28/09/23

Hiring third-country nationals in Luxembourg: the new law of 7 August 2023 in a nutshell

If you are a Luxembourg employer wishing to hire a third-country national – i.e. a person who is not a citizen of the European Union or who is not entitled to the European Union's freedom of movement (hereinafter a “TCN”) – as a salaried worker, then you should be aware of changes brought by the law of 7 August 2023 amending the law of 29 August 2008 on the free movement of persons and immigration (the “Law of 7 August 2023”).

Indeed, since its entry into force on 1 September 2023, employers of TNCs will have to consider new elements, including the following: 

Confirmation of the scope of sanctions for employers employing TCN in an irregular situation

Before 1 September 2023 

  • The Labour Code only expressly prohibited the employment of TCNs in illegal stay in Luxembourg (i.e. residing in Luxembourg without fulfilling the legal conditions of residence).
  • The wording did not expressly target TCNs in a legal residence situation (in Luxembourg or in a bordering country) but without a valid work authorization from Luxembourg authorities. | 

As of the 1 September 2023

  • The Labour Code now prohibits the employment of TCNs in an irregular situation in Luxembourg. This expressly extends the scope of sanctions to TCNs in a legal residence situation (in Luxembourg or in a bordering country) but without a valid work authorization from Luxembourg authorities.

Intensification of the applicable sanctions

Before 1 September 2023 

  • Any employer who employed one or more TCNs in illegal stay in Luxembourg was liable to a fine of 2,500euros per TCN in illegal stay.
  • In case of aggravating circumstances, the employer could be sentenced to imprisonment from 8 days to 1 year and/or to a fine ranging from 2,501 to 20,000euros per TCN in illegal stay. 

As of the 1 September 2023

  • Stricter applicable sanctions.
  • Any employer hiring one or more TCNs in illegal stay/an irregular situation in Luxembourg is liable to a fine of 10,000 euros per TCN in illegal stay/an irregular situation.
  • In case of aggravating circumstances, the maximum amount of the applicable fine is now raised to 125,000 euros per TCN in illegal stay/an irregular situation.

Extension of the right to work in Luxembourg for TCNs who are family members of TCNs

Before 1 September 2023 

  • No direct access for TCNs holding a residence authorization/permit as “family member” of a TCN to Luxembourg labour market which remained subject to prior authorization.

 As of the 1 September 2023

  • Direct access for TCNs holding a residence authorization/permit as “family member” of a TCN to Luxembourg labour market (salaried or self-employed activity).

Extension of the exception provided for the provision of services

Before 1 September 2023 

  • Exception for TCNs who stayed in Luxembourg for the provision of services to obtain a residence authorization/permit subject to the condition that said provision of services (i) lasts less than 3 months per calendar year (ii) occurs in an intra-group context and (iii) is not made within a subcontracting framework. 

As of the 1 September 2023

  • This exception has been relaxed, and now also applies to TCNs who stay in Luxembourg for a provision of services occurring outside of an intra-group context (provided that the other applicable conditions are fulfilled).

Change regarding the procedure for obtaining the certificate from the Luxembourg Employment Agency (“Agence pour le développement de l'emploi”, “Adem”) authorizing the employer to recruit the person of its choice

Before 1 September 2023 

  • Procedure for obtaining the Adem certificate authorizing the employer to recruit the person of its choice systematically took about a month. 

As of the 1 September 2023

  • Completely revised process for obtaining the Adem certificate.
  • The duration of the process can now range from 5 working days (if the vacancy is on the list of occupations declared to be in serious shortage) to 34 working days (or less) depending on the profiles of job seekers available for the concerned position.

Enhanced information exchanges among authorities

Before 1 September 2023 

  •  No legal provision existed for data exchanges between the Labour Inspectorate (“Inspection du travail et des mines” – “ITM”), the Customs and Excise Administration (“Administration des douanes et accises” – “ADA”), the Department for Foreigners of the Ministry of Foreign and European Affairs (“Ministry”) and the Social security authority (“Centre commun de la sécurité sociale”, “CCSS”). 

As of the 1 September 2023

  • In order to enable the authorities to carry out their missions related to the control and sanction of the employment of TNCs in illegal stay/an irregular situation, data exchanges are now legally planned.
  • These data exchanges involve (i) on the one hand, the ITM, the ADA and the Ministry, and (ii) on the other hand, the ITM and the CCSS.

New travel authorization requirements for TCNs exempted from visa obligations

Before 1 September 2023 

  • TCNs exempted from visa requirements only needed their (valid) passport and their residence authorization to travel to Luxembourg in order to finalize their immigration procedure.

As of the 1 September 2023

  • In order to take into account the requirements of the European regulation establishing the "European Travel Information and Authorisation System" (known as “ETIAS”), which is expected to be operational by 2024, TCNs exempted from visa requirement will have to hold a travel authorization as provided for by the ETIAS system once it is effectively implemented.

The Law of 7 August 2023 aims to modernize the legal framework applicable to TCNs by introducing innovations to increase the attractiveness of Luxembourg employers on the international market, including in particular: (i) the creation of a list of occupations declared in serious shortage, which makes it possible to obtain the Adem certificate much faster for the concerned occupations and thus considerably accelerates the immigration process for the "salaried worker" category; and (ii) the implementation of a direct access to the labor market for TCNs holding a residence authorization/permit as “family member” of a TCN. Despite these positive aspects, in light of the new provisions foreseeing enhanced exchanges of information between the authorities, employers are advised to pay attention to the specificities linked to the rules - sometimes complex - applicable to the different categories of TCNs, to avoid finding themselves in situations of breach.

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