COVID-19 Partial Unemployment: Employer/Employee Q&A (Part 3)

What procedure and how long does it take?

Since March 27, 2020, employers or their agents (such as lawyers or trustees) are obliged to submit the application via the internet using the form ad hoc available online via the Myguichet.lu website, using a Luxtrust product (Token, Smartcard or Signing stick) or an electronic identity card.

The request will be processed automatically by ADEM.

Employees affected by short-time working do not need to take any action.

Short-time working is granted to the employer for the month in which the request is made and, if expressly requested, for the preceding month. In all cases, the employer must renew the request each month.

How much and what limits?

The compensation allowance is paid to the employer by the Employment Fund, which is part of ADEM. Its amount is equivalent to 80% of the gross remuneration of employees benefiting from short-time working, limited to 2.5 x the social wage of an unskilled worker aged over eighteen.

This gross remuneration is determined by the highest basic salary paid during the last three calendar months prior to the start of the short-time working period, plus the average of salary supplements and accessories (only those elements payable monthly in cash, with the exception of overtime pay and bonuses provided for in collective bargaining agreements, laws or regulations) during the last twelve calendar months prior to the start of the short-time working period.

In addition, the reduction in the volume of work covered by the short-time working scheme may not exceed 1,022 hours per calendar year for a full-time employee, this hourly volume being prorated for a part-time employee.

Today, for more direct and effective financial support to companies, as soon as the employer accepts the request for short-time working, an advance corresponding to 80% of the remuneration of employees benefiting from short-time working is paid by ADEM.

It should be noted that the minimum social wage for unskilled workers (2,141.99 euros at index 834.76) is guaranteed to employees: should the amount of this compensatory allowance be lower than this wage, the difference will be covered and paid by the Employment Fund for the duration of the crisis.

At the end of the month concerned, the employer must draw up a detailed statement of the hours actually worked by the company. On the basis of this statement, ADEM will calculate the amount of compensation actually due from the Employment Fund. If it turns out that the advance paid to the employer was too high in relation to the hours actually worked by his company, he will have to repay the overpayment to the Fonds pour l’emploi, or ADEM.

To avoid excessive reimbursements, it is preferable for the employer to be as precise as possible in his request as to the estimated number of hours lost, bearing in mind that it is not possible to predict the actual evolution of the company in the current crisis.

Of course, the compensation paid to the employer must be used exclusively to pay the employees concerned: it is strictly forbidden to use the state funds received for any other purpose, failing which the employer will be liable to penalties (including fines, immediate withdrawal of the benefit of short-time working and the obligation to return all the sums received in respect of the benefit of short-time working).

At the end of the month, employees benefiting from short-time working receive payment from their employer of this compensation for the hours worked, within the above-mentioned limits. For any hours worked by the employee during the month affected by short-time working, employees will receive their remuneration as set out in their employment contract.

The employer is obliged to make the social security and tax deductions normally applicable to any remuneration and compensation paid to employees. Employers’ social security contributions normally apply to both remuneration and compensation paid to employees, with the exception of accident insurance and family benefit contributions.

Protection against dismissal?

As a beneficiary of state financial support to pay its employees, the employer must in return undertake not to lay off employees for reasons other than personal reasons, i.e. economic reasons in the broadest sense of the term.

Employees are thus ” protected ” from redundancy for economic reasons for the duration of the short-time working scheme, with the employer regaining the right to dismiss them as soon as the short-time working scheme ends.

Consequently, even during the period of short-time working, the employer retains the right to dismiss the employee with notice for personal reasons, or to dismiss the employee with immediate effect for serious misconduct.

Cumulation with other measures?

The issue was clarified during the crisis: short-time working takes precedence over family-related leave under COVID-19. The employee, benefiting from short-time working, is available to look after one of the household’s children. Neither the employee nor any other member of the employee’s household will then be eligible for family-related leave under COVID-19.

However, if the employee is called back to work by the employer, he or she or another member of his or her household may then take family leave under COVID-19 to look after the child.

If an employee benefiting from short-time working falls ill during the period of short-time working, he or she will no longer benefit from short-time working and will be financially covered by the National Health Fund in respect of this illness. In this case, the employee can again benefit from short-time working after the period of incapacity to work has expired.