Belgium: Salary freeze 2013: some guidelines
Salary freeze 2013: some guidelines
Every two years, the maximum margin for the increase of salary costs has to be fixed nationally in Belgium. This requirement is laid down in the Belgian Act of 26 July 1996 on the promotion of employment and protection of competitiveness (the “1996 Act”).
The Belgian government decided in November 2012 that the maximum margin for the increase in salary costs would be fixed at 0% for 2013 and 2014. However, until recently, this maximum margin was not set down by any legislation.
Recently, the government has fixed the salary standard based on the 1996 Act in the form of a royal decree (RD of 28 April 2013 – which came into force on 2 May 2013). They have implemented the nil increase for 2013 and 2014.
Infringements under the 1996 Act carry an official fine, though this is not laid down in the Employment Criminal Code.
1 January or 2 May 2013?
On the basis of the text itself, the Royal Decree is of retroactive effect as from 1 January 2013. However, in principle, the RD cannot be of retroactive effect, as stated by the advice issued by the Raad van State/Conseil d'Etat in respect of the previous Royal Decree for the years 2011-2012.
What is not considered as salary?
The salary cost includes fixed salary, variable salary of any kind, fringe benefits, supplementary payments, meal vouchers, etc.
However, the 1996 Act provides that some increases should not be taken into account for calculating compliance with the maximum margin for salary cost increases, such as increases in salary cost as a result of indexation and existing salary scale changes. Also excluded are:
- profit-sharing schemes
- increases in the number of employees (expressed as full-time equivalents)
- employees’ participation schemes
- employer contributions to “social” supplementary pension schemes
- the “innovation premium”
A new factor is the recent (2013) Ministerial Circular letter advising the social inspectorate of what is allowed and not allowed by the 1996 Act. Please note that this is only official guidance and should be treated accordingly. The authorities list the following as not considered as salary-cost increases (16 item list of which we list the most important ones):
- New salary benefits under CBA no. 90 (collective bonus schemes) are permitted.
- The introduction or raising of contributions for "regular" supplementary pension schemes, subject to certain conditions.
- Actual indexation of wages and other benefits (meal and eco-vouchers, trade union premiums, etc.) is permitted where no automatic indexation mechanism is laid down in the CBA.
- Increases in contributions to be able to meet certain existing CBA agreements (e.g. under statutory obligations for training measures, increases in insurance premiums, etc.).
- CBA agreements aimed at eliminating the wage gap between men and women as an extrapolation of the Act of 22 April 2012.
- CBA agreements aimed at eliminating the differences between blue- and white-collar workers on a case-by-case basis.
- Harmonisation further to transfers of undertakings
Please note that the 1996 Act is under review by the government. As such substantial changes are announced. We will keep you updated on any new developments.
Please do not hesitate to contact us should you require further information on this topic.