Luxembourg is known for its strong social protections, and sick leave is a building block of employee rights. While this system safeguards workers, for small business owners it can sometimes feel overwhelming. For companies with only a handful of employees, the legal, and financial obligations associated with sick leave can pose serious challenges.
In Luxembourg, sick leave is structured to balance the protection of employees with the responsibilities of employers. The Labour Code and Social Security Code define the rules for reporting illness, submitting medical certificates, and ensuring continuity of income, while practical guidance is available through the CNS sick leave rules and the Guichet.lu employer obligations.
While these rules provide clarity on paper, small business owners often face unique challenges navigating the system, as Patrick, the owner and operator of a small media and design company, explains in his firsthand account of the impact of sick leave on micro-businesses.
Patrick’s story highlights the tension between protecting employees and sustaining small businesses. Patrick has requested that his identity remain anonymous as he does not wish to call his employees, and the system out. Patrick believes the current sick leave model works better for large, established companies than for startups or micro-businesses.
“What I want to say is that there needs to be two speeds in the country. There needs to be one speed for small startups, and then there needs to be a big established business. And that would be both for the paperwork, taxes, and the contributions. They’re so heavy, they’re so onerous”, said Patrick.
For Patrick, the combination of social charges, salary obligations, and administrative requirements can be overwhelming for a company with only a few employees.
With only three employees, in his small company, any prolonged absence can have a major impact.
“A small business like mine, that only has like three employees, can suddenly have someone go on medical leave. Any doctor here will just tell you, ‘Yeah, you’re sick, you should go on medical leave.’ And if it’s the right, to be legally protected, I understand that people cannot burn out. But in a lot of cases, what it is is somebody has a depressive episode, or they’re not happy, or they’re lacking vitamin D. And then I have to carry the cost, salary, social charges, everything, for three months”, said Patrick.
Sometimes, while employees may have legitimate health concerns, the financial strain on small employers is significant. “So the business falls. Not only do I have to continue paying their social charges, their taxes, and their salary, it’s too onerous on a small employer to carry, I cannot stress this enough. Seventy-seven days is too long for someone to be able to go on medical leave”, said Patrick.
Patrick is not arguing against employee protections, rather, he suggests a system that differentiates between company size and shares the financial responsibility more fairly. “If the state has decided to make an ecosystem where it’s so easy to go on medical leave, then the state should have to bear the costs. There should be a two-speed option: if you’re a small company under a certain size, the state should carry those costs, not the employer. Because otherwise, it’s too heavy for a small business”, said Patrick.
He also proposes stricter oversight over medical leave approvals: “If they want a system that’s generous with sick leave, then it should be approved by ex-monitor doctors, just like subsidies are approved by state-authorized companies. Not just any practitioner should be able to sign someone off for three months of leave”, said Patrick.
“I have one very important employee right now who I spent nine months training. Just as he’s getting really good, he decides to go on medical leave, and says, ‘Don’t worry, this medical leave has been authorized by my doctor.’ Well, I’ve had numerous doctors say to me, ‘You’re burned out. Do I go to work? Yes’”, said Patrick.
Patrick underscores the difficulty of balancing employee health with business survival. “There’s not much that can be done. I just try to manage. It’s unfair, because it ends up costing my small business more money. I just think it’s too much”, said Patrick.
Patrick acknowledges that many employees’ health concerns are real, but points out the gray areas. “People might legitimately be depressed, unhappy, or low in vitamin D. I don’t deny that somebody feels bad. But I would argue that if you want a proper Luxembourg salary and a stable economic environment, you have to put up with certain realities, like gray skies, and find a way to work around that”, said Patrick.
Patrick contrasts his company’s environment with larger corporations, noting that burnout is often less extreme in small businesses that follow legal working hours.
“Most of my employees work 36 or 37 hours a week, not 70 or 80. So what we see is usually someone who can’t manage stress well, or is experiencing depression. And while that is legitimate, the impact on a small business is huge”, said Patrick.
Many small business owners as well as Patrick stress that the goal is not to reduce employee protections, but to make the system sustainable for small businesses. “If the state wants to make a system that’s generous, that’s great. Seventy-seven days of salary and social contributions for a micro-business can be devastating”, said Patrick.
Clearer rules, stricter medical oversight, and financial support from the state could alleviate this tension. “Then you’d have to have medical leave approved by authorized doctors. The state should step in for extended periods. But as it stands, any employee can say, ‘I’m going off work for three months,’ and the business carries the cost. That’s just too much for a small company like money. I already have enough problems as it is with competition as a small business”, said Patrick.
Patrick’s experience illustrates a broader debate in Luxembourg: how to balance strong employee protections with the sustainability of small businesses. While the legal framework ensures that workers can take leave for legitimate health concerns, small companies often feel disproportionately burdened by the current system.
“The system should work for both employees and employers. If you want a generous sick-leave ecosystem, then the state has to share responsibility, especially for small businesses. Otherwise, it’s simply not sustainable”, said Patrick.
Patrick’s testimonial provides a unique perspective from the front lines of Luxembourg’s small-business sector, a reminder that policies, no matter how well-intentioned, must consider both the people who benefit directly and the organizations that sustain them.
