According to the Luxembourg's Labour Code, wage indexation is a matter of public order provision. This means that it applies to all employees, regardless of their salary level. Employers are legally obliged to comply with this wage increase.
Based on provisional results published by STATEC (Luxembourg's National Institute of Statistics and Economic Studies), the annual inflation rate of the national consumer price index stands at 1.7% for the month of April 2025. As a result, it triggers a new indexation.
Consequently, the new applicable value of the wage index scale is set at 968.04 points (formerly 944.43 points) and will come into effect on 1 May 2025.
Effective from that date, a 2.5% increase will be required for all salaries, wages, and pensions.
Failure to comply with this obligation may result in a fine, for employers, ranging from EUR 251 to EUR 25,000. In the event of a repeat offence within two years, the maximum fine may be doubled.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
