Posted workers to Luxembourg fall under the scope of application of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services. Therefore, companies that post their workers to Luxembourg must consider a series of requirements provided for by national transpositions of this Directive, Directive 2014/67/EU and Directive (EU) 2018/957, namely the Loi du 20 décembre 2002, the Loi du 14 mars 2017 and the Loi du 15 décembre 2020.
In the following sections you can find a summary of the obligations provided by Luxembourg and European Law on transnational posting of workers to Luxembourg.
Preliminary obligations for the posting of workers to Luxembourg
EU/EEA and Swiss Confederation companies may post their workers to Luxembourg under the scope of Directive 96/71/EC. Following to Directive 2014/67/EU, the posting of workers to EU involves registration requirements. In the case of Luxembourg, the posting company must notify (through the déclaration préalable) the temporary transnational provision of services to the Direction générale des Classes moyennes at the Ministry of the Economy.
Further obligations related to the posting of workers to Luxembourg
Following to the submission of the posting declaration, each posted worker must obtain a social badge. This identification tools embeds the identity details of each employee. Furthermore, a barcode allows the competent authorities – in this case the Inspectorate of Labour and Mines (ITM) – to check the data provided in the posting declaration.
Besides, when the activity falls within specific sectors, such as the construction sector, the posting company must consider additional obligations. As a matter of fact, in such cases the foreign-based company must register for VAT in Luxembourg.
We recommend a specific analysis of each case in order to assess whether the VAT registration is needed.
Working and salary conditions applicable during the assignment to Luxembourg
When workers are posted to Luxembourg, the foreign posting company must meet the provisions set out by Luxembourg labour law. General conditions of employment concern working time, safety, health and hygiene in the workplace and paid leave, among others.
Minimum wage in Luxembourg
As far as the minimum wage is concerned, in Luxembourg there is both a social minimum wage and collective bargaining agreements. Each agreement sets out the applicable minimum wage requirements, that in any case lay over the social minimum wage.
With the last increase of February 1st, 2023, the social minimum wage in Luxembourg now amounts to EUR 2447,07.
Social security in Luxembourg
When posted to Luxembourg by an employer in an EU/EEA-country, a posted employee temporarily works in Luxembourg, but continues to be employed in another country. Thanks to the EU harmonized social insurance system, employees posted abroad pay social insurance contributions to the country where they are regularly employed.
As a matter of fact, pursuant to Regulation (EC) 883/2004, the posting company must apply to the competent social institution for the issuing of an A1 Certificate for each posted worker. This document states in which country the holder pays for social security contributions. Therefore, posted workers remain under the social security system legislation of the country in which they are employed.
We at A&P would be glad to support you in the application for the A1 certificate or the multistate A1 Certificate.
Non-EU workers posted to Luxembourg
EU-based companies (including the ones based in the EEA and the Swiss Confederation) may post non-EU workers as long as they have the right to work and reside in the country where the firm is based. Pursuant to article 49 of the modified law of 29 august 2008, if the posting lasts more than 3 months, third-country nationals must apply to the Immigration Directorate for a residence permit for workers posted by a service provider established in the EU.
Documents’ availability during the posting of workers to Luxembourg
All documents related to the posting must be available in Luxembourg during the posting period in case of an audit. In particular, the appointed representative acts as reference for the authorities to collect information. Once the posting terminates, documents must be stored up to 10 years in order to allow Labour Audits.
Moreover, these files must be available either in French or German. If they are drafted in another language, translations are therefore required.
Penalties in case of non-compliance as defined in the Luxembourg legislation
Any breaches of the provisions applicable to the posting of workers to Luxembourg may entail penalties in the form of administrative offences. The fine may amount up to EUR 5,000 for posted worker. However, in case of repeated offences the authorities may raise it up to EUR 50,000.
Since the posting company and the receiving company share the responsibility, either of them may pay this fine.