Minimum Social Wage And Salary Indexation In Luxembourg

Social minimum wage and salary indexation in Luxembourg

Minimum Social Wage and Salary Indexation in Luxembourg,Luxembourg Minimum Social Wage and Salary Indexation:- The salary is a direct reward for the work done by the employee for their employer within the context of a working relationship. It could include a variety of financial or in-kind components.

When the employment contract is finalized, the salary is typically freely decided by the two parties.

Employers must, however, adhere to the social minimum wage that is appropriate for the employee’s position.

Two different types of adjustments may have an impact on salaries:

upping the social minimum wage;
indexing salaries.

Who is Affected?

The amount of salary and pay adjustments are typically freely negotiable between:

The employee, who will be classified as either a skilled or unskilled worker depending on their experience and training, and the employer, who must nonetheless adhere to the applicable social minimum wage based on the employee’s qualifications,

Employers who send their employees on temporary assignments to another EU member state are required to pay those employees at least the local minimum wage.

Prerequisites

Depending on the employee’s level of professional qualification, a minimum wage may be required. In order to be regarded as a skilled worker, the employee must:

Or, if they lack a degree, they can demonstrate that they have at least 10 years of relevant professional experience (if a certificate for the needed degree already exists)
or demonstrate that you have at least six years of relevant experience in a trade or profession that requires specific technical skills but for which there is no formal certificate following vocational training.

If a collective agreement already exists, the salary scale outlined in this agreement will be used to determine the appropriate pay and pay adjustments based on the position and necessary credentials.

The worker’s qualifications should, in theory, be disclosed to the employer at the time of hiring. The worker cannot ask for the social minimum wage for skilled workers until they have informed the employer of their qualifications. To qualify as a skilled worker, an individual must offer sufficient documentation of their credentials (through diplomas or professional work experience).

The first steps

Additionally, the employer must guarantee equality within the company, i.e.,

equal pay for equal or similar work performed by men and women; and
Equal pay for workers who are employed under a fixed-term contract (CDD) and those who are employed under a permanent contract (CDI). In proportion, part-time and full-time employees are subject to the same rules.

For Examples:

Women who perform equal-value work cannot be paid less than men under an employment contract or collective agreement.
When employees on a fixed-term employment contract perform a job of equal value to an employee on a permanent employment contract, an employment contract or collective agreement may not stipulate that they will be paid less.

How to proceed

minimum social wage

Under no circumstances may the salary fall below the social minimum wage.

Social minimum wage
(At the current index value) EUR 2,313.38

The social minimum wage that applies is:

20% more for a skilled worker and
decreased by 20% to 25% when an adolescent worker was involved.

The indexation of salaries

On the other hand, salaries, wages, and social contributions—including the social minimum wage—are adjusted in line with changes in the cost of living.

Salaries are typically adjusted by the same percentage when the consumer price index during the prior semester increased or decreased by 2.5%.

The National Institute for Statistics and Economic Studies (Institut national de la statistique et des études économiques-Statec) releases a consumer price index report each month that includes information about how it affects the sliding wage scale.

Where applicable, the employer is required to raise all wages by 2.5%.

The indexation only affects the minimum wage for posted workers in Luxembourg; it does not affect higher wages.

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Changing the required social benefits at a minimum

According to changes in the average wage level, the social minimum wage, pensions, accident pensions, and REVIS (social inclusion income) may all be adjusted.

The level of the social minimum wage may be adjusted to partially or fully offset increases in average wage levels relative to the social minimum wage.

The Memorial A contains the laws that modify labor law in order to raise the social minimum wage.

Where appropriate, the employer must raise the social minimum wage recipients’ pay to the new rate.