Hiring in Luxembourg can be confusing, but it’s easier when you know what you’re doing. If you want to hire remote talent in Luxembourg, you have two options: Hire people as contractors, or hire them as employees.
If you want to successfully hire in
Luxembourg
, you have two options:
Laws about hiring contractors are significantly more simple in
Luxembourg
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Luxembourg
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Luxembourg
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Luxembourg
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Luxembourg
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Luxembourg than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Luxembourg.
PTO is calculated by the:
Employees receive 26 working days of paid leave per year. In addition, certain employees automatically receive additional leave:
There are 11 public holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
Maternity leave in Luxembourg is 20 weeks and can begin 8 weeks before the expected due date.
To be eligible, the woman must have been covered by the mandatory health insurance for at least 6 months within the last 12 months before maternity leave.
In addition, the woman must notify their employer at least 12 weeks before the expected due date.
Social insurance pays for maternity leave and cannot be lower than the minimum wage and is capped at 5 times the minimum wage.
Paternity leave is 10 days. The father must notify their employer at least 2 months in advance of when the leave is intended to be taken, otherwise, this leave can be reduced to 2 days.
In addition, this leave does not have to be taken consecutively and can be taken within 2 months of the birth of the child.
There are 2 types of parental leave and each leave can be taken once per child:
Both leaves can be taken either in full, partially, or split with the other parent and are based on the number of hours in the employee’s contract:
Split or partial leave is at the discretion of the employer.
To be eligible:
Instead of wages, an allowance is given by the Children’s Future Fund.
None.
None.
None.
Termination in Luxembourg must be done in writing, however, no reason is required by either side unless the cause is immediate dismissal. However, this information must be provided upon request.
For employers with more than 150 employees, a hearing must be conducted before the employee is dismissed. For employees with at least 15 employees, the employer must notify the Economic committee of the dismissal.
The notice period depends on the length of employment:
Notice starts:
It is also possible to pay in lieu of notice.
Severance pay is determined by the length of employment:
The minimum probation period is 2 weeks and generally is determined by the employee’s salary and qualifications:
A full time workweek is 40 hours or 8 hours per day.
There are strict rules on overtime as it is considered something that is considered abuse if the employer requests overtime work in excess and the employee can refuse.
An employee can work 2 hours of overtime per day and cannot exceed 8 hours per week. In addition to this, a pregnant woman cannot be forced to work overtime, and overtime for adolescents is forbidden.
Overtime can be compensated either through payment at the rate of 150% of the regular pay or time off.
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