Your Belgian payroll administration in Q1.2023
The end of 2022 was marked by quite a few social law novelties. Which of these will have an impact on your payroll administration, we have summarised for you below.
1. INDEXATIONS TO UNPRECEDENTED HEIGHTS
Belgium has automatic wage indexation. In several sectors, wages were indexed on 1 January 2023. Usually, it concerns an indexation of all actual wages, but in some sectors the indexation only concerns minimum wages.
Be sure to take this into account in your payroll administration and feel free to contact us if you have any questions about this.
2. KIND REQUEST: AMENDMENT OF WORK REGULATIONS
In the context of the many legislative changes, every company needs to amend its work regulations. In particular, we would like to point out two approaching deadlines: on the one hand, concerning the introduction of the right to disconnection (for employers with +20 employees – 1 April 2023) and, on the other hand, the introduction of a training plan (for employers +20 employees – before 31 March 2023).
3. INCREASE IN HOMEWORKING ALLOWANCE
To employees who engage in homeworking on a regular and structural basis (at least one day a week), the employer may grant a net fixed allowance for the costs associated with this homeworking.
This home working allowance will be increased to €148.73 per month from 1 January 2023.
Know that you must be able to justify the application of this fixed allowance. We therefore recommend drawing up a homeworking policy that defines homeworking with its concrete modalities, including the granting of the homeworking allowance. Of course, we can help you draw up this policy and write up homeworking policies.
We recommend either stating in the employment contract/policy that the amount of the home working allowance will always be increased automatically, in line with the NSSO’s administrative instructions, or stating that this will not be the case. This way, you avoid frequent adjustments and subsequent discussions.
4. AMENDED LEGISLATION AND INCREASE IN MILEAGE ALLOWANCE
New legislation on the mileage allowance for commuting and professional travel now provides for a quarterly review of the amount of the mileage allowance. For the period from 1 October 2022 to 31 December 2022, the allowance was €0.4201/km.
At the time of publication of this newsletter, the amount for the period from 1 January 2023 to 31 March 2023 had not yet been officially announced.
5. SATURDAY REMAINS A WORKING DAY (IN SOCIAL LAW)
From 1 January 2023, due to an amendment to the Civil Code, Saturday will no longer be considered a working day. We already informed you about this in our previous quarterly newsletter (Q4-2022).
However, on the last working day of 2022, a law was published in the Belgian Official Gazette neutralising that amendment to the Civil Code for the provisions on employment agreements, social security and social assistance.
In other words, if you learn of an urgent reason on Wednesday after 1 January 2023, you still have until Saturday to proceed to dismiss for urgent reasons (instead of until the following Monday). Also, ordinary letters of notice can still leave on Wednesday, so that the notice period can start as early as the following Monday.
6. BIRTH LEAVE FOR FATHERS AND CO-PARENTS, ADOPTION LEAVE AND FOSTER PARENT LEAVE
The following increases from 1 January 2023:
- the birth leave for fathers and co-parents from 15 to 20 days. The employee can take these days, freely chosen, within four months from the day of delivery;
- the additional credit of adoption leave (to be shared among adoptive parents) from two to three weeks;
- the additional credit of foster parent leave (to be shared among foster parents) from two to three weeks.
During the first 3 calendar days of the birth leave, adoption leave or foster parent leave, employees keep their salary, paid by the employer, after that they can rely on a benefit, paid by the health insurance fund.
7. WAGE TRESHOLDS
The Q1 2023 payroll administration review traditionally revises the wage thresholds for certain clauses in the employment contract.
These wage thresholds are relevant for testing the validity of and/or effect of:
- a non-compete clause: in a non-compete clause, the employee agrees not to engage in any similar activity when he leaves the company, be it by running his own business or by joining a competitor.
- an arbitration clause: in an arbitration clause, the employee and the employer agree in advance to submit disputes that would arise from the contract to arbitration.
- a training clause: in a training clause, an employee, who is allowed to follow training at the employer’s expense during the execution of his employment contract, agrees to repay part of the training costs to the employer if he leaves the company before the expiry of an agreed period.
From 1 January 2023, these clauses will only be valid if following wage thresholds are respected:
- the non-compete clause: €39,353.00 (if sectorally provided or in the case of sales representatives) and €78,806.00;
- the arbitration clause: €78,806.00;
- the training clause: €39,353.00.
8. REDUCTION/DEFERRAL OF NSSO CONTRIBUTIONS
Due to the mechanism of automatic indexation, wage costs in Belgium increase faster in times of high inflation than in neighbouring countries, where there is no such automatic system.
The legislator wishes to temper this increase temporarily by providing for a reduction in NSSO contributions on the one hand and spreading the payment of part of the NSSO contributions on the other. Two support measures are envisaged:
- for the first and second quarter of 2023: an exceptional reduction in net global employer contributions of 7.07%. This is an actual (one-off) exemption, so this reduction does not have to be made up at a later date;
- for the third and fourth quarter of 2023: a deferral of 7.07% of net global employer contributions. These deferred contributions will then be collected in four equal instalments in 2025.
9. CO2-REFERENCE VALUES COMPANY CAR / PHASING OUT FAVOURABLE REGIME PLUG-IN HYBRIDS
The CO2 reference values for calculating the benefit in kind for company vehicles for 2023 are known. The values will decrease, increasing the benefit in kind again in 2023.
From 1 January 2023, the CO2 reference values will be:
- for petrol, LPG or natural gas vehicles: 82 g/km;
- for diesel vehicles: 67 g/km.
From 1 January 2023, the fuel cost of newly purchased plug-in hybrids will only be tax deductible up to 50%.
10. ACCOUNTABILITY CONTRIBUTION FOR THE LONG-TERM SICK
Since 1 January 2022, the regulation has been in force that employers who, compared to other companies, have an excessive inflow of long-term sick employees must pay an additional NSSO contribution (called the “accountability contribution”).
However, this legislation provided for a reference period of 4 quarters, so the NSSO will only be able to effectively collect this additional contribution from this year onwards. In principle, if your company is at risk from this accountability contribution, you have already received a “warning letter”. The contribution amounts to 2.5%/year, i.e. an increase of 0.625% on the total quarterly salaries.
A recently published law dated 20 November 2022 clarifies how the concept of “excessive inflow” should be understood. For instance, it will look at the ratio of employees’ inflow into disability compared to other companies in the sector, as well as to the private sector in general. In any case, employers with fewer than 50 employees in the quarter in question are exempt from this legislation and therefore exempt from paying this contribution.
11. PURCHASING POWER PREMIUM
Companies that have achieved good or exceptional results during the year 2022 will have the possibility to grant their employees a one-off bonus of up to €500.00 (or in the case of exceptionally high profits, up to €750.00).
This premium can only be granted until 31 December 2023 and will be valid until 31 December 2024. Tax wise, it will be exempt from tax and in terms of social security, only a special employer’s contribution of 16.5% will be due.
This purchasing power premium will be able to be granted at sectoral or company level, through a collective labour agreement or on the basis of an individual agreement.
The above is subject to changes and to actual publication in the Belgian Official Gazette. At the time of publication of this newsletter, neither the law containing measures concerning the wage consultation for the period 2023-2024 nor the Royal Decree on the purchasing power premium had yet been published.
12. SOCIAL ELECTIONS
In our previous quarterly newsletter (Q4-2022), we gave you some preliminary thoughts on the 2024 social elections. After all, we were then at the start of the reference period, and as an employer it is then certainly worth evaluating your personnel policy keeping in mind a possible mandatory organisation of social elections in your company (or rather: in your technical business unit!).
With this quarterly newsletter, we can inform you that a unanimous agreement has been reached between the social partners in the NLC (National Labour Council) on the dates when the social elections will be organised, i.e. in the period between 13 May 2024 and 26 May 2024.
Depending on the election date chosen, that means the real pre-election phase will start in the period between 15 December 2023 and 28 December 2023. This is when you as an employer will have to make the first official announcements as part of the social elections. Of course, we will keep you further informed as this period approaches.
For now, it is recommended to think about the organisation and composition of your technical business unit. Our legal advisers can assist you in this regard.
13. ACCOUNTABILITY CONTRIBUTION FOR SUCCESSIVE DAY CONTRACTS TEMPORARY WORKERS
Companies that regularly use day contracts for temporary workers will have to pay an accountability contribution from 1 January 2023.
These are contracts for temporary work at the same company, concluded for a period not exceeding 24 hours and immediately following each other.
The accountability contribution is not payable in the context of flexi-jobs, temporary workers receiving a retirement or survivor’s pension, nor for casual workers at a company belonging to the Joint Committee for Agriculture (JC 144), Horticulture (JC 145) or Hotel Industry (JC 302).
The contribution varies between €10.00 and €40.00, multiplied by the total number of consecutive daily temporary employment contracts. If exceptional circumstances are shown to justify the use of consecutive temporary employment contracts of very short duration, the contribution may be recovered.
14. NEW WAGE WITHHOLDING TAX RULES
There are also some novelties on the tax front from 1 January 2023. Most notable among them are the new rules of calculation of wage withholding tax, published in the Belgian Official Gazette, the so-called ‘Annex III’.
Employees will see their net wage rise significantly in the new year due to this new calculation, now that the wage withholding tax has been adjusted to the high inflation. In addition, the wage withholding tax is now calculated using ‘sliding’ rates. This means that the taxable wage is no longer reduced to a lower multiple of 15 as was done before.
Along with Annex III, the key formula has also been published. Through the amounts, mentioned in the key formula, the automatic calculation of monthly remuneration of wages, unemployment regime with company supplement and pensions can be done.
In previous years, the ‘tax scales’ were also always published: an overview of the taxable wages and the amount of the wage withholding tax which corresponds to them. This was always for ‘scale I’, ‘scale II’ and ‘scale III’. From 2023 onwards, these ‘scales’ will no longer be published and the term ‘tax scales’ will therefore disappear.
As from 2023, there is also a table of contents in Annex III and more clarification of the various terms and, finally, there are clear separate chapters for ‘ordinary remuneration’ and ‘replacement income’.
15. TEMPORARY UNEMPLOYMENT ENERGY EXTENDED
Since 1 October 2022, energy-intensive companies can use the so-called temporary unemployment energy scheme. That temporary scheme was initially introduced until the end of 2022, but was extended until 31 March 2023. The obligations for the company remain the same: it is required that the employer files a form C106A-Energy with NEO. If the form has already been submitted, the end date is adjusted to 31 March 2023.
16. VACCINATION LEAVE EXTENDED
From 1 October 2022, any employee who wanted to be vaccinated against the coronavirus was again entitled to be absent from work, with pay, for the time required for the vaccination.
That vaccination leave was initially introduced until the end of 2022, but has now been extended to 31 March 2023 by a Royal Decree of 26 December 2022.
17. NEW SECTORS FOR FLEXI-JOBS
Flexi-jobs were already possible in the following sectors:
- the Joint Committee for the food trade (119);
- the Joint Committee for the independent retail businesses (201);
- the Joint Committee for the white-collar workers in food retail (202);
- the Joint Subcommittee for the medium-sized food companies (202.01);
- the Joint Committee for the hotel industry (302);
- the Joint Committee for large retail businesses (311);
- the Joint Committee for department stores (312);
- the Joint Committee for hairdressing and beauty care (314);
- the Guarantee and Social Fund for Bakery, Confectionery and Consumer Salons at a Confectionery, established by the Joint Committee for the food industry (118), sub-sector for industrial bread bakeries;
- the Joint Committee for temporary work, if the user is covered by one of the Joint Committees mentioned above or by the Guarantee and Social Fund mentioned above.
A programme law of 26 December 2022, extends the scope as from 1 January 2023 to employees and employers of the following Joint Committees:
- Joint Committee for sport (223);
- Joint Subcommittee for the operation of cinema halls (303.03);
- Joint Committee for the entertainment industry (304), except for artistic, artistic-technical and artistic-support functions that include activities referred to by the Law of 16 December 2022 establishing the Artwork Commission and improving the social protection of art workers;
- Joint Committee for health establishments and services (330) or for public establishments and services of the public health sector with NACE codes 86101, 86102, 86103, 86104, 86109, 86210, 86901, 86903, 86905, 86906, 86909, 87101, 87109, 87301 and 87302, except for functions that include tasks falling within the material scope of the coordinated Act of 10 May 2015 on the exercise of health professions.
The events sector may be added by Royal Decree.
18. STUDENT WORK QUOTA TEMPORARILY INCREASED
As from 1 January 2023, students can work as many as 600 hours per year without social security contributions being due on wages, instead of 475 hours. A solidarity contribution of 8.13% is of course due, of which 2.71% is borne by the student. For now, the increase applies only for 2023 and 2024.
Julie Van Kerckhoven
Publication date: 09/01/2023