Employment in Belgium: from A to Z
Employing staff in Belgium is accompanied by an extensive social legal framework. For foreign employers, it is essential to check in advance to what extent Belgian labour and/or social security law applies when employees are fully or partially active on Belgian territory.
Applicable labour law: free choice, but not without limits
In principle, the parties are free to determine the applicable labour law. This choice of law can be explicit or implicit in the implementation of the employment contract. In the absence of a choice of law, the labour law of the country in which the employee habitually carries out their work applies. Exceptionally, a different law may apply if it is apparent from the entirety of circumstances, that the employment contract is more closely connected with another country.
Even if employer and employee choose the applicable labour law themselves, that choice is not absolute. If, for example, the labour law of a country other than Belgium is chosen, employers must nevertheless take into account the more favourable provisions of mandatory Belgian labour law, as stipulated in Article 8 of the Rome I Regulation. As soon as an employee performs work on Belgian territory, Belgian labour law quickly takes on an important role, since almost all Belgian labour law is mandatory.
This is all the more true in the case of posting, where an employee works temporarily in Belgium but is usually active in one or more other countries, or has been employed in another country. In those cases, Belgian labour law applies from the first day of employment, at least those provisions that are subject to criminal sanctions or the collective labour agreements that have been declared universally applicable (i.e. almost all of Belgian labour law).
In addition to the ordinary rules of mandatory law, there are also provisions of overriding mandatory law, which are referred to in Article 9 of the Rome I Regulation. These rules protect essential Belgian interests – such as the social, political and economic organisation of the country – and apply regardless of the law that would normally apply to the employment contract. However, it is up to the Belgian court to determine which rules actually fall within the scope of this overriding mandatory law. Examples include the right to paid holidays, the ban on the provision of staff, etc.
Once the Belgian court has jurisdiction, it can therefore decide which overriding mandatory provisions apply, which sometimes makes the legal position complex and uncertain.
Joint committee and social documents
When Belgian labour law applies, the determination of the competent joint committee is the next crucial step. Within this sectoral consultative body, employers’ and employees’ organisations conclude collective labour agreements (CLAs) that lay down minimum wages, working hours, premiums and allowances, … . The applicable minimum wages per sector can be consulted via www.minimumlonen.be.
In addition, various social documents are also important. Although a written employment contract is not mandatory for a contract of indefinite duration and for full-time employment, this obligation does apply to fixed-term employment contracts, part-time employment and student work. Some provisions, such as a non-competition clause, must also be made in writing. In such cases, the agreement must be signed at the latest at the start of employment. Even if there is no obligation, a written agreement remains strongly recommended to ensure transparency about the terms of employment.
Another essential document is the work regulations. This mandatory document includes provisions on working hours, absences, illness and internal procedures. In principle, work regulations become mandatory when an employee is employed in Belgium for more than twelve months, but this obligation can also arise earlier, for example in the case of deviating work regimes such as night or shift work.
Social security and reporting obligations
Next, it must be checked whether the Belgian social security system applies. At the European level, this is regulated by Regulation 883/2004. In principle, the social security of the country of origin continues to apply in the case of posting. If an employee works and lives in the same country, the social security of that country applies. In the case of employment in several countries, the employee’s place of residence is important, as is the proportion of working time worked there or the income generated there. If at least 25% of the working time or income is performed or generated in the country of residence, the social security system of the country of residence applies.
Depending on the applicable system, different reporting obligations apply. For employees covered by Belgian social security, DIMONA notifications are mandatory at the start of employment and termination of employment. Employees who are not socially insured in Belgium are subject to the LIMOSA reporting obligation.
In addition, there are additional obligations in certain sectors, such as construction, cleaning, meat processing or security services. For example, a declaration of works and an attendance registration on site may be mandatory. Given the size and complexity of these additional obligations, we will limit ourselves to mentioning them in this article.
Labour migration and right of residence
Employees with a nationality from outside the European Economic Area (EEA) are only allowed to work in Belgium if they have the required work and residence permits. It is important to underline that a valid residence or work situation in one EEA Member State does not automatically confer the right to work in Belgium as a non-EEA national.
When an employer established in the EEA (or Switzerland) temporarily posts third-country nationals to Belgium, this can be done under certain conditions without having to apply for a Belgian work permit. This possibility arises from the so-called Vander Elst exemption. However, the exemption does not relieve the employer of all formalities. For example, the posted worker must register with the municipality of residence within three working days of arrival in Belgium via a declaration of arrival.
If the stay in Belgium is more than 90 days, registration in the register of foreigners is also required. Depending on the municipality, various documents must be submitted, such as the employment contract, possibly the service agreement and an A1 certificate. In practice, this registration procedure can take several months, partly due to the waiting times at the Immigration Office. If, upon arrival in Belgium, it is known that the stay will cover more than 90 days, it is best to apply for registration in the register of foreigners at the same time as the declaration of arrival, although this does not guarantee that the ‘long stay’ will be approved before the expiry of the 90-day period.
If the Vander Elst exemption cannot be invoked, a single permit must be applied for. This combined work and residence permit allows the employee to stay and work in Belgium for more than 90 days. However, this procedure is also associated with considerable waiting times – up to six months on average – and is subject to strict conditions.
Additional obligations
When Belgian social security applies, employers who owe Belgian social security contributions are obliged to register with the National Social Security Office (NSSO). In addition, they must take out occupational accident insurance and join an External Service for Prevention and Protection at Work (EDPPW). This external service supports companies in ensuring the health, safety and well-being of their employees.
Taxation
An employee becomes taxable in Belgium as soon as they are either a tax resident in Belgium, or, if they are not a tax resident in Belgium, but work in circumstances that lead to Belgian taxability according to national tax law. In practice, there are three main circumstances in which Belgian taxability arises: (1) when the employee stays or works in Belgium for more than 183 days in a period of twelve months; (2) when the employee works in Belgium for a Belgian (material) employer, or (3) when the employee works at a fixed establishment in Belgium for an employer. In situations (2) and (3), Belgian performance automatically becomes taxable from day one, regardless of the number of days worked.
In addition, the double taxation treaties between Belgium and the country of residence or work play a crucial role. These treaties determine whether Belgium as a state of employment is entitled to tax, for example when working on Belgian soil or when the material employership is located in Belgium. This framework ensures that employees who operate cross-border are treated correctly both fiscally and administratively. The correct and timely submission of a tax return in Belgium is the individual responsibility of the employee.
On the part of the employer, the employment of staff in Belgium may be accompanied by the obligation to deduct Belgian withholding tax from the employee’s salary and to pay it to the Belgian tax authorities. Belgian withholding tax is due when remuneration is paid/granted by a Belgian company or by a foreign company with a Belgian establishment, provided that the work is carried out for this Belgian establishment.
In addition, if an employee receives compensation from an affiliated company for work that they perform for the benefit of another (beneficiary) affiliated company, withholding tax will be payable in Belgium by the beneficiary company when this company is a Belgian company, or is a foreign company with a Belgian establishment (and the work is actually performed for that Belgian (or Belgium-established) establishment).
Conclusion
Employing staff in Belgium requires a thorough knowledge of labour law, social and tax regulations, as well as meticulous administrative follow-up. For foreign companies, professional and timely advice is therefore indispensable to act in accordance with Belgian regulations and to avoid unpleasant surprises. Van Havermaet is happy to support companies in this complex matter.