A posted employee is any employee who usually works abroad and who carries out his work on the territory of the Grand Duchy of Luxembourg, for the limited period determined stipulated in a specific services assignment, for which a services contract has been concluded.
The limited duration is assessed in the light of the duration, frequency, periodicity and continuity of the services and in relation to the nature of the business of the posting.
As such, a company whose registered office is established abroad can, temporarily post employees for a specific mission within the framework of a transnational services project to an entity for services located in the Grand Duchy of Luxembourg.
The rules on posting apply to companies whose registered office is established outside the territory of the Grand Duchy of Luxembourg and which, in the context of a transnational services, post an employee to Luxembourg, excepting only the maritime merchant marine sector.
An enterprise may temporarily post an employee to the territory of the Grand Duchy of Luxembourg, provided that an employment relationship exists between the enterprise and the posted employee during the period of posting.
within the framework of a contract for the provision of services concluded between the sending company, established outside the territory of the Grand Duchy of Luxembourg, and the recipient of the provision of services established or carrying out its activity on the territory of the Grand Duchy of Luxembourg;
in an establishment belonging to the sending company or in a company belonging to the group to which the sending company belongs;
by a temporary employment agency or by an undertaking which, in the context of a temporary loan of labour, makes an employee available to a user undertaking established or carrying out its activity in the territory of the Grand Duchy of Luxembourg.
What about posting for temporary work agencies or companies that post their employees as a temporary loan of labour?
A temporary employment company or an undertaking which is established outside the territory of the Grand Duchy of Luxembourg and makes an employee available as a temporary loan of labour, may post an employee to a customer established outside the territory of the Grand Duchy of Luxembourg and temporarily carry out an activity on national territory, provided that an employment relationship exists between the temporary employment company or the undertaking which makes an employee available as a temporary loan of labour and the seconded employee during the period of secondment.
Secondments must take place under a contract for providing services relating to a specific purpose or activity limited in time and ending with the performance of the purpose of the contract.
What about doubts as to the reality of a posting or as to whether a company carries out a real and substantial economic activity in its country of origin?
When there is a doubt as to the reality of the posting or as to whether a company operates a real and substantial business in its country of origin, ITM carries out an overall assessment of all the factual elements it deems necessary.
Failure to comply with one or more of these assessments of factual elements shall not automatically result in the situation being de-classified as a posting. The assessment of these elements shall pertain to each individual case and shall take account of the particular features of the situation.,
Where, following the overall assessment, it is established that the employee has been wrongly or fraudulently posted, that employee shall be subject to all the laws, regulations or administrative provisions and to those resulting from collective agreements deemed to be generally binding or from an inter-industry social dialogue agreement deemed to be generally binding, in the field of work and employment.
For the period of secondment, any seconded employee must be paid at least the standard minimum social wage in Luxembourg, or the wage corresponding to the generally binding collective agreement applicable to the activity carried out by his employer, i.e. the seconding company, as well as all the wage components laid down by a legal, regulatory or administrative provision, or by a generally binding collective agreement or by a generally binding agreement on interprofessional social dialogue, and the automatic adjustment of the wage to changes in the cost of living
ATTENTION: The automatic adjustment of wages to changes in the cost of living applies, for posted employees, only in relation to the legal minimum social wage or in relation to the minimum wage rates applicable in the sector, branch or profession by application of a generally binding collective agreement.
In addition, employers shall comply with all Luxembourg legislation concerning Sunday work, legal holidays, days off, collective leave, protection of young employees, pregnant workers, workers who have recently given birth or are breastfeeding, rest periods, health and safety at work, occupational medicine, etc.
Employees are entitled to allowances or reimbursement of expenses to cover travel, accommodation or food expenses incurred by the employee away from home for work reasons. National rules apply to the employee’s accommodation when the employer provides accommodation for employees away from their usual place of work.
The company can post employees for a maximum of 12 months.
A company which posts an employee to the territory of the Grand Duchy of Luxembourg for a period of more than 12 months is subject, as from the 13th month, to all the legislative, regulatory or administrative provisions as well as those resulting from collective agreements deemed to be generally binding or from an agreement on interprofessional social dialogue deemed to be generally binding, in the field of work and employment, with the exception of the procedures, formalities and conditions governing the conclusion and termination of the employment contract, including non-competition clauses and supplementary pension schemes.
If a seconded employee is replaced by a different seconded employee performing the same task at the same location, the duration of the secondment of 12 months shall correspond to the cumulative duration of the secondment periods of each of the seconded employees concerned.
The concept of “same work at the same place” is determined by assessing the nature of the services to be provided, the work to be performed and the address or addresses of the work place.
The 12-month period may be extended to 18 months upon duly substantiated notification by the company, sent to ITM on the electronic platform intended for this purpose before the 12-month period elapses.
What about initial assembly or first-time installation work?
In the case of the posting of employees in connection with work on the initial assembly or first installation work which forms an integral part of a contract for the supply of goods, which is essential for the functioning of supplied goods and which is performed by skilled or specialised employees of the supplier, the provisions concerning the minimum social wage, the automatic adjustment of the wage to changes in the cost of living and paid leave shall not apply, provided that the duration of the work in question does not exceed eight calendar days.
The eight-day period of secondment is calculated over a reference period of 12 months. When calculating this period, the duration of a secondment completed by an employee replacing a seconded employee is taken into account.
Please note that this exemption does not apply to activities in the field of construction that involve the construction, restoration, maintenance, alteration or demolition of structures, including the following:
excavation;
earthwork;
construction;
assembly and disassembly of prefabricated elements, including sanitary and heating installations, installation of alarm systems and illuminated signs;
Allowances directly related to the secondment are considered to be part of the compensation of seconded employees, insofar as they are not paid as reimbursement of expenses actually incurred as a result of the secondment, such as travel, accommodation or food expenses. The company posting employees to the territory of the Grand Duchy of Luxembourg reimburses these expenses to the posted employees concerned.
All allowances directly linked to the posting shall be considered reimbursement of expenses actually incurred as a result of the posting, unless the terms and conditions of employment laid down by laws, regulations or administrative provisions or by those resulting from collective agreements deemed to be generally binding or from an agreement on interbranch social dialogue deemed to be generally binding to the employment relationship determine which elements of the allowances are for reimbursement of posting expenses and which form part of the remuneration.
The allowances or reimbursement of travel, accommodation or food expenses apply only to expenses incurred by the employee as a result of his secondment when he has to travel to or from his usual place of work in the territory of the Grand Duchy of Luxembourg or when he is temporarily sent by his employer from this usual place of work to another place of work.
What is the process for posting an employee to Luxembourg?
The company must inform the ITM no later than when the work begins on Luxembourg territory and without prejudice to a possible earlier declaration by the seconding company, by submitting the information essential for obtaining a social ID badge and for the required ITM legal control, on the electronic platform intended for this purpose:
the identification data of the posting employer and its representative;
the identity of the legal or natural person freely and clearly determined by the seconding company, present on Luxembourg territory, who will be the contact person for communications with ITM;
the planned duration of the secondment and the dates on which it is to begin and end, in accordance with the services contract;
the address or addresses of the places of work in the Grand Duchy of Luxembourg;
a description of the services;
the surname, first name, place of habitual residence, date of birth, nationality and occupation of the seconded employee;
the capacity in which employees are engaged in the company and the profession or occupation to which they are regularly assigned, as well as the job they will be performing while on secondment to Luxembourg;
the identification data and address of the client, the principal, the subcontractor, their respective co-contractors and their actual representatives who contract with the posting employer;
the seconded employee’s accommodation information, if different from the employee’s usual place of residence.
Any subsequent change, in particular regarding the contact person or the place of accommodation, must be reported to ITM in the same way, without prejudice to the need for a new service contract with a different purpose.
The temporary employment company or the undertaking which provides employees under a temporary loan of labour arrangement, which is established outside the Grand Duchy of Luxembourg and which posts an employee to the country, shall submit the above-mentioned information as well as the identification data of the client company and of its effective representative to the ITM.
In addition, the company shall submit, as from the day of the beginning of the posting and without prejudice to a possible earlier declaration by the posting company, the following documents to ITM on the electronic platform intended for this purpose:
a copy of the services contract taken out with the client, the principal, the subcontractor, their respective co-contractors and, where appropriate, a copy of the contract of assignment;
a certificate of prior declaration or the certificate replacing it issued by the Ministry for Small and Medium-sized Enterprises, provided for in the Law dated 19 June 2009 transposing Directive 2005/36/EC as regards a) the system for recognition of evidence of formal qualifications and professional qualifications b) providing temporary services
the original or a certified copy of form A1; or, where appropriate, a precise indication of the social security bodies to which the workers are affiliated during their stay in Luxembourg territory;
VAT certificate issued by the registration and domains administration;
either a copy of an employment contract or a certificate of compliance with Directive 91/533/EEC dated 14 October 1991 on the employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship, as transposed by the legislation of the competent State, issued by the competent supervisory authority of the country in which the posting undertaking has its registered office or habitually operates;
a certificate of conformity, issued by the competent supervisory authority of the country in which the posting undertaking has its registered office or habitually operates, of the employment relationship of the posted employees, at the time of their posting, with the competent legislation transposing Directives 97/81/EC concerning part-time work and 1999/70/EC concerning fixed-term work;
official documents attesting to the professional qualifications of employees;
salary slips and proof of payment for the entire period of secondment;
the clocking-in and clocking-out times and the duration of the daily work for the entire duration of the secondment on Luxembourg territory;
a copy of the residence permit for any third-country national seconded to Luxembourg;
a copy of the medical certificate of recruitment issued by the occupational health services competent for the sector;
a copy of the accommodations register;
a copy of the document setting out the terms and conditions for the payment of travel, accommodation or food expenses by the employer, as well as a copy of the document setting out the amounts of these expenses.
The documents must be translated into French or German.
What are the obligations of the principal or the client?
The principal or the customer who contracts with a service provider who posts employees shall check with the latter and/or with the direct or indirect subcontractor or the subcontractor’s co-contractor that it has sent the posting declaration to the ITM no later than when posting begins and that it has indicated the identity and address in Luxembourg of a contact person as part of this declaration.
If the company or the temporary employment agency fails to submit a copy of the declaration as soon as the posting begins, the principal or customer shall send a declaration containing this information, together with a copy of the services contract to ITM on the electronic platform set up for this purpose within eight days of the start of the posting.
The client or the principal who contracts with a service provider who posts employees on the Luxembourg territory is bound by an obligation submit this type of information to ITM.
When the principal or the client is informed in writing by the ITM of the partial or total non-payment of the legal or conventional salary due to the posted employees, or of any other infringement of the provisions of the Labour Code, it shall immediately enjoin the posting company to put an end to this situation without delay by registered letter with acknowledgement of receipt.
This obligation to order the cessation of the infringement shall apply in respect of that company’s co-contractor, a direct or indirect subcontractor or a co-contractor of a subcontractor.
The undertaking concerned by the injunction must confirm as soon as possible that it has resolved the problem by registered letter with acknowledgement of receipt. It shall send a copy of its reply to ITM without delay.
In the absence of a written reply from the seconding company within a reasonable time, taking into account the period of the contract the client or the principal shall immediately inform the ITM within 15 calendar days from the notification of the above-mentioned infringement.
When the principal or the client is informed in writing by ITM that an employee who is far from his usual place of work is being accommodated in conditions that are contrary to the rules on the subject, he shall immediately enjoin the employer of this employee to put an end to this situation without delay by registered letter with acknowledgement of receipt.
This obligation to issue an injunction to put an end to the infringement applies to the secondment company’s co-contractor, to a direct or indirect subcontractor or to a co-contractor of a subcontractor. The undertaking to which the injunction applies must confirm as soon as possible that it has rectified the situation by registered letter with acknowledgement of receipt. It shall send a copy of its reply to ITM without delay. In the absence of a written reply from the undertaking within a reasonable time, taking into account the duration of the contract the client or the principal shall immediately inform ITM within 15 calendar days from the notification of the infringement.
In the event of failure to comply with the injunction and information obligations, the principal or the client shall be jointly and severally liable with the company for the payment of the remuneration, allowances and charges due to the latter’s employees, including the related social security contributions.
These provisions do not apply to an individual who contracts with an enterprise for his personal use, or that of his spouse, partner, ascendants or descendants.
What are the obligations of a client with regard to temporary work or the temporary loan of labour?
A company established outside the territory of the Grand Duchy of Luxembourg that is temporarily carrying out its activity in Luxembourg and is using an employee posted by a temporary employment undertaking or an undertaking which makes an employee available via a temporary loan of labour and is established outside of Luxembourg, shall inform the employer of that employee of the posting of that employee and of the conditions applicable to work and employment, in particular with regard to pay.
Similarly, this client company established or carrying out its activity in the Grand Duchy of Luxembourg that is using an employee seconded by a temporary employment undertaking or an undertaking which makes an employee available via a temporary loan of labour, shall inform the employer of that employee of the conditions applicable in terms of work and employment, in particular with regard to pay.
What are the accommodation conditions for an employee who is away from his usual place of work?
Housing and rooms rented or made available for housing purposes by an employer to an employee who is away from his usual place of work must meet the health, hygiene, safety and habitability criteria referred to in Article 2 of the law dated 20 December 2019 on the health, hygiene, safety and habitability criteria for housing and rooms rented or made available for housing purposes.
The costs of accommodation in lodgings or rooms are fully covered by the employer.
The accommodation of employees in premises used for industrial, craft or commercial purposes is prohibited.
When the principal or the client is informed in writing by ITM that an employee who is far from his usual place of work is being accommodated in conditions that are contrary to the rules on the subject, he shall immediately enjoin the employer of this employee to put an end to this situation without delay by registered letter with acknowledgement of receipt.
This obligation to issue an injunction to put an end to the infringement applies to its co-contractor, to a direct or indirect subcontractor or to a co-contractor of a subcontractor. The company to which the injunction applies must confirm as soon as possible, by registered letter with acknowledgement of receipt, that it has rectified the situation. It shall send a copy of its reply to ITM without delay. In the absence of a written reply from the undertaking within a reasonable time, taking into account the duration of the contract the client or the principal shall immediately inform ITM within a maximum period of 15 calendar days from the notification of the infringement.
Failure by the seconding company to comply with the obligations in the declaration of secondment, submission of the required documents, as well as partial or total non-payment of the legal or contractual salary due to seconded employees or any other infringement of the public policy provisions referred to in the Labour Code is punishable by an administrative fine of between 1.000 € and 5.000 € per seconded employee and between 2.000 € and 10.000 € euros for repeat offences committed within a period of two years from the date of notification of the first fine.
Note that the total amount of fines may not exceed 50.000 €.
However, depending on the circumstances and the seriousness of the offences, the Director of ITM may publish a stop-work order.