Last updated on: September 13th, 2023
The Labor Law in Luxembourg is mainly regulated by the Labor Code, 2006 (last amended in 2021). The Law governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, and other employment conditions.
Hours & Pay Regulations
Employees who have completed at least 3 months of uninterrupted service with the same employer are entitled to a minimum of 26 working days of annual leave with pay. Paid annual leave is counted towards the computation of weekly working time.
All working days are calendar days, except Sundays and public holidays. Where the weekly working time is spread over 5 working days, the rest day shall not account for vacation leave. For employees whose weekly working hours are spread over 5.5 or 6 working days, the week leave shall in all cases be counted at the rate of 5 working days.
During the first year of employment, paid leave accrues at a rate of 1/12th per full month of work. A month that exceeds 15 days is deemed a full month’s work. An additional 6 working days of leave is granted to war-injured veterans, work-related accidents, and employees with a physical, mental, sensory, or psychical handicap, who have been recognized as disabled employees. Technical employees of mines and mining are entitled to an additional paid leave of 3 working days a year.
An employer can refuse to provide annual leave to the employee as long as his unjustified absences, calculated in the year already elapsed, exceed 10% of the time he normally should have worked. Unjustified absence does not constitute absences due to illness or accident, force majeure, imprisonment of the employee, statutory holidays, and public holidays or days of legal strike.
If during the annual leave the employee falls ill as a result of which the annual leave cannot be enjoyed due to the illness as provided by the medical certificate, such days of leave are not considered for the purpose of annual leave. A new duration of the leave must be agreed upon between the employer and the employee in such cases.
The extension of the reference period is conditioned by the granting of days of leave
The choice of a legal reference period exceeding one month gives the employees concerned the right to additional days of leave.
- in the event of a reference period lasting between more than 1 month and a maximum of 2 months, additional leave of 1 and ½ days per year,
- in the event of a reference period lasting between more than 2 months and a maximum of 3 months, additional leave of 3 days per year,
- in the event of a reference period lasting between more than 3 months and a maximum of 4 months, an additional leave of 3 ½ days per year.
Taking of leave – Annual leave generally must be taken during the calendar year in which it is earned. If the business needs of the employer have precluded an employee from taking leave during the calendar year, however, the deadline to take annual leave may be extended to March 31 of the following year. Employees need not take the entire 25 days in one increment but must take at least 12 consecutive working days off at some point during the year.
Termination of Employment
When the employment contract ends during the calendar year, the employee shall be entitled to 1/12th of the annual leave without prejudice to the legal or contractual provisions relating to notice of termination. If the working month exceeds 15 calendar days it shall be counted as the whole working month.
If, after the termination of the employment contract by either the employer or the employee, the employee leaves the employment before having enjoyed all the leave due, the allowance corresponding to the leave not yet taken shall be paid to him at the time of the departure.
If, after termination by either the employer or the employee, the employment contract is re-entered within months following termination, such termination shall not be considered as termination of the employment contract resulting in employee loss of entitlement to annual leave.
Annual Leave Pay
The employee is entitled to compensation equal to the average daily wage for the 3 months immediately preceding the start of enjoyment of the leave for each day of leave. The average daily wage is established on the basis of the gross monthly wage of the employee. The pay is calculated by dividing the gross monthly salary, including salary and other benefits, by 173 hours.
For employees whose salary is set as a percentage, on turnover or subject to pronounced variations, the average salary for the previous 12 months is used as the basis for calculating holiday pay. Labor Code, 2006 (last amended 2021), L. 233-2 to 233-15.
Effective February 1, 2023, the national minimum wage in Luxembourg is €2,936.48 per month.
An employee is entitled to a sickness benefit in the event of incapacity for work due to non-occupational illness or accident. The law does not impose a period of entitlement to cash sickness benefits.
In the event of illness or accident not related to work, the employee must inform their employer personally or through an intermediary from the 1st day of the absence of the reasons for absence and provide no later than the 3rd day of absence, a medical certificate from the doctor certifying the incapacity and specifying the estimated duration of the sick leave. The employer must take care of the payment of the wages of the employees in the event of illness or accident.
Pay – During the period of sick leave, the employer must pay the employee an amount corresponding to the full gross monthly salary until the end of the calendar month in which the 77th day of incapacity for work falls(which means that on average the employee receives the salary from their employer for 13 weeks). After this period, the employee receives sickness benefits from the Sickness Insurance Fund. Employees have the right to sickness benefit for a period of 52 weeks within a period of 104 weeks. Compensation is paid by the Health Insurance Fund.
The employee must present a medical certificate before the 10th week indicating the continued incapacity for work. Compensation is continued subject to the favorable opinion of the Medical Control Service. The employer can recover part of the sickness benefit paid by the employer’s mutual fund, a social security institution set up for this purpose. The employer’s mutual insurance company reimburses 80% of the sickness benefit paid by the employer within 77 days. After this period, the benefits are paid directly by the Health Insurance Fund. Labor Code, 2006 (last amended 2021), L.121(6).
Pregnant employees are entitled to at least 20 weeks of paid maternity leave, beginning 8 weeks before the due date known as pre-natal leave and continuing for 12 weeks after the birth of the child (postnatal leave). The maternity allowance is paid by the National Healthcare Fund.
When the birth occurs before or after the expected date, the remaining maternity leave is added to the postnatal leave. Maternity leave is extended by 4 weeks for multiple births or premature birth. At the end of maternity leave, the employee may delay returning to work for 1 year to take care of her child without being subjected to termination. The employee continues to accrue annual leave while on maternity leave.
The employee benefits from a work exemption, without loss of salary, to attend prenatal examinations, in the case where these examinations must take place during working time.
Breastfeeding Break – At the employee’s request, the employee must be granted a breastfeeding break during a normal working day divided into two periods of 45 minutes each, taking place respectively at the beginning and at the end of the daily schedule. If the working day is only interrupted by a 1-hour break, the two periods can be reduced to a single breastfeeding time of at least 90 minutes. Breastfeeding break duration is counted as time worked and entitles the employee to normal wages. Labor Code, 2006 (last amended 2021), L. 332.1 to 332.4, 336.2-336.3.
A father or, where applicable, the person recognized as an equivalent second parent, is entitled to 10 days’ leave with pay for the birth of a child.
The days of leave can be split for a full-time employee. For part-time employees, the duration of the paternity leave is prorated to the weekly working time of the employee. Paternity leave is limited to one leave per employee and per child, which means that in the event of multiple births, the father or equivalent second parent will be entitled to one leave for each child. Labor Code, 2006 (last amended 2021), L. 233-16.
Employees are entitled to family leave to take care of a child or adopted child under the age of 18 who is suffering from a serious illness or injury. The same duration of leave is also provided in the event of quarantine of the child under the age of 13 for a measure of isolation, eviction, removal, exclusion, or home maintenance, for public health reasons, which has been decided or recommended by the competent national or foreign authority, with a view to limit the spread of an epidemic. The length of leave for family reasons depends on the age of the child and is established as follows:
- 12 days per child if the child is between 0 and less than 4 years old;
- 18 days per child if the child is aged 4 to less than 13 years old;
- 5 days per child if the child is over 13 years of age up to the age of 18 and hospitalized.
Both parents cannot take leave for family reasons at the same time. The duration of the leave for family reasons may be extended for children suffering from an illness or a deficiency. The maximum duration of the extension is limited to a total of 52 weeks for a reference period of 104 weeks which ends the day before the first day covered by the medical certificate. The period of leave for family reasons shall become a part of the period of incapacity for work due to illness. Labor Code, 2006 (last amended 2021), L. 234-51-234.54.
Support leave is available to an employee who wants to spend time with or care for a parent, sibling, spouse, or partner who is suffering from a terminal illness. The employee is entitled to 5 working days per case, per year of support leave, which does not have to be taken together.
The support leave ends on the date of the death of the person at the end of their life. Support leave can only be granted to one person over the same period. However, if during this period two or more employees want to share the support of the person at the end of their life, they can each benefit from part-time support leave, without exceeding the total duration of the leave by 40 hours. The period of support leave shall be assimilated to the period of incapacity for work due to illness or accident. Labor Code, 2006 (last amended 2021), L. 234.65 -234.68.
Employee who –
- are affiliated with the social security system in Luxembourg for a period of at least 1 year of continuous service prior to the entitlement of leave,
- does not exercise any professional activity during the period of full-time parental leave or during the period of part-time parental leave with the same employer and whose total monthly working time actually performed does not exceed half of the working time performed before the parental leave or reduced working time either at a rate of 20 percent per week or over 4 periods of 1 month for a maximum period of 20 months;
- brings up the child or children concerned in their home and devotes themselves mainly to their education for the duration of the parental leave.
shall be entitled to parental leave as long as the children have not reached the age of 6. The 6-year period is extended to 12 years for the parents of one or more adopted children. If the parent changes employer during the 12-month period preceding parental leave or during the leave, the period of parental leave may be granted subject to the agreement with the new employer.
Each parent is entitled to 4 or 6 months of full-time parental leave. Each beneficiary parent holding an employment contract, via applicable in the establishment/company by virtue of the law or the collective agreement, may take, in agreement with the employer, parental leave in the following forms:
- fractional parental leave with reduced working hours at the rate of 20 percent per week for a period of 20 months period;
- parental leave split over 4 one-month periods for a maximum period of 20 months.
Each parent holding an employment contract, whose working time is equal to or greater than half of the normal working hours may take, in agreement with the employer, a part-time parental leave of 8 or 12 months. In this case, the professional activity shall be reduced by half of the working time performed before the parental leave is determined. In the event of a multiple birth or multiple adoptions, the right to parental leave is open for each of the children.
First Parental Leave – One of the parents shall take the parental leave, following the maternity leave or the reception leave. Parents who are alone with the child or children shall not lose the right of first parental leave if they do not take it after maternity leave or reception leave.
In the event that maternity or reception leave is not due or has not been taken, any parental leave due must be taken from the first day of the third week following childbirth or, in the case of adoption, from the date of the adoption of the child. If both parents, fulfilling the conditions, simultaneously request parental leave, they indicate in their requests respectively, which of the two takes the first parental leave and which takes the second parental leave. In the absence of a common agreement, the first parental leave goes to that of the parents whose surname is the first in alphabetical order.
The employer is obliged to grant the first full-time parental leave requested. The employer can refuse the leave if the request has not been made in the forms and deadlines specified. The parent who has not taken the first parental leave can take parental leave until the age of 6 of the child. In the event of the adoption of a child, parental leave can be taken within a period of 6 years from the end of reception leave or, if reception leave has not been taken, from the date of the adoption until the child completes 12 years of age. The start of this parental leave, called “second parental leave” must be before the date of the 6th till the 12th birthday of the child.
The parent who intends to exercise his right to the second parental leave must notify the request of employer, by letter or mail with acknowledgment of receipt, at least 4 months before the start of parental leave. The employer is obliged to grant the second full-time parental leave requested.
Postponement of Leave – The employer may exceptionally request for the postponement of the second parental leave to a later date under specified conditions like a simultaneous request for parental leave, the specific nature of work, and the demand of the seasonal nature of work if the employee is a senior executive. The postponement of leave shall not be justified in case of serious illness or accident of the child, due to academic or behavioral problems.
In the event of postponement of the leave, the employer must propose to the employee within 1 month of the notification a new date for the leave which cannot be more than 2 months after the date of the start of the requested leave. When the work is of a seasonal nature, it may be postponed until after the period of a seasonal nature. by simple request, within fifteen days from the notification.
Parental leave cannot be granted twice to the same parent for the same child or children. Parental leave that is not taken by one of the parents is not transferable to the other parent. The starting parental leave ends on the date of the child’s death or when the court stops the adoption procedure request. In this case, the beneficiary returns to his job no later than 1 month after the date of death or the rejection of the adoption request.
In the event of the death of a child, multiple birth, or adoption before the extension period of parental leave, the duration of leave is reduced accordingly. In the event of the death of the mother before the end of the maternity leave or in the event of the death of the parent receiving the first parental leave before it expires, the other parent can take parental leave following the death after having duly informed the employer. The same provision applies to the other parent in the event of the death of the beneficiary parent.
Flexible Work Arrangement – Any employee with at least six months of continuous service permits an employee to request a meeting with the employer in order to ask for the introduction of flexible working arrangements. Employees concerned are those who are the parent of a child under the age of nine, or who provide personal care or assistance to a family member (son, daughter, mother, father, spouse, or partner) or to a person living in the same household who requires considerable care or assistance for serious medical reasons.
During the period of full-time parental leave, the employment contract is fully suspended. During the duration of the part-time parental leave or periods of split parental leave, the employment contract is partially suspended. In the event of pregnancy or fostering of a child during parental leave entitlement, for the same parent, the parental leave may be interrupted. The remaining portion of parental leave is attached to the new maternity leave. The new parental leave following the maternity leave to which one of the parents is entitled is then automatically postponed until the end of the part of the parental leave attached to the maternity leave and must be taken consecutively.
During the period of parental leave, the employer is required to keep the employee’s job or, if this is not possible, a similar job corresponding to the employee’s qualifications and with at least an equivalent salary. Labor Code, 2006 (last amended 2021), L. 234.43 – 234.47.
In the event of adoption by two spouses of an elderly child who has not reached the age of 12, the employed parent under an apprenticeship contract or an employment contract shall be entitled to a leave lasting 12 weeks on presentation of a certificate issued by the court according to which the adoption procedure is initiated. If both parents are employed under a contract they designate the leave by mutual agreement to one of the employees requesting the reception leave.
When the foster leave has been requested and granted to a parent, it shall not be granted by the other parent. If there is only one employed adopter, then the single adopter may benefit from the foster leave, unless the child who has not reached the age of 12 years is not living with the adopter or if it is the child of the employee’s spouse or partner. Labor Code, 2006 (last amended 2021), L. 234-56.
Employees are entitled to paid leave for the following:
- 1 day of leave for the death of a second-degree relative of the employee or of their spouse or partner;
- 10 days in the event of reception of a child under 16 years of age with a view to adoption, except in the case of benefit of the reception leave provided separately, which can be taken from the day the child actually lives in the same household as that of the employee or from the date the adoption takes effect;
- 1 day over a period of employment of twelve months for reasons of force majeure linked to urgent family reasons in the event of illness or accident making the immediate presence of the employee essential;
- 5 days in a twelve-month occupation period to provide personal care or personal assistance to a family member as defined below or to a person who lives in the same household as the employee and who requires considerable care or assistance for serious medical reasons which reduces their capacity and autonomy rendering the family member or the aforementioned person incapable of compensating or coping independently with physical, cognitive or psychological deficiencies or constraints or requirements related to health and which is certified by a doctor.
- 1 day of leave for each parent in the event of the marriage of a child;
- 2 days of leave in the event of a move over a period of three years of employment with the same employer, unless the employee must move for professional reasons;
- 3 days of leave for the death of the spouse or partner or of a first-degree relative of the employee or their spouse or partner;
- 3 days of leave for the marriage and 1 day for the employee’s declaration of partnership;
- 10 days of leave in the event of fostering a child under the age of 16 with the purpose of adoption, except in the case of an employee benefiting from adoption leave;
- 5 days of leave in the event of the death of a minor child.
The extraordinary days of leave provided for reception of child of upto age 16 and paternity leave shall correspond to eighty splittable hours for an employee whose normal weekly working time is forty hours. For employees whose weekly working time is less than forty hours, who work part-time, or who have several employers, these hours of leave are set in proportion to the weekly working time retained in the collective employment agreement or in the employment contract concerned. These hours must be taken within two months following the birth of the child respectively, in the case of adoption, the actual move of the child into the same household as that of the employee, or the effective date of adoption. These two extraordinary leave are limited to one leave per employee and per child and cannot be combined.
The employer must be informed with two months’ notice of the foreseeable dates on which the employee intends to take paternity or reception leave. This written information must be accompanied by a copy of the medical certificate attesting to the expected date of delivery or, where applicable, supporting documentation attesting to the expected date of the reception of a child under sixteen years of age in view of its adoption. If the birth takes place two months before the expected date, the notice period does not apply.
The extraordinary days of leave for force majuere and personal care and assistance correspond to 8 or 40 hours respectively, splittable for an employee whose normal weekly working time is 40 hours. For employees whose weekly working time is less than 40 hours, who work part-time, or who have several employers, these hours of leave are set in proportion to the weekly working time retained in the collective employment agreement or in the employment contract concerned. The employee who benefits from one of these leaves is obliged to notify, personally or through an intermediary, orally or in writing, the employer or a representative of the latter no later than the same day of the absence. .
With the exception of paternity leave and fostering leave, extraordinary leaves can be taken only when the event occurs for the leave and must be taken consecutively. However, when an extraordinary day of leave falls on a Sunday, a legal public holiday, a non-working day, or a compensatory day of rest, it must be carried over to the first day of the following working week following the event or the end of the extraordinary leave. If the event occurs during a period of annual leave, it is interrupted for the duration of the extraordinary leave. Labor Code, 2006 (last amended 2021), L. 233-16.
Employees are entitled to training leave intended to allow employees to participate in courses, to prepare exams and participate in them, write dissertations, or perform any other work related to eligible training. Employees, normally employed at a workplace located in Luxembourg territory, may benefit from this leave and are required to have at least 6 months of employment with the same employer. The request for leave must be notified by the employer.
The leave may be postponed if the absence resulting from the requested leave creates risks of having a major repercussion which can be detrimental to the operation of the workplace.
The total duration of training leave may not exceed 80 days for each employee during their career. The maximum number of days of attributable training leave is 22 days over a two-year period. The leave can be divided, the minimum duration of the training leave being 1 day.
For employees working part-time, the days of leave for training are calculated proportionally. The duration of the training leave shall not be counted against the annual leave. The total number of days of training leave, which the beneficiary can claim depends on the number of hours required for the training. This number of hours is either defined by the training organization or determined on the basis of school class schedules at training institutes.
The number of hours invested is converted into the number of working days by dividing the number of hours by 8. The number of days of training leave is obtained by dividing the quotient thus obtained by 3. Employees benefiting from training leave are entitled, for each day of leave, to a compensatory allowance equal to the average daily wage. The compensatory allowance is paid by the employer. The State reimburses the employer the amount of the compensation. Labor Code, 2006 (last amended 2021), L. 234-59-234.64.
Employees fulfilling the mandate of a member of a professional chamber, member of a body of an institution of social security, an assessor with the Labor Court, assessor-insured, and assessor-employer of the Board of Arbitration Insurance and the Higher Social Insurance Council are entitled to special leave. A Grand-Ducal regulation may set the terms and determine the number of working days or parts of working days that are considered under this leave. During this leave, employees who exercise one of these mandates or one of these functions may be absent from their place of work while maintaining their normal salary. Labor Code, 2006 (last amended 2021), L. 234.71.
A special leave known as “linguistic leave” is intended to allow employees to participate in language courses. Employees who have worked at least for a duration of 6 months with the same employer shall be entitled to this leave. The total duration of linguistic leave cannot exceed 200 hours. This maximum duration must be divided into two sections of a minimum of 80 hours and a maximum of 120 hours.
The leave can be divided, the minimum duration of the linguistic leave being 30 minutes per day. For employees working part-time, the hours of leave are calculated proportionally. The duration of the linguistic leave cannot be counted against the annual leave.
Employees benefiting from language leave are entitled, for each hour of leave, to a compensatory allowance equal to the average hourly wage. The compensatory allowance is paid by the employer. The State reimburses the employer 50% of the amount of the allowance compensation and the remaining 50% shall be paid by the employer’s share of social contributions. Labor Code, 2006 (last amended 2021), L. 234.72 – 234.77.
Parents of students who are members of the national school board are entitled to 2 half-days leave per month. During this leave, the employee may be absent from the workplace with pay. In the private sector, recipients of leave are entitled, for each half-day of leave, to a compensatory allowance equal to half of the average daily wage. The compensatory allowance is paid by the employer. The State reimburses the employer.
Parents of children who are members of the national parents ‘representation are entitled to 8 days’ leave per year. During this leave, they may be absent from the workplace with pay. In the private sector, recipients of leave are entitled, for each half-day of leave, to a compensatory allowance equal to half of the average daily wage. The compensatory allowance is paid by the employer. The State reimburses the employer. Labor Code, 2006 (last amended 2021), L. 234.78 – 234.79.
Youth leave is leave provided with the aim of which is to support the development of activities in favor of young people at a local, regional and national level. The duration of full youth leave shall not exceed 60 days. No employee shall benefit from youth leave of more than 20 days per 2-year period. This leave can be divided. Each fraction must have at least 2 days, except if it is a coherent series of courses, each of which lasts only 1 day.
The leave shall be paid in advance by the employer and the employer can get it reimbursed from the State. Labor Code, 2006 (last amended 2021), L. 234.1 – 234-4.
Special leave may be granted to elite athletes, and athletes likely to represent Luxembourg who is part of the national adult individual or team selection with an accredited sports federation, athletes registered with an affiliate club of an accredited sports federation, with a view to participating in official international club competitions, athletes who are members of an accredited sports federation that is participating in an official international competition, administrative and technical managers, in order to support their training and allow them to perform their duties, individuals who want to pursue a course of study with the École Nationale de l’Éducation Physique et des Sports, volunteers (individuals) selected by an accredited sports federation, and to personnel who are supervising as well as to judges and referees in order to ensure the best representation in international competitions like Olympic Games, etc. Leave is supported by the State within the budgetary limits.
The duration of sporting leave varies depending on the specific person eligible and the Law sets out the number of hours available to athletes, on the one hand, and clubs and federations, on the other.
Sporting leave may range from two working days (administrative managers) to 90 working days (athletes training for the Olympic or Paralympic Games). However, an eligible person is not able to take more than 40 days per year in total (except for elite athletes who are training for a specific event 3 and their technical managers).
The number of days of leave that can be granted by accredited sports federations and affiliate clubs depends on their membership numbers as of 1 January every year.
Sporting leave cannot be combined with holiday leave in case this results in a total absence that is longer than the employee’s total annual leave entitlement unless this has been agreed with the employer. Sporting leave can be divided into units of not less than four hours each. It cannot be transferred from one calendar year to another. (last amended 2021), L. 234.9.
Employees who provide volunteer emergency services such as fire and rescue services shall be entitled to leave not exceeding 7 working days per year. The total duration of the special leave may not exceed 42 working days for each beneficiary during the employee’s career within the emergency services. The special leave can be divided, and each fraction shall not exceed 4 hours.
The duration of the special leave cannot be counted against the annual leave provided. Unless the employer agrees, special leave cannot be attached to a period of annual leave or sick leave. Employees shall continue to receive their salary during the period of leave. Salaries paid during special leave are payable by the State with regard to voluntary civil protection officers, officials of the national federation of firefighters as well as instructors. Labor Code, 2006 (last amended 2021), L. 234.22 – 234.28.
Employees with at least 1 year of service with the employer shall be entitled to development cooperation leave for the purpose of participating in programs and projects for the benefit of the populations of developing countries, both within the country and abroad.
The duration of development cooperation leave cannot exceed 6 days per year and per beneficiary. This leave can be split as needed.
The duration of the development cooperation leave cannot be counted against the paid annual leave. The fixed or compensatory allowance is equal to the average daily wage, without the payable amount exceeding 400% of the minimum daily social wage for an unskilled employee of at least 18 years old. The employer shall pay the compensation to the employee which will be reimbursed by the State. Labor Code, 2006 (last amended 2021), L. 234.32 – 234.40.
Employees are entitled to cultural leave for participation in high-level cultural events or recognized events that are not part of the individual’s main professional activity, as well as offer the possibility of taking part in specialized training in the cultural field organized by an approved body.
Employees are required to be continuously affiliated with the social security system for a minimum of 6 months, have been employed with their employer for a minimum of 6 months, and have a commitment to the cultural and artistic scene in order to be entitled to the leave.
Eligible Employees – The following employees are considered to be eligible for the new leave
- “cultural actors” within the meaning of new Article L. 234-10 of the Labour Code.
- Employees with the status of administrative manager in a federation, national network, or association in the cultural sector.
- Employees appointed by national federations, networks, or associations in the cultural sector to participate in high-level cultural events.
Duration of Leave – The maximum duration of cultural leave varies according to the category of beneficiary:
- 12 days per year and per beneficiary for employees considered to be “cultural actors”.
- 2, 3, or 4 days per year for administrative staff of an association in the cultural sector, depending on the number of active affiliated members.
- 5 or 10 days per year for the administrative staff of a federation or a national network in the cultural sector, depending on the number of active members.
- 50 days per year for national federations and networks in the cultural sector and 10 days per year for associations in the cultural sector, which may then allocate those days to the persons whom they designate to participate in high-level cultural events in Luxembourg.
In all cases, the leave can be split and is prorated according to the employee’s working time.
Pay – For each day of leave, the employee shall receive a compensatory allowance equal to the average daily wage, but not exceeding four times the minimum social wage for unskilled workers (i.e. EUR 9,549.60 at index 877.01). The compensatory allowance is paid upfront by the employer and is reimbursed by the State.