Luxembourg

Companies of the financial sector are obliged to contribute a fixed share of payroll costs (1.5%) to a training fund which, in return, provides funding for training employees of the financial sector for the banking environment in Luxembourg and the various trades that the industry offers. Eligible types of training include areas such as insurance banking, business management, law, fiscal law, economy, financial management, pedagogy. Fees and other costs related to training (such as costs of materials) are considered eligible costs to be funded. No preferential treatment for a particular group of beneficiaries is applied.

Based on a collective agreement, employers of the construction sector contribute to a training fund and receive subsidies for their training costs from the fund. EU-funds support the training fund (50% of the fund's budget, approx. EUR 3 000 000). The remaining EUR 3 000 000 are raised through the levy on companies in the sector (0.65% of the payroll). Professional education and training, research, and development in the building sector are considered eligible types of training. No preferential treatment for particular eligible groups is applied.

Employers can receive public contributions to the incurred eligible training costs. Companies receive 15% of the eligible training costs of a year (for wage costs of low qualified young adults and for employees 45+, they can receive a contribution of 20%). Upper ceilings for the public contributions per company apply, (20% of total payroll for companies with 1 to 9 employees; 3% for companies with 10 to 249 employees; 2% for companies with more than 249 employees). Continuous education and training are considered as an eligible type of training to be funded. At least 50% of training time should be scheduled within normal working hours. Eligible training also includes external and internal training, firm/sector-specific and transferable, workplace adaptation training, on-the-job training, self-learning, and e-learning, conferences, fairs, and exhibitions. Training is not cumulable with training provided under the 'individual training leave' scheme. The same applicant can use the scheme once in each calendar year.

Workers may take a training leave of a maximum of 20 days within 2 years (80 days over the entire employment career). The training programme does not necessarily have to be directly related to the individual's occupation. The leave made available corresponds to 1/3 of the number of the course hours taken (e.g. one day for a 24 hours course). The State provides individuals with a wage compensation for each day of which is equal to the beneficiary's average daily wage. This also applies to self-employed workers. The wage replacement is capped by the equivalent of four times the daily minimum wage.

Workers may take a language training leave with a maximum of 200 hours over their entire professional career. Any Luxembourgish language courses which are taught either in Luxembourg or abroad are eligible. The Ministry of Labour and Employment reimburses 50% of the training costs to the employer based on the daily wage of the worker (wage compensation). Salaried workers benefiting from the language leave are entitled, for each hour on leave, to a compensatory allowance that is equal to the average hourly wage. The eligile duration of the training leave is 10-25 working days.

Employers and employees can agree on a payback clause for training-related costs. The law establishes minimum standards that should be considered for the design of agreements between social partners or within companies. Conditions on payback clauses established in the Labour Code can be amended or replaced by collective agreements at the sectoral or company level provided that such conditions are less strict than the national regulations. Employees can be requested to reimburse the cost of employer-financed training incurred in the last 3 years if the employment contract is terminated on the initiative of the employee or by the employer due to a serious instance of employee misconduct. The employee cannot be obliged to reimburse training that benefits the company only (compulsory or firm-specific training).

Based on a collective agreement, temporary work agencies contribute a fixed share of payroll (0.6%) to a training fund. In return, the temporary work agencies receive funding for implementing sectoral training programmes. The maximum amount that a temporary work agency may receive is up to the amount of the entity's contribution to the training fund reduced by the operational cost of the fund. No preferential treatment for a particular eligible group is applied. For temporary workers, the main focus of training is on health and safety and employability. For permanent employees, the main focus is on induction training and continuing training.

For adults (irrespective of age) in secondary and HE, a grant for meeting the living costs during higher education is available in case their gainful income is below the minimum wage. For anyone else, a loan scheme is available. The grant consists of a basic grant of EUR 1 050 per semester and a 50% contribution to HE fees capped at EUR 3 700. Further 50% are available as a loan. The grant can be also expanded with the help of the loan for meeting tuition costs. The state provides a guarantee for the loans. The level of support provided is subject to regular adjustments.

Any person taxed on his/her income that he/she receives from paid work may deduct professional development expenses from his/her taxable income. The state co-funding - in the form of foregone tax revenues - equals the eligible costs multiplied by the marginal tax rate (between 8% and 42 % plus a 7-9% contribution to the Employment fund). The minimum earning per year required to apply for the scheme is EUR 11 265. The professional development costs must have a direct link to the professional activity performed by the employee, be paid for by the employee, and should enable the employee to update his/her professional skills and to progress in his/her professional activity. Professional training costs which cover expenses incurred in order to gain the knowledge required for a future profession or a change of profession, are non-deductible. Eligible expenses include registration fees for continuing training borne by the employee, the costs of buying books, insofar as they are purchased on a wholly professional basis (specialist books that are not of general interest). The location in which the training is held is not taken into consideration. The net effect of the deduction of training costs depends on the level of income and the type of taxpayer. The same applicant can use the scheme once in each calendar year.

Employees with two or more years of tenure (irrespective of the type of employment contract) can formally request an unpaid leave for participating in formal education or CVET programmes from their employer. The duration of the unpaid leave needs to be longer than four consecutive weeks and can last for up to six consecutive months. The required period of notice is two months for leaves up to three months and four months for leaves longer than three months. Over the employment history with one employer, unpaid leave is available for a total of up to two years. Employers cannot deny unpaid leave but can postpone it for up to two years due to important organisational reasons. For employees in micro enterprises and for members of the top management, employers may refuse to grant the unpaid leave.