EMCC European Monitoring Centre on Change

Employment fund

Luxembourg
Phase: Management
Typ:
  • Response to COVID-19
  • Employment incentive
  • Income support for workers
Zuletzt geändert: 09 September, 2020
Ursprünglicher Name:

Fonds pour l’Emploi

Englischer Name:

Employment fund

Coverage/Eligibility

The Employment fund is a legal financial support instrument in the context of restructuring of companies, or within the field of activation policies.

Main characteristics

The Employment fund covers the reimbursement for employers of social contributions provided that they recruit older or long-term jobseekers registered at the National Employment Agency ADEM. The Employment fund also grants re-employment assistance for employees affected by dismissals for economic reasons, and pays wages to employees for a period of up to 6 months after the bankruptcy of a company.

The Employment fund is financed by a solidarity tax, which has been a 7% surcharge on personal income (9% if the personal income is over €150,000 per year) and 7% on corporation tax, a contribution from local authorities and an advance from the government funds. The solidarity tax has remained unaltered. 

In the context of the current COVID-19 crisis and legislation, the fund plays a crucial role in the context of short-time working schemes. If the company can mobilise short-time working, the fund can take charge of the 80% of the normal salary capped at 250% of the minimum social salary for an unskilled employee. The fund also compensates those employees whose salary risks to fall under the social minimum wage.  

Funding

  • National funds
  • Employees
  • Companies

Involved actors

National government
Ministry of Work and Employment
Andere
Fonds pour l'Emploi.

Effectiveness

According to the Annual report 2019 of the Ministry of Labour, Employment and the Social and Solidarity Economy, total expenditures by the Employment fund mobilised for the various initiatives amount to €795.5 million. In the context of the COVID-19 crisis, this amount is likely to increase as a series of COVID-19 measures are financed by the Fund. Data on total expenditure are yet not available. 

Strengths

The Employment fund is an efficient support instrument in the case of company restructuring and jobseeker activation policies, as it contributes to avoidmass redundancies. This is well reflected in the amound mobilised in 2019 for the various initiatives, as well in the current COVID-19 context, where part-time unemployment is financed through the Fund. 

Weaknesses

No information available.

Beispiele

No information available.
Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Neuen Kommentar schreiben