Luxembourg Work Culture
To succeed in business in Luxembourg, it is vital for both employers and employees to have a strong understanding of the business culture. As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Icelandic work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Norway to start your expansion well-informed.
Luxembourg – one of the smallest nations in the world … but the richest. A land of high incomes and low unemployment, the World Bank ranks Luxembourg No 1 globally for Gross Domestic Income per capita at around 120,000 US dollars.
Surrounded by Germany, France, and Belgium – neighbors from which it draws highly-qualified commuting workers – Luxembourg attracts multinationals to its economy and hosts many of the European Union’s leading institutions.
It is a land of forests, rocky gorges with a fortified medieval town at the heart of its capital, Luxembourg City. But Luxembourg is far from being a country trapped in the past. The mixed and free market thrives on an import-export economy with finance, banking and insurance services making it a sought-after business partner in those sectors.
The Organization for Economic Cooperation and Development saw Luxembourg’s economy strengthen during 2021 with growth of over 6% and predicted growth of over 3% for both 2022 and 2023. Luxembourg may be the EU’s smallest nation with a population of around 630,000, but the financial sector is at the heart of a robust economy in a nation that punches well above its weight.
Incomers need to be up to speed to make their mark in this highly competitive environment. The workforce is well-educated, highly skilled, multi-lingual and Luxembourg’s employment market proves a magnet for workers from those countries enjoying free movement across Europe’s borders.
Ready for the challenge? Now it is time to get down to business. So here are a few tips on taking the right steps and avoiding the pitfalls!
- Language: French, German, and Luxembourgish (a blend of Dutch, Old German and Frankish) are the official languages, although English is widely used in the business environment
- Punctuality: Always be on time – lateness is considered the height of rudeness
- Attitudes: Luxembourg is a key player in the European Union and hosts many of its major institutions. But the Luxembourgish always emphasize the individuality of their nation – and want it to stay that way. Do not assume everyone you meet is from another of the EU’s nations
- Business Environment: Organizations still tend to be hierarchical in their structure, although a levelling out comes from the more relaxed attitudes of other nationals in the workplace. Nevertheless, always show respect
- Negotiations: Expect these to be direct and to the point. Your hosts will be keen to ‘get down to business’
- Greetings: Shake hands with everyone at the start and conclusion of meetings. Respect personal space
- Dress Code: Be neat and smart. Suits, jackets, and ties for men; dresses and suits for women
Luxembourg’s Minimum Wage
The ‘unskilled social minimum wage’ in 2021 gave a gross yearly wage of €26,423 (US$29,808) divided into 12 monthly payments of €2,201.93 (US$2,482) for full-time (40 hours a week) workers. The ‘minimum qualified social wage’ of €2,642.32 (US$2,980) depends on qualifications or seniority and can be improved by collective agreements. The increase in minimum wages was based on the average national salaries in 2018 and 2019.
Probation Periods in Luxembourg
Trial periods can be written into the employment contract, generally for between two weeks and six months. The probation period can be up to 12 months if the contract stipulates a monthly salary exceeding €4,474.31 (US$5,280).
Working Hours in Luxembourg
Luxembourg’s Labor Code restricts ‘normal’ working hours to eight per day and 40 a week unless CBAs allow for less. Exceptions include:
- Employees on five-day weeks can work nine hours on certain days but must not exceed 40 in the week
- Shift workers or those on continuous activities must not exceed 10 hours daily or 40 hours weekly, averaged over four weeks
- In the case of labor shortages, no more than 10 hours daily or 44 in a week for a maximum period of two years
- In situations of force majeure, individual daily hours can be extended within an average of 10 per day or 40 a week over two months
Working over six hours entitles employees to at least one rest period. Generally, duration, frequency and whether hours are paid are part of a collective agreement or negotiated company policy. Rest breaks also reflect the type of work being carried out. Employees receive 11 consecutive hours rest every 24 hours and 44 hours rest every seven days, which should include Sunday. There are exceptions depending on the nature of the work.
Overtime in Luxembourg
Work completed over and above ‘normal working hours’ (eight hours a day or 40 a week) as per the employment contract or collective agreement, is considered overtime and is stringently controlled. All overtime undertaken must be reported to the Inspectorate of Labor and Mines.
Overtime is allowed only with permission from the Ministry of Employment and is limited to two hours daily within a 48-hour weekly limit. Employees receive time off in lieu or are paid at 1.5 times the normal hourly rate. Sunday work, although generally prohibited, is compensated by 170% of the normal hourly rate. Overtime hours are not taxed and to some measure exempt from social security contributions.