Luxembourg's Ministry of Labour, Employment and the Social and Solidarity Economy has announced the introduction of a compensation mechanism for the partial unemployment measure.

The Economic Committee, chaired by the Minister of Labour, Employment and the Social and Solidarity Economy, Dan Kersch, and the Minister of the Economy, Franz Fayot, reached an agreement on Wednesday on the treatment of partial unemployment statements for the months of July to December 2020.

The introduction of this compensation mechanism aims to address the concerns of various stakeholders and simplify administrative procedures. The mechanism applies to negative balances resulting from accounts for the months of March to June 2020, during which time the partial unemployment scheme for cases of force majeure linked to the COVID-19 pandemic was put in place. During this period, companies received an advance as soon as their request was validated. After the end of the month in which partial unemployment occurred, the ADEM employment agency sent the companies statement on the basis of their declarations.

The adjustment of the statement provides that the employer receives a detailed statement for each month concerned, both for a possible outstanding balance (i.e. positive balance) and for the amount of an overpayment (ie negative balance).

The ADEM has just finished processing and sending these statements. In this context, three scenarios are possible:

- in the event that the partial unemployment statements for the months of March to June 2020 showed a positive balance, ADEM transfers the remaining balance to the company concerned;
- in the event that the statements for these months show a negative balance and the company concerned has not yet proceeded with the reimbursement, this overpayment will be compensated, up to the maximum of the respective quota, with the partial unemployment benefits due for the month of July 2020 (and, where applicable, the subsequent months), provided that the granting of partial unemployment has been granted by the Economic Committee for the month of July (and, if applicable, subsequent months). This compensation mechanism will be put in place from mid-October 2020;
- companies that have not submitted a request for partial unemployment for the month of July and / or subsequent months will have to reimburse the overpayment of the advances for the months of March to June 2020 within 30 days on the bank account of the State Treasury, indicating the reference number of the file.