Your payroll administration in Q4.2022
Winter is just around the corner and with it, the fourth quarter. What does this mean for your payroll administration? We have alreay listed the particulars.
1. INDEXATIONS ARE SKYROCKETING
Belgium has an automatic wage indexation. Since the wage index mechanism is triggered by inflation, more indexations are expected soon. Take this into account when budgeting for wage increases and new hires.
For the following sectors, the forecasts are as follows:
• In the Construction sector (JC 124), wages are indexed quarterly. On 01/10/2022, wages will increase by 1.81553%. For 2023, expectations are as follows: 2.78409% on 01/01/2023; 2.57365% on 01/04/2023; 1.53975% on 01/07/2023 and 1.07248% on 01/10/2023.
• In the Supplementary Joint Committee for White-collar Workers (JC 200), an indexation of as much as 10.48% is expected on 01/01/2023.
• In the metal sector (JC 111 and JC 209), an indexation of 8.90% is expected on 01/07/2023.
• In the electrical sector (JC 149), there is talk of a 10.61% increase by 01/01/2023.
The above rates are purely indicative at this stage but they do apply to both minimum and real wages.
2. INCREASE IN HOME WORKING ALLOWANCE
To employees who engage in homeworking on a regular and structural basis (at least one day a week), the employer can grant a lump-sum net allowance to cover the costs associated with homeworking.
This homeworking allowance has been increased to €142.95 per month as of 1 September 2022.
Please note, that you must be able to justify the application of this flat rate. What is meant here, is that, as an employer, you must be able to demonstrate that these costs are actually incurred. We therefore recommend that you draw up a teleworking policy that defines homeworking and its specific modalities. Of course, we can help you draw up this policy.
3. INCREASE IN MILEAGE ALLOWANCE
The mileage allowance for commuting and professional travel by car was also increased to €0.4170/km, this for the period from 1 July 2022 to 30 June 2023. This is the maximum amount that an employer may grant, making it no obligation. Given the high energy prices, we do not rule out additional measures proposed by the government.
4. END OF RELANCE OVERTIME
To boost the economy after the Covid pandemic, the 2021-2022 social agreement granted 120 additional voluntary overtime hours per year for 2021 and 2022, the so-called relance or recovery overtime.
This relance overtime allowed overtime to be performed without granting compensation days or overtime pay and were exempt from social and tax deductions.
This measure now expires on 31 December 2022.
5. TELEWORKING ACROSS BORDERS – END OF TEMPORARY CORONA TOLERANCE, BUT TRANSITIONAL SOCIAL SECURITY PERIOD FOR CROSS-BORDER WORKERS
This tolerance meant that from 13 March 2020 to 30 June 2022 the Belgian National Social Security Office decided not to take into account periods of teleworking on the Belgian territory due to the corona crisis when determining the applicable social security scheme.
Similarly, the tax authorities concluded agreements with Belgium’s neighbouring countries – the Netherlands, France, Germany and Luxembourg to also disregard teleworking periods due to the corona crisis for tax purposes. These measures also expired on 30 June 2022.
As regards social security, a transitional period until 31 December 2022 was granted for cross-border workers who telework. As a result, the teleworking of cross-border workers in their country of residence will not entail a change in the applicable social security system. For now it is unclear which rules will apply as from 1 January 2023.
On the tax front the agreements from the double taxation treaties were again given full effect as from 1 July 2022. The above mentioned agreements with Belgium’s neighbouring countries were not renewed by the tax authorities.
This means that, in principle, income tax is due in the employee’s country of residence. However, employees working across borders may also be taxable in another country where they physically work.
This can create a salary split situation where an employee is taxable in their country of residence and also in their country of employment.
Consequently, the effective presence of the employee in a particular country is decisive. Most double taxation traties state that the country of residence is authorised to levy taxes on an employee’s worldwide income when:
(1) the employee does not perform services in another country for more than 183 days
(2) AND the employee’s wages are not borne by an employer established in the country of employment
(3) nor by a permanent establishment of the employer in that country of employment.
If all three aforementioned conditions are not met simultaneously, the employee will be taxable in their country of employment for services rendered in that country and a proper salary split must be set up.
6. SOCIAL ELECTIONS 2024
The 2024 social elections still seem a long way off, yet it may be important to think about them already. After all, the obligation to organise social elections depends on the typical average employment in your company during a given reference period.
If the legislation on social elections remains unchanged and if we assume that social elections are to be organised again in the second quarter, that reference period will run from 1 October 2022 to 30 September 2023.
As a reminder, once your company has a typical average employment of 50 employees during this reference period, elections will have to be organised for the committee for prevention and protection at work. As soon as that number rises to 100 employees, the same applies to the works council. The typical average employment is calculated using a fixed formula. You will have to take into account, among other things, all employees with an employment contract (blue-collar workers, white-collar workers, apprentices), but also some employees without an employment contract (e.g. those undergoing individual vocational training). Long-term disabled employees or employees taking full-time time credit during the reference period should also be included in the calculation. In the second quarter of 2023, you will also have to include temporary workers – provided they do not replace a permanent employee.
Whether the result of the calculation actually reflects the typical average employment in your company can be examined based on evidence. If exceptional circumstances occur during the reference period that result in a temporary increase or reduction in staff, this may have an impact on the obligation to organise social elections.
7. SATURDAY IS NO LONGER A WORKING DAY
From 1 January 2023, due to an amendment to the Civil Code, Saturday will no longer be considered a working day.
This will have an impact on the deadlines that you, as an employer, have to respect in case of a dismissal with notice or in case of a dismissal for urgent reasons.
Currently, all days of the week are considered ‘working days’ except Sundays and public holidays. Its consequence therefore is such, that Saturday too is considered a ‘working day’.
When an employment contract is terminated with a notice period, this must be done by means of a registered letter of notice that only takes effect on the third working day after the shipment date. The notice period always begins to run on the Monday following the week in which the notice was given.
Currently this means that the notice letter must be sent by registered mail by Wednesday at the latest, so that the notice period starts on Monday the following week.
Due to the aforementioned amendment to the Civil Code, as of 1 January 2023, the notice letter will have to be sent by registered mail no later than Tuesday (instead of Wednesday) (in a week without any public holidays).
When an employment contract is terminated by the employer for urgent reasons, the following procedure should be followed :
– the employer must terminate the employment contract within a period of three working days starting from the following day after the deeds, that give reason to an urgent termination become known;
– the employer must notify the employee of the deeds attributable to them within a second period of 3 working days starting the day following the day on which the contract was terminated.
As a result, as of 1 January 2023, if you learn of an urgent reason on a Wednesday, you still have until the following Monday at the latest to proceed with the dismissal for urgent reasons (instead of on Saturday the same week). If the dismissal for urgent reasons was carried out on Wednesday, the registered letter stating the reasons for the dismissal can still be sent at the latest the following Monday (instead of on Saturday the same week).
Please note, that at Minister Dermagne’s express request, the National Labour Council will soon issue an opinion on whether it is desirable to stop considering Saturdays as working days in labour law. If the social partners prefer to still include Saturdays as working days, the government is still considering submitting a bill to that effect.
8. YEAR-END ADMINISTRATION
a) The holiday allowance
In principle, all legal annual holidays must be taken before the end of the calendar year. This means it is impossible to pay out or carry over untaken holidays to the next calendar year.
However, to the white-collar worker who is unable to take all or part of the holiday before the end of the year due to force majeure (e.g. long-term illness) or due to suspension of the contract (e.g. maternity leave), the employer is obliged to pay the holiday allowance, and this no later than 31 December of the year when the holiday was meant to be taken.
Therefore it is best that you as an employer ensure that legal annual holidays are taken on time. An employer who cannot prove that employees were reminded to do so may be sanctioned with administrative or criminal fines.
b) The end-of-year gifts
If you want to give your employees a gift on the occasion of the end-of-year period, you can do so either in the form of a present, a gift voucher, cash, etc. These end-of-year gifts are not subject to NSSO contributions and taxes if they:
– are given on the occasion of St Nicholas, Christmas or New Year;
– per year and per employee amount to maximum €40.00 (to be increased by €40.00 per dependent child of the respective employee);
– are awarded collectively based on the same method of calculation.
Moreover, as an employer, you can deduct end-of-year gifts as a professional expense if the above conditions are met.
c) Replacement holidays
A public holiday that coincides with a Sunday or an inactivity day must be replaced by another working day. If the replacement day is not determined at a sectoral level, you should take action within your company before 15 December. If you fail to do so, the holiday will be replaced by the company’s first working day following the public holiday. In 2023 the following public holidays will coincide with a Sunday or a day on which no work is generally performed:
– Sunday, 1 January 2023 (New Year);
– Saturday, 11 November 2023 (Armistice Day).
d) Collective closure period
As an employer you are prohibited from unilaterally imposing holidays. However, you can introduce a collective closure period by amending the work regulations. If it is the first time you are introducing such a closure period, you should follow the special amendment procedure and notify your employees.
9. TEMPORARY UNEMPLOYMENT “ENERGY”
Companies experiencing difficulties in employing staff as a result of the energy crisis will be able to resort to the so-called “energy” temporary unemployment from 1 October 2022. This is a new form of temporary unemployment, similar to the “corona” temporary unemployment. It will be in force at least until 31 December 2022, but may be extended after a mid-term review.
The government has already communicated that a company will be able to invoke this form of temporary unemployment if:
- the company’s energy cost is at least 3% of the production value; or
- the company’s energy bills have doubled in 2022 compared to 2021.
We are awaiting the official publication of the regulations in order to provide you with more detailed information.