Your payroll administration in Q4 – 2020

2. Informal care

Last year, the thematic leave for informal care (caring for dependent persons) was introduced.

In order to be able to make use of this leave, one must be “recognised as an informal carer of a person in need of care”. However, the royal decree that was to regulate the formalities for this recognition was delayed, which meant that it was not yet possible to make use of this leave.

On 25 June 2020, the necessary royal decree was finally published, as a result of which recognition as an informal carer can be applied for as of 1 September 2020.

From the moment one has the relevant recognition, one can apply for the thematic leave for informal care with his employer and obtain an allowance from the NEO (National Employment Office).

3. No WHT for young employees in Q4 2020

For a young person who enters into employment in the fourth quarter of 2020, no wage withholding tax will be due this year if the following conditions are met:

• The young person has completed a study programme with a full curriculum, no longer carries out a study activity (thesis, work placement, etc.) and is no longer subject to compulsory education;
• The young person has either not worked or only worked with a student contract (exempt from social security) before entering into employment;
• The gross taxable monthly salary (= gross salary after deduction of social security contributions) is less than 3,400 euros.

4. End-of-year administration

4.1 Points of attention holiday allowance

In principle, all statutory holidays must be taken before the end of the calendar year. In concrete terms, this means that it is impossible to pay out or carry over unused holidays to the following calendar year.

There are only a few exceptions to this general principle. The employer will have to pay out the holiday pay by 31 December at the latest if a white-collar worker was unable to take his holidays (e.g. due to incapacity for work). If, on average, a white-collar worker works fewer hours during the course of the year, a “December settlement” must be drawn up. This settlement can be compared to a settlement of holiday pay upon leaving employment. However, the settlement now takes place in December and the reason is a reduction in working hours.

As an employer, you must therefore ensure that the statutory holidays are taken on time. An employer who cannot prove that the employees have been reminded to do so can be sanctioned with administrative or criminal fines. Check whether anything has been arranged for the additional holidays at sector or company level, maybe these can be transferred!

4.2 Extras on the occasion of end-of-year celebrations

If you would like to give your employees a gift for the end of the year, you can do this in the form of a gift, a gift cheque, cash,…

These end-of-year gifts are not subject to social security contributions and taxes if they are:

• donated on the occasion of Sinterklaas, Christmas or New Year;
• amount to a maximum of 40.00 euros per year and per employee (to be increased by 40.00 euros per dependent child of the employee concerned);
• are granted collectively on the basis of the same method of calculation.

You can deduct the end-of-year gifts as professional expenses if you comply with the above conditions.

4.3 Replacement holidays

A public holiday which coincides with a Sunday or inactivity day must be replaced by another working day. If the replacement day is not fixed at sector level, you must take action within your company before 15 December. If you fail to do so, the public holiday will be replaced by the first working day of the company following the public holiday.

4.4 Collective closure period

As an employer, it is forbidden to impose unilateral holidays. However, you can introduce a collective closure period by amending the work regulations. If this is the first time you introduce such a closure period, you must follow the special amendment procedure and inform your employees accordingly.

Attention: collective leave can also be determined at sector level by the joint committee!

5. Calculation of severance payments in case of time credit with care motive

In a judgment of 22 June 2020, the Court of Cassation ruled that, in the event of dismissal, an employee in motivated time credit (in particular for the care of a child -8 years) is entitled to severance and protection indemnity calculated on the basis of the salary due if the work was not temporarily reduced.

The Court argues that to do otherwise would constitute indirect discrimination on grounds of sex. Since it is more often women who take out time credit for bringing up children, it is, according to the Court, mostly women who are disadvantaged by this rule without justification. For this reason, the Court finds that the provision is contrary to European legislation, including the principle of equal pay for men and women for equal work or work of equal value (Article 157 of the Treaty on the Functioning of the European Union).

This decision is somewhat unexpected in the light of previous jurisprudence of the Constitutional Court in which it was always confirmed that, for the calculation of the severance pay of an employee in part-time credit with motive, the remuneration to which the employee was actually entitled at the time of the termination had to be taken into account.

In view of the contradictory judgments, it will remain uncertain what position will be adopted by the lower courts.