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

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

– 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.

– 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

– 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.

– 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

– 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.

– 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

– 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.

– 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

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

– 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

– 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”).

– 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

– 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.

– 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.