1. Minimum social wage: is the ‘S’ in ‘social’ superfluous?
The minimum living wage caught between economic and social considerations. The surprise announcement of an increase in the national minimum wage from 1 January 2027 leaves the political question of the appropriate level of this wage unresolved. On this subject, the coalition agreement stated that ‘the regular adjustment of the national minimum wage in line with wage trends and the cost of living will be maintained.’ A desire to maintain the existing status quo – a biennial increase and possible index-linked increments – has been undermined by the government’s obligation to transpose Directive 2022/2041. This directive stipulates that the social minimum wage must be ‘adequate’ and suggests two alternative calculation benchmarks to ensure this: 50% of the average wage or 60% of the median wage.
Faced with this obstacle, the government opted for 60% of the median wage, excluding allowances, bonuses and one-off payments. This deduction has been criticised by trade unions, who are calling for a substantial and structural pay rise. To mitigate their disappointment, the government announced a €170 increase in the SSM. This is a hybrid increase, as of the €170, €105 will strictly speaking come from the January adjustment and €65 from the indexation scheduled for the second quarter of 2026. This amounts to a 3.8% increase. A measure that has displeased both the trade unions, who wanted a structural pay rise of 11%, and businesses, who did not want to hear of any increase in the minimum wage.
To meet these demands, part of the 3.8% increase will be subsidised by the State, amounting to 1.3% with a maximum budget of €50 million. The details of this compensation scheme are still to be negotiated with the UEL, which argues that the minimum social wage should first be calculated on the basis of economic constraints rather than social constraints, the latter being borne by the budget. This would effectively remove the word ‘social’ from the term ‘minimum social wage’. There is, however, one caveat: taxes must not be increased.
€2.875
This will be the amount of the minimum social wage as of 1 January 2027. It currently stands at €2,703.75. Following the indexation expected in the second quarter of 2026, it will rise to €2,771.35.
Changes in the minimum wage since 2013. (Source: Statec)
2. Can pay transparency lead to genuine pay equality?
Pay transparency is still a long way off. On the sensitive issue of pay transparency, the government’s draft bill is still awaited and will need to transpose Directive 2023/970. This text, adopted by the European Parliament and the Council on 10 May 2023, aims to strengthen the application of the principle of equal pay for men and women for work of equal value or of equal worth, through pay transparency and various enforcement mechanisms. It must be transposed by 7 June 2026 at the latest.
The directive will, first and foremost, include a strengthened right to information. An employee will be able to request a comparison of their pay level with the average pay of employees in equivalent roles. In the event of an unjustifiable pay gap, the company will be required to take action. Length of service, performance, actual responsibilities and the scarcity of certain profiles remain factors that may justify pay differences. However, whilst pay transparency places a responsibility on the employer and obliges them, where necessary, to adjust their remuneration policy, the text does not provide for any automatic pay rises, nor does it require the existence of a pay policy. Similarly, the confidentiality of individual pay remains the rule.
The first to be affected will be companies with more than 250 employees, which will be required to publish an annual report from 2027 onwards. Next will be organisations with between 150 and 249 employees, which will be required to publish a report every three years. Then, from 2031, organisations with between 100 and 149 employees. Companies with fewer than 100 employees will be exempt from reporting.
The question is whether employees will be able to benefit from these rights from 7 June. In theory, yes, but this will be subject to conditions and will be limited. We will have to wait and see.
-0,8%
Luxembourg has the lowest gender pay gap in the EU, with a negative gap of -0.8% in 2024, meaning that, on average, women earn 0.8% more per hour than men. However, disparities remain in terms of annual income, as women are more likely to work part-time and hold fewer management positions. In this regard, men earn on average 13.9% more.
To educate or to punish? That is the underlying question behind the ITM reform
The ITM reform: a balance between education and sanctions. The reform of the Inspectorate of Labour and Mines is on the government’s agenda. Following the last major reform in 2015, the government intends to redefine its remit in order to strengthen the focus on prevention and support for businesses. This is without undermining its powers in terms of inspection, monitoring and sanctions. For example, it is the ITM that monitors compliance with the minimum social wage. Compliance is by no means a given. Since 2020 — figures as of the first quarter of 2026 — 7,887 inspections relating to the minimum social wage have been carried out, resulting in the detection of 336 breaches. Of these, 149 were in the hospitality sector and 37 in the retail sector.
Announced by 
A reform that was due to be approved by the Council of Ministers by the end of 2025, but which has yet to materialise. Pending this comprehensive reform, the ITM has been responsible since 2025 for the health and safety of those involved in the activities of state and local government bodies. This expansion of its remit was achieved through the integration of the National Security Service in the Civil Service (SNSFP) into the ITM. The merger was implemented via the 2025 Budget Act in the name of administrative simplification.
1.402
This is the number of inspections carried out by the ITM in 2024. These inspections led to the identification of 5,338 breaches. 1,402 of these related to working hours and 1,155 to pay.
Trend in the number of inspections carried out by the Inspectorate of Labour and Mines (ITM), in thousands. (Source: ITM Annual Report 2023 and 2024)
4. How should platform work be regulated?
Platform work, or the temptation to crack down on bogus self-employment. This is another area where the government is expected to take action: the regulation of platform work. Platforms act as intermediaries, providing a technological infrastructure between clients and service providers. Service providers create a profile on the platform and agree to its terms and conditions. They are usually treated as self-employed contractors, and the matching process with clients is automated via algorithms.
In the coalition agreement, this issue is addressed through the lens of combating job insecurity. “The Government will equip itself with the means to combat job insecurity, and in particular the precarious conditions associated with platform work,” it states. The issue was settled at European level with the adoption on 23 October 2024 of Directive 2024/2831, which must be transposed by 2 December 2026. This deadline will be difficult to meet, as no draft legislation has yet been tabled in the Chamber of Deputies. In May 2025, the then Minister for Labour, Georges Mischo (CSV), had provided an update on the progress of the matter to the members of the Labour Committee. In his view, the draft bill needed to strike the “right balance” between “the protection of people working on platforms and Luxembourg’s competitiveness in the European market”. He did not provide further details.
The crux of the matter will be the issue of reclassifying workers’ status, against the backdrop of the crackdown on bogus self-employment. The directive requires appropriate and effective procedures to be in place to verify the employment status of people carrying out work via a platform. It also introduces a legal presumption of employment: it will be up to the platform to prove that the contractual relationship is not an employment relationship. Pending the government’s proposal, the OGBL-LCGB trade union confederation has presented its own. It emphasises the guarantee of adequate social protection
43
According to the European Commission, the number of platform workers in 2025 will be in the millions. This represents a significant increase compared to the 28.3 million workers recorded in 2022. Around 55% of these workers earn less than the net minimum hourly wage in the country where they work.
Some figures:
There has been a rise in job insecurity and non-standard forms of employment in the Grand Duchy, a situation often experienced by workers in the platform economy.
4,7%
The proportion of the population holding a second job in 2024. This trend is steadily increasing, with an average annual rise of 3.1% since 2010, and mainly affects low-skilled workers.
15,9%
The at-risk-of-poverty rate for non-salaried workers (the self-employed) in 2024, compared with 13.3% for employees.
9,5%
The proportion of resident employees in temporary employment in 2024 stands at 7.5%, compared with 7.5% in 2023, an upward trend unique within the eurozone. It is mainly young people aged 15 to 24 who are affected (41.8%).
34,8%
The proportion of employees who carry out at least half of their work in the evening. For night work, the figure is 15.6%. This is higher than in neighbouring countries (9–11%).
This article was written for the May 2026 issue of Paperjam magazine, published on 29 April. The content is produced exclusively for the magazine. It is published on the site to contribute to Paperjam’s comprehensive archive. Click on this link to subscribe to the magazine.
Is your company a member of Paperjam Club? You can request a subscription in your name. Let us know via club@paperjam.lu
