It was one of the most anticipated announcements of March: the planned rise in the social minimum wage. After lengthy discussions and deep disagreements between trade unions and employers, the government has decided to raise the lowest wages.
Although Luxembourg already offers the highest minimum wage in Europe (€2,703 gross per month), it does not comply with the latest European directive on minimum wages. This directive states that minimum income for full-time work should not be calculated in absolute terms (euros per month), but rather based on a reference point.
After considering several options, the government chose to measure it against the median wage, the median wage, which divides workers into two equal groups: one earning more, the other less. For the Ministry of Labour, which is overseeing the matter, this is considered the most relevant indicator.
To ensure that the social minimum wage reaches at least 60% of the median wage, an increase is deemed necessary. In this context, the government consulted the social partners, whose calculations differ significantly.
Trade unions were expecting an increase of nearly €300 gross per month, while employers were hoping for a freeze.
After several rounds of talks, the Minister of Labour Marc Spautz opted for a compromise: the minimum wage will increase, but not to the extent some had expected.
Currently set at €2,703 gross per month for unskilled workers and €3,244 for skilled workers, the social minimum wage will be revised in two stages.
In the second quarter of 2026, an indexation adjustment will first lead to a 2.5% increase across all wages, civil service salaries, and pensions. This increase is not specific to the minimum wage and had already been scheduled.
Expected before the summer, on a date yet to be confirmed, this indexation will raise the unskilled minimum wage to around €2,771 per month, and the skilled minimum wage to around €3,325 per month.
A further adjustment will take place on 1 January 2027, when the minimum wage alone will be increased by 3.8%. This will bring it to €2,876 per month for unskilled workers and €3,451 for skilled workers.
Overall, combining both increases, an unskilled worker will earn €170 more per month, and €207 more if they are classified as skilled.
Among the social partners, the reaction has been largely critical. Trade unions argue that the government used a less favourable method to comply with the European directive, relying on Eurostat figures rather than those from the National Institute of Statistics and Economic Studies (STATEC) and excluding bonuses.
The alliance between the Independent Luxembourg Trade Union Confederation (OGBL) and the Luxembourg Confederation of Christian Trade Unions (LCGB) had expected an increase of close to €300, but the final figure is €170, which they see as a blow to social dialogue.
Employers are also dissatisfied. The Union of Luxembourg Enterprises (UEL) had argued for a freeze on the minimum wage and the removal of the January increase, which is normally triggered by a biannual review mechanism in Luxembourg.
The Federation of Craftspeople went further, calling for the abolition of the skilled minimum wage altogether. This proposal was rejected by the government, which now faces opposition from both sides, with trade unions expected to respond during Labour Day speeches on 1 May.
