Luxembourg: Government Increases Immigration Compliance Obligations, Toughens Sanctions
Employers are subject to new employment eligibility verification, document retention, and government notification requirements. Foreign nationals are subject to higher potential sanctions for working without authorization.
Employers are now explicitly prohibited from employing third-country nationals who are residing in Luxembourg without the appropriate authorization and are subject to new employment eligibility verification obligations, under legislation that implements a European Union directive. Foreign nationals are subject to higher sanctions for working without authorization under the legislation, which took effect in January.
New Employer Responsibilities and Potential Sanctions
Employers are now explicitly prohibited from employing third-country nationals who are residing in Luxembourg without the appropriate authorization.
Employers are required to verify that each foreign employee has temporary work authorization or a residence permit authorizing work before the employment start date. The employer must maintain a copy of the employee’s work authorization documentation for the duration of employment, and notify the labor ministry of the employee’s start date within three business days of the first working day. Employers must also ensure their subcontractors comply with these requirements if they employ third-country nationals.
Companies that employ third-country nationals without work authorization are subject to a range of new and increased sanctions, including administrative fines of EUR 2,500 per unlawful worker and payment of repatriation costs, back pay, taxes and social security. Repeated or egregious violations may lead to criminal penalties, including significant fines, imprisonment, or a curtailment of the employer’s ability to conduct business.
Complying with the employment eligibility verification and document retention requirements give employers a safe harbor from sanctions for noncompliance unless they knowingly accept false documents.
Increased Individual Penalties for Unauthorized Work
Foreign nationals are now subject to fines ranging from EUR 251 to EUR 5,000 for working or engaging in self-employment without the appropriate authorization or for failing to make all tax and social security payments. Repeat violations are subject to imprisonment of eight days to six months and fines up to EUR 10,000.
What the New Sanctions Means for Employers
Employers should review their internal policies to ensure they comply with Luxembourg’s new sanctions regime, including mechanisms to make copies of all necessary documents and to file required notifications with the government. Those who work regularly with subcontractors will also want to request their subcontractors provide them with proof of compliance.