The Minister of Finance Gilles Roth listened to the speeches of the LCGB and OGBL on Friday morning / © RTL
On Friday morning, a protest took place in front of the ministry of finance, aiming to stand up against the 'fiscal discrimination' that over 200,000 cross-border workers in Luxembourg are affected by.
The Luxembourg Confederation of Christian Trade Unions, LCGB, emphasised that cross border workers not only have to endure considerable traffic jams every day, but they are also harassed by administrative procedures, including fiscal discrimination.
The trade unions call for identical regulations to be instated in the Greater Region, when it comes to the taxation of longer work days, on-call duties and remote work. Furthermore, they also demand the border controls to stop. All of these issues can be traced back to a bilateral agreement between Luxembourg and the neighbouring countries.
The source of the disadvantages
European Union laws foresee that cross-border workers need to pay taxes for the country they work in, yet their unemployment benefits are paid by the country they live in. Those benefits are calculated upon the worker’s salary, which is often higher in Luxembourg or Switzerland than in France.
EU regulations have set out to create a financial balance, consisting of a compensation paid during three to five months, dependent on the duration of unemployment. Nevertheless, the given compensation is not enough to cover all costs in France.
The above-mentioned regulation culminates to an expense of €800million a year for France. The French government has thus appealed to social partners, requesting for cuts to be made in border workers’ unemployment benefits. Swiss border workers are the most costly for the country, with Luxembourgers coming to about 22%.
A possible solution
During the negotiations between business owners and trade unions, which were concluded on 14 November, it was agreed to introduce a “reduction coefficient” into the benefits calculation, to balance out the differences in the cost of living between France and the country where the work takes place.
In short, it means that the cross-border worker will receive the French average salary instead of the average income of the working country. This new regulation could be valid from 1 April 2025 onwards.
The trade unions OGBL, the Independent Luxembourg Trade Union Confederation, and LCGB underline that Luxembourg also has a role to fulfil, and thus the country should participate in the compensation discussions. The Grand Duchy might risk losing popularity in the competitive field. As of right now, 47% of people working in Luxembourg come from the Greater Region.
According to the General Confederation of Labour, or CGT, Luxembourgish cross-border workers risk losing 32% of their unemployment benefits, with Swiss workers facing up to 45%.
On the whole, French border workers make up about 0.3% of the unemployment benefit in France. The French government now intends to save €2,6 million in the following four years, and €1,48 million are supposed to be paid by border workers.
