Luxembourg has introduced new legislation applying to immigration. Bill of law no. 8227 was exempted from the second constitutional vote on 21 July 2023 and the law of 7 August 2023 1, published on 28 August 2023, came into force on 1 September 2023 (the "Law").
The Law provides for stricter rules and penalties concerning the employment of third-country nationals who are resident without authorisation or do not have a work permit, but it also introduces certain relaxations on hiring third-country workers, and restrictions on granting residence permits for self-employed workers, as summarised below.
1. Employment of third-country nationals in an irregular situation or resident without authorisation
The Law tightens up the relevant provisions, with the intention of dissuading employers from using workers in this position.
Penalties for employing workers in an irregular situation: the penalties, which previously applied only in relation to third-country nationals resident without authorisation, are extended to third-country nationals who are legally resident but do not have a work permit. Penalties include the payment of salaries and related social security contributions, fines and prison sentences. The administrative fine is increased from EUR 2,500 to EUR 10,000 per third-country national in an irregular situation or resident without authorisation.
Aggravating circumstances: the Law sets out what is meant by aggravating circumstances that may give rise to harsher penalties for the employment of third-country nationals in an irregular situation or resident without authorisation. The following are aggravating circumstances: persistent repeated offences, particularly abusive working conditions 2, simultaneous employment of at least two workers who are in an irregular situation or resident without authorisation, employment of a third-country national whom the employer knows to be a victim of human trafficking and/or employment of a third-country minor who is resident without authorisation or in an irregular situation.
Increased fines for aggravating circumstances: the maximum fine rises from EUR 20,000 to EUR 125,000 (the maximum is doubled for legal entities). Prison sentences remain unchanged, ranging from eight days to one year.
Presumption of three months' employment: as with a worker resident without authorisation, the employment relationship of a worker in an irregular situation is presumed to have been in place for three months unless there is written proof to the contrary. It will thus be difficult for an employer to rebut this presumption if they have not put in place a contract in the due and proper format.
Identifying offences: the Inspectorate of Labour and Mines (l'Inspection du Travail et des Mines) has the authority to identify offences relating to the employment of third-country nationals who are resident without authorisation or in an irregular situation. Employers must therefore keep copies of residence permits and work permits in Luxembourg.
Obligation to have a work permit: to make the Luxembourg law on immigration 3 easier to understand, the Law embeds into it the principle that any third-country national intending to work in a salaried activity must have a work permit, unless exempted.
2. Relaxation of conditions for hiring third-country nationals
Exemption from work permit requirements: third-country nationals who provide a service in Luxembourg for a period not exceeding three months are exempt from the requirement to obtain a work permit (previously, this exemption only applied to the provision of services within the same group of companies).
ADEM certificate: before hiring a third-country national, an employer previously had to wait for three weeks after declaring the vacancy, while the National Employment Agency (Administration pour le Développement de l'Emploi, known as the ADEM) checked whether there were any jobseekers on the Luxembourg labour market who met the employer's criteria, before being able to apply for a certificate authorising recruitment from a third country. The Law reduces this waiting period:
- If the vacancy for which the certificate attesting to the right to recruit is requested concerns a profession on the list of professions suffering from severe labour shortage, the ADEM will issue the certificate within five working days.
- If this is not the case, the ADEM will check whether it has any
candidates suited to the employer's needs within seven days of
issuing its acknowledgement of receipt (which it must issue within
two working days of receiving the request for a certificate):
- If, at the end of this period, no individual meets the required profile for the vacancy, the ADEM will issue the certificate within five working days.
- If there are any individuals who meet the required profile for the vacancy, the ADEM has a further 15 days to propose candidates to the employer. Employers will be able to reject the ADEM candidates by giving detailed written reasons for their rejection, which the ADEM will review. If the employer complies with this obligation and the ADEM deems the rejection to be justified, it will issue a certificate within 10 working days.
The aims are to give employers more certainty when planning recruitment and to attract talent to Luxembourg during a labour shortage.
Opening up the employment market to family members: family members of third-country nationals holding a Luxembourg residence permit will be permitted to enter employment or self-employment as soon as they arrive in Luxembourg.
3. New conditions for self-employed workers to obtain a residence permit
Presence required in Luxembourg: to obtain a residence permit, a self-employed person must prove that their presence in Luxembourg is necessary to ensure the effective day-to-day management of their business.
Length of residence permit on renewal: the duration can now vary between one year and three years.
The Law came into force on 1 September 2023.
1. Law of 7 August 2023 amending: 1° the Labour Code; 2° the law of 29 August 2008 on the free movement of persons and immigration, as amended; 3° the law of 18 December 2015 on the reception of applicants for international protection and temporary protection, as amended.
2. Working conditions, including those resulting from discrimination based on gender or other factors, where there is a striking disparity compared to the working conditions of legally employed employees, affecting the health and safety of individuals in particular, and which undermine human dignity (article L.572-2 point 8 of the Labour Code).
3. Law of 29 August 2008 on the free movement of persons and immigration, as amended.
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.