Belgium employment law alert – April 2023

Inflation and optimizing salary. The high inflation rates in 2022 and the subsequent mandatory indexation that employers had to apply have significantly increased the salary cost for many employers. As employers are also facing increased prices in the provisions of goods and services, employers are looking into ways to optimize the salary and benefit package of their employees by granting more tax efficient benefits in order to reduce the salary cost and simultaneously, offer their employees a competitive (net) package.

Whistleblowing. Companies in the financial services industry and companies with at least 250 employees were required to establish internal whistleblowing reporting channels by 15 February 2023. Other companies with at least 50 employees have until 17 December 2023 to establish such channels. The latter category of employers should start with its preparations now to ensure the deadline of 17 December 2023 can be met. We elaborate on the provisions in the new Whistleblowing Act in force from 15 February 2023,  and outline considerations for employers under the new protection and support measures available for whistleblowers.

Upcoming tax reform. The Belgian Finance Minister has launched a proposal for a tax reform which contains, among others, changes to the tax regime applicable on a number of employee benefits, such as base salary, share (option) plans and supplementary pensions. If approved, there will be an important impact on the tax treatment and subsequently the employer's cost of different employee benefits.

Saturday remains a business day. Under new legislation, from 1 January 2023 a neutralisation bill comes into force allowing Saturday to remain a business day.  This rule has significant impact on individual labour relationships and the strict procedural rules with which they have to comply.

Sickness certificate. From 28 November 2022, an Act containing various provisions on disability came into force, along with the abolishment of a medical certificate requirement from employees who are absent for 1-day due to sickness (up to three times per year). Employers of less than 50 employees are exempt from this new provision, but they must amend their work regulations or introduce a company collective agreement to explicitly state that they are deviating from this new rule, ie that a medical certificate remains required for 1-day sickness absences.

Purchasing power premium. A draft bill and royal decree has been approved granting a purchasing power premium for employees of companies that achieved good results during the crisis. If companies have achieved so-called good results during the year 2022, they will have the opportunity to grant their employees a one-time premium of up to €500. In the case of exceptionally high profits, the premium can be up to €750. The purchasing power premium will be available to issue from 31 December 2023 and will be valid through until 31 December 2024. The premium will be subject to a special employer contribution of 16.5% and no employee contribution will be due. For tax purposes, the purchasing power premium will be considered as tax exempt. The purchasing power premium and the special contribution payable thereon will also constitute professional expenses.

Annual leave entitlement reinforced. A royal decree has been approved granting the right to transfer untaken leave days. In Belgium, a full-time employee is in principle entitled to 20 days of annual leave. If under certain circumstances an employee is prevented from taking his leave, he will now retain the right to take up these days during a two year-period following the year in which he should have taken the holidays. The circumstances that allow a transfer of the leave days are accident, illness, maternity leave, parental leave, adoption leave, prophylactic leave or foster care leave. Moreover, these circumstances cannot be imputed on the annual leave days, even if they occur during the leave.  For example, if an employee falls ill or has an accident during his annual leave, the incapacity to work will prevail over the annual leave. The employee will retain the right to the leave that he was not able to take due to these circumstances. Finally, at the end of the employment relationship, the holiday certificate must now mention the transferred statutory leave. These new rules take effect on 1 January 2023 and apply for the first time to the 2024 leave year.

Discrimination and bullying at work. A bill has been approved containing four amendments to the rules on discrimination and harassment at work:

• First, the protection of employees against adverse measures taken by the employer is extended. From now on, employers must be able to prove that any adverse action taken is unrelated to both the report (or complaint, legal action or request) by the employee and to facts that can be inferred from the content of this. Previously, nothing was stipulated about the content.

• Second, the scope of those protected from adverse action is increased. Previously, only official witnesses were protected, who could produce a signed and dated document relating to their testimony. In the future, informal witness will also enjoy the protection against adverse action as long as an "active contribution" took place. This includes, for example, a person who has stood up for the victim in a discussion with a supervisor.

• Third, it will be easier for employees to get compensation for retaliatory measures because the reintegration request is no longer obligatory. Previously, the employee who was the victim of unilateral changes to their working conditions following an action against discrimination used to only have a right to a compensation if a reintegration request was filed.

• Finally, the compensation for discrimination can now be cumulated with the indemnity for retaliation measures. By example, in case of a discrimination against an employee due to her promotion not being granted because of her pregnancy, the victim claims and obtains damages on the grounds of discrimination. The employer is upset that the employee initiated legal proceedings and dismisses her. In such a case, the employee suffers another injury and may again claim damages.

Bike allowance. The National Labour Council signed a collective agreement (CLA No. 164) to extend the obligation to contribute to their employee's transport by bike across all sectors. In essence, the obligation concerns a positive cash incentive to use the bike for the work-home commute with an allowance of EUR 0.27 per kilometre travelled. The allowance is exempt from taxes and social security contributions and will annually change in line with inflation. The compensated distance is limited to 20 kilometres each way and will be paid every month in arrears together with the employees' wages. As of 1 May 2023, employees in the private sector who "regularly" (as opposed to occasionally) commute to work by bicycle will be entitled to the bicycle allowance based on distance travelled.

Transparency rules for supplementary pension plans. A new Act containing a number of administrative simplifications and modified information procedures in relation to the management of supplementary pension plans has been approved. Although these new rules are mainly aimed at pension institutions, there are some important changes for employers as well. The most relevant changes for employers are as follows:

• From 1 January 2024, Sigedis (responsible entity for the statutory data base on supplementary pensions) will be responsible for drafting and communicating the annual pension statement to all affiliates.

• New and more transparent information procedures apply in case of exit, retirement and death.  

• It is possible to transfer the responsibility for other statutory information obligations to Sigedis from 1 January 2023.

To discuss the above or any other developments that may be affecting employers please contact our Belgian team.

Our team provides comprehensive and competent advice in all areas of individual and collective employment law.