The use of freelance contractors is not subject to the same requirements as the hiring of full-time employees and plenty of start-ups and other small businesses draw on a trusted pool of temporary or occasional staff while they get established. As long as these individuals are deemed to be self-employed, they are not subject to the Labour Code, although they are covered by the general provisions of the Civil Code and the Commercial Code, which requires companies to provide a safe working environment and stipulates other protection for people who work for them, whatever their employment status.
The downside of using freelancers or temporary staff is that they may not feel the same commitment to the business as do full-time employees. Parts of the workforce that are less in demand from mainstream recruiters can be an option, since the government provides incentives to companies to hire older and disabled people, as well as to recruit young people (under 30) and apprentices.
The benefits can be substantial, reaching 40% of the individual’s salary or even more, according to state employment agency Administration de l’Emploi. This can be an option for a small business looking to keep costs lower as it gets established, and can also provide them with older employees’ greater experience. In the longer term, they may be in a position to increase salaries for younger people as the business expands.
In a country like Luxembourg, where salaries are mostly higher than elsewhere and additional employment charges increase the cost, taking on staff is a decision that small businesses do not take lightly.
However, the cost may be worth it, given the deep pool of skilled resources in the country or just across its borders – and whose skills and input can help small businesses grow larger.