When jobhunting in Luxembourg, applicants will seldom find salary brackets indicated in job postings. This phenomenon isn’t local. Globally, only around one in five companies post pay ranges in their ads, a study by US data company Payscale shows.
“So much depends on the person that is hired,” said Laurent Peusch of Luxembourg employment agency Adem. “It’s not an exact science.” Salary negotiations will depend on a candidate’s experience, which could result in possibly wide margins.
Talks can also include housing or education packages, access to a company car and more elements not covered in a simple salary bracket, Peusch said.
Many people coming in to Luxembourg get underpaid at first
“If you give the exact range to candidates, the candidates will then expect the top of that range, even if they are more junior candidates,” said Kieron O’Connor of KR Recruitment. The company does not include salary ranges in its job ads. “We are trying to get the balance between the candidates’ expectations […] and what the role will pay.”
But for expats moving to Luxembourg from abroad, this lack of salary information could prove problematic, O’Connor acknowledged.
“Many people coming in to Luxembourg get underpaid at first, in a high percentage of cases,” said O’Connor. “Candidates tend to catch up within a year or two on the salary difference, as they realise they are not paid market value.” People either demand a raise or find a new job, he said.
Recruiters such as Hays and platforms like Les Frontaliers have compiled information on Luxembourg salaries for different sectors and levels of seniority. Statec meanwhile provides information on consumer prices and several websites offer tax calculators to get a better idea of gross versus net wages.
Salary dissatisfaction
Still, jobs platform jobs.lu in March said that two thirds of employees in Luxembourg are unhappy with their salary, with one in two thinking they earn less than the market average. The results were based on a survey of 1,241 employees in the country.
“Many companies do not have a clear and coherent pay policy,” said Arthur Meulman, CEO of jobs.lu, in a statement. “Good communication about salary issues remains a problem area. In a tight labour market, ensuring team satisfaction is essential: this includes fair pay.”
Jobseekers registered with Adem can count on the support of the agency to get an idea of the salary they can expect. The centre is open not only for those who are unemployed but also people looking for a new job.
For some coming from abroad, accepting a lower salary can help secure a first job in the grand duchy, O’Connor said, especially when it helps bridge a skills gap between staff with local knowledge and an external hire who will need to learn about the specificities of a role in Luxembourg.
For third country nationals, immigration requirements for Luxembourg foresee a salary at least equivalent to 1.5 times the amount of the Luxembourg average gross annual salary (€83,628) or at least equivalent to 1.2 times the Luxembourg average gross annual salary (€66,902.40) if the job is in a priority sector. These include primarily mathematicians, statisticians and ICT roles.
Wage transparency
“We think it’s very important that there is a certain transparency in terms of criteria that the employer uses,” said Martine Mirkes, a legal adviser at the Chamber of Employees. All private sector employees are member of the chamber, which represents the interests of around 530,000 workers in the country.
The chamber has demanded a law on wage transparency. While this wouldn’t force companies to disclose salary brackets in job adverts, they would have to make available details on how wages are structured and allocated, “what the criteria used to classify staff in different jobs are.”
This is personal information that belongs to the employee, and they must have the right to talk about it
The public sector and companies subject to a collective work agreement already provide pay scales, but this should apply across the private sector, Mirkes said, adding that this would give candidates the opportunity to prepare for salary negotiations.
Companies systematically hiring from abroad to cut costs are discriminatory, the legal adviser said.
Complicating things further, many job contracts in Luxembourg include clauses forbidding employees from discussing their salaries. “For us they are null and void,” Mirkes said of these passages. “This is personal information that belongs to the employee, and they must have the right to talk about it.”
The CSL is aware of the clauses being included in contracts but said they most likely wouldn’t hold up in court in case of a legal challenge. A court in Germany in 2009 ruled that salary information is not a trade secret, saying that discussing wages isn’t a punishable offence. The chamber was not aware of any such decision in Luxembourg.