Draft Bill 8459, which proposes amendments to Article L.222-9 of the Luxembourg Labor Code regarding the social minimum wage, is anticipated to be adopted soon, with its provisions set to take effect on January 1, 2025 (the “Draft Bill”).
- Adjustment to the Luxembourg social minimum wage
The modifications outlined in the Draft Bill should introduce the following changes to the monthly and hourly rates for both non-qualified and qualified employees:
- Non-qualified employees:
- Minimum monthly wage: EUR 2,637.79 (index 944.43), representing an increase of EUR 66.86.
- Corresponding hourly rate: EUR 15.25.
- Qualified employees:
- Minimum monthly wage (inclusive of the 20% increase per Article L.222-4 of the Labor Code): EUR 3,165.35 (index 944.43), reflecting an increase of EUR 80.24;
- Corresponding hourly rate: EUR 18.30.
- Impact on settlements
The Draft Bill is expected to have a significant impact on settlements. The social minimum wage serves as a benchmark for determining several financial thresholds, including the tax-exempt threshold for “settlement indemnity.”
Currently tax-exempt up to twelve times the monthly minimum wage for non-qualified workers, this threshold should rise to EUR 31,653.48 as of January 1, 2025, instead of EUR 30,851.16.
- Employers’ responsibilities
Employers are expected to ensure that payroll systems are updated to reflect the new wage rates by the January 1, 2025, deadline.