In the framework of a working relationship, the salary is a direct compensation for the work carried out by the employee for his employer. It may consist of different elements in cash or in kind.
As a general rule, the salary is freely determined by the 2 parties when the employment contract is concluded.
Nevertheless, employers must respect the applicable social minimum wage according to the employee's qualifications.
Salaries may be affected by 2 types of adjustment:
- an increase in the social minimum wage;
- wage indexation.
In general, the level of salary and pay adjustments are freely negotiated between:
- the employer, who must nevertheless respect the applicable social minimum wage according to the employee's qualifications;
- and the employee, who will be considered as a skilled worker or not, according to his experience and training.
Posted work: employers who post their workers to another EU country must ensure that said employees are paid at least the social minimum wage in the country where they will temporarily carry out their work.
The applicable minimum wage depends on the employee's level of professional qualification.
To be considered a skilled worker, the employee must:
either have, for the profession concerned, a recognised official certificate at least equivalent to a vocational skills certificate (certificat d'aptitude technique et professionnelle - CATP) or a vocational diploma (diplôme d'aptitude professionnelle - DAP) from a Luxembourg technical secondary school;
or have a manual skills certificate (certificat de capacité manuelle - CCM) or a certificate of vocational ability (certificat de capacité professionnelle - CCP) and proof of at least two years' experience in the trade in question;
or have a preliminary technical and vocational certificate (certificat d'initiation technique et professionnelle - CITP) and proof of at least 5 years' practical experience in the trade or profession;
or, in the absence of a certificate, provide proof of at least 10 years' practical professional experience (if a certificate exists for the required qualification);
or provide proof of at least 6 years' practical experience in a trade or profession which requires certain technical skills and where no official certificate is issued after vocational training.
The employer must in theory be informed of the worker's qualification at the time the worker is hired.
It is only after the worker has provided his qualifications to the employer that he can request the social minimum wage for skilled worker. It is up to the worker to provide sufficient proof of his qualifications in order to obtain the status as skilled worker (through diplomas or professional work experience)
The employer must also ensure equal treatment within the business, i.e.:
- equal pay for men and women for the same work or for work of equal value;
- and equal pay for employees on a fixed-term employment contract and employees on a permanent employment contract. The same applies, proportionally, for part-time and full-time employees.
- an employment contract or a collective agreement may not provide for lower pay for women than for men if they carry out a job of equal value;
- an employment contract or a collective agreement may not provide for lower pay for employees on a fixed-term employment contract, when they carry out a job of equal value to an employee on a permanent employment contract.
Social minimum wage
The salary may not be below the social minimum wage under any circumstances.
(index 794.54 as of 1 January 2017)
The applicable social minimum wage is:
- increased by 20 % for a skilled worker;
- decreased by 20 % to 25 % in the case of an adolescent worker.
Applicable minimum wage
Age and qualification
% of the social minimum wage
|Gross monthly wages as of 1 August 2016|
18 years and over, skilled worker
18 years and over, unskilled worker
17 to 18 years
15 to 17 years
Adjustment of the minimum social benefits
The social minimum wage, pensions, accident pension and the GMW (guaranteed minimum wage) may be adjusted every 2 years according to the evolution of the average wage level.
When average wage levels rise in relation to the social minimum wage, the level of the social minimum wage may be adjusted to cover this difference either partially or totally.
The laws amending the labour law with the aim of adjusting the social minimum wage are published in the Mémorial A.
The employer must, where applicable, increase the wages of employees receiving the social minimum wage up to the new rate.
Indexation of salaries
Salaries, wages and social contributions (including the social minimum wage) are, on the other hand, adjusted in line with the evolution of the cost of living.
When the consumer price index increases or decreases by 2.5 % during the previous semester, salaries are normally adjusted by the same proportion.
The consumer price index and its impact on the sliding wage scale are published monthly by Statec.
The employer must, where applicable, increase all wages by 2.5%.
For posted workers in Luxembourg, the indexation only applies to the minimum wage and not to higher wages.