not a full European (EFTA, EEA) Member you must obtain a work visa or permit to work in Luxembourg.
Tax, social security and healthcare
Taxation system:
An employee’s income tax is deducted at source by their employers on a ‘pay as you earn’ (PAYE) basis. Income tax is withheld from your salary according to the information supplied on your official tax card. When you first register at your town hall or at the beginning of each tax year, you’re sent a tax card listing your name, address, marital status and the number of children in your household for whom you’re entitled to deductions or allowances. The tax card will also indicate the tax category to which you belong:
- Class 2 – married couples assessed jointly;
- Class 1a – single or widowed people over the age of 65 and single, separated, widowed or divorced people with dependants living in the household;
- Class 1 – everyone not eligible for class 1a or class 2, i.e. all single people under the age of 65 with no children or other dependants living in the household.
The number of dependants for which you’re entitled to claim tax relief is indicated by a figure following the tax class: e.g. a married couple with two children would be classified as 2.2, while a single mother with one child would be 1a.1. A married person who is widowed, divorced or separated remains in class 2 for three years following the bereavement or separation.
You must verify the information on the card you receive and then give the card to your employer, who uses it to record payroll information, including the income tax deducted from your salary. If your situation changes during the tax year, you must notify the tax authorities and your employer immediately. The employer is responsible for recording your travel deductions as well as any additional expenses or extraordinary charges which affect your taxes.
Social security system:
The Luxembourg social security system provides protection for five possible situations:
- sickness/maternity (including dependency)
- accidents at work and occupational diseases
- old age/invalidity and survivor
- family responsibilities
- unemployment
Contributions are paid to the Joint Social Security Centre. Both the employer and the beneficiary contribute and the amount paid represents a percentage of income from gainful employment. The beneficiary’s contributions go primarily towards health-maternity insurance, dependency insurance and pension insurance, but not to accident insurance, family allowance and unemployment benefits.
Health system:
All workers and their families are covered by the healthcare system. In Luxembourg there are 3 doctors per 1 000 inhabitants. A first visit to the GP costs €30.30. The cost of medical treatment and services is refunded at the official rates.
Lifestyle:
A founding member of Europe, Luxembourg has a commanding location in the centre of the EU, with easy access to a number of neighbouring nations, making daily life or at least weekends a potentially international affair. This Grand Duchy is a favourite amongst those working in financial services and offers a very comfortable and civilised lifestyle.