Fiduciary
THE CASUAL EMPLOYMENT CONTRACT
Companies established in Luxembourg may be required to casual temporary employment contracts. The casual contract is a variant of the fixed-term contract (CDD). A special feature of the casual employment contract is that it is concluded in the context of occasional work, i.e. work that is not likely to be repeated.
An example of occasional work that requires the conclusion of a casual contract: the taking of an inventory, the organisation of an exceptional event or the assembly of furniture.
The casual contract is a "more flexible" contract than the traditional fixed-term contract and was introduced to combat undeclared work.
Like any employment contract, the casual contract is characterised by a subordinate relationship, and the employee is subject to specific rules regarding working time, working hours and taxation.
The following are therefore considered to be casual employees.
- Employees who carry out a professional activity in an occasional and non-regular manner, insofar as the user undertaking is not in a position to respond to this by hiring permanent staff; - And who carry out an activity for a duration determined in advance and which does not exceed 3 months per year.
The temporary contract should not be confused with the seasonal contract, which is used for the performance of work repeated each year, renewed according to the seasons and whose variation is independent of the employer's will.
REMUNERATION AND TAXATION
Remuneration for casual employment is subject to withholding tax. In addition, each employee must have a tax withholding slip.
The employer must make a request to the Tax Administration indicating the name, registration number, contact details, and start and end date of the contract and salary.
The employer may apply a flat-rate withholding tax regime. This is possible provided that the flat-rate deduction is paid by the employer, that the period of employment does not exceed 18 days in a row and that the salary net of tax and social security contributions does not exceed €14 per hour worked.
SOCIAL SECURITY
The employer is obliged to conclude a written contract even if an employee is hired for only a few days.
Any employee who is employed on an casual and non-regular basis for less than three months a year is exempt from sickness and pension insurance. To do so, the employer must apply for an exemption on the employee's entry declaration form.
On the other hand, they are not exempt from workplace accident insurance.
Care should be taken not to confuse casual activity with the activity of a person who, for example, works every Saturday in a bar and whose total working time does not exceed 3 months a year. In this case, the person is engaged in a regular professional activity. The exemption therefore cannot apply.