Group S

Labour cost 

Recent measures have been taken to lower labour cost in Belgium :

Every employer who hires for the first time in Belgium is entitled to important reductions in social security contributions:

• total exemption from basic social security contributions for life for the 1^st employee;
  
  
• important reduction in social security contributions for over 3 years for the 2^nd, the 3^rd, the 4^th, the 5^th and the 6^th employees.
  
  

A British company hiring for the first time in Belgium will automatically qualify for those measures.

From 2018, the social contributions rate will be lower to 25% for and to 35% for blue collar workers.

Specific provisions of Belgian labour law

Legal minimum wage

In Belgium, minimum prevailing wages are usually set in collective agreements (CTT) concluded in the National Labour Council or joint committees. A “guaranteed minimum monthly wage” has been set for workers who do not fall within the scope of any joint committee. On the 1^st of December 2012, this gross minimum monthly wage equals to:

• 1.591,93 EUR for 18 years old workers;
  
  
• 1.572,48 EUR for 19 years old workers;
  
  
• 1.590,64 EUR for 20 years old workers.
  

Statutory working time

Maximum limits

The working time may not, in principle, exceed 8 hours a day and 38 hours a week (unless otherwise specified at the sector-specific level). However, this maximum working time may be increased as follows : 9 hours a day if the worker works 5 days a week and 40 hours a week (with the allocation of 12 compensatory days of rest over a one-year reference period unless otherwise specified at the sector-specific level).

Minimum limits

The working time may not be less than the following limits: daily minimum working time is 3 hours, the weekly minimum working time must equal at least one-third of the weekly working time of full-time employees, and at least 6 hours long for night-workers.

Derogations

In some cases prescribed by law and according to business sector, it is possible to derogate from the basic rules of the law. In most cases, such exemptions involve compliance with various conditions and a prior authorisation. Among those cases where derogations may be granted are for example: transport works, loading or unloading works, work whose execution time cannot be determined because of the nature of that work, work justified by unforeseen circumstances (but the work cannot be caused by a fault of the employer, etc.), in case of exceptional increase of work, work on stock-taking and balance-sheets, work in sectors where the substances processed can degenerate very quickly, work in successive shifts, etc. In any case, the daily work duration cannot exceed certain limits, which are 11 hours a day (12 hours a day in case of work which cannot be interrupted due to its nature) and 50 hours a week, except if the work is necessitated by compelling reasons, force majeure or emergency.

Flexible working

Flexible working time can be set by collective agreement or, in the absence of this, by the labour regulation. Provided that certain conditions are met, work that goes beyond regular working hours can be authorised, but the daily work time cannot exceed 9 hours a day and no working week may be more than 5 hours more or less than the standard working week and more than 2 hours more or less than the standard working day.

It is possible to apply in the company working hours that differ from the regular ones, with the worker being informed by notice displayed seven days beforehand. In most cases where working beyond the statutory working hours is authorised, compensatory rest times are compulsory. They must be granted in such a way that normal weekly working hours (namely 38 hours a week) are respected on average during a reference period. This period is normally one quarter but it can be extended up to a maximum of one year under certain conditions.

Overtime

Except in case of flexible working time or other specific exemptions, each working hour beyond legal working hours, namely 38 hours a week or 9 hours a day entitles to a double compensation. Firstly, compensatory rest times, equivalent to the amount of time worked beyond 38 hours per week, must be granted to the employee. Secondly, exceeding the standard daily and weekly working hours entitles to the payment of a legal extra pay equivalent to at least 50% (for each hour beyond the statutory working hours on weekdays, Saturday included) or 100% (in the case of overtime on Sundays or public holidays) above the legal wage.

Note that the employee may, of his/her own free will, waive the compensation of maximum 91 hours overtime worked, he/she will then receive both 100% of his/her normal wage and 50% or 100% extra pay.

Finally, two basic rules must in principle be fulfilled:

• compensation for overtime worked within the current calendar quarter. Compensatory rest days must be real and may not coincide with days the employee would not have worked anyway (Sundays, bank holidays, etc.).
  
  
• prohibition on exceeding 78 hours overtime during the reference period (calendar quarter or other period) or 91 hours if the reference period is one year, without granting compensatory rest immediately after the period of work.

Retirement age

In general, the legal retirement age is in principle 65 years.

However the retirement age has recently been modified to become:

• starting from 2025: minimum age of 66 years
  
  
• stating from 2030: minimum age of 67 years

Employment contracts

The two main types of employment contracts prevailing in Belgium are permanent contracts and fixed-term contracts. Fixed-term contracts may be renewed if the following cumulative conditions are met:

• maximum number of successive fixed-term contracts: 4;
  
  
• duration of each fixed-term contract: at least 3 months;
  
  
• total duration of successive fixed-term contracts: cannot exceed 24 months.

Trial period

The trial period is removed since the 1^st of January 2014. However, during the first 6 months of the contract, the employer has not to state the reasons for dismissal of an employee and notice periods are short (2 to 4 weeks).

Paid leave

In the private sector, the number of paid leave days which an employee is entitled to shall be proportional to the number of worked days during the previous year. A full year of work gives right, for the following year, to 20 paid leave days for five-day work weeks or 24 days for six-day work weeks.

Termination of the employment contract by the employer

For employment contracts that started on or after the 1^st of January 2014, notice periods for permanent contracts depend solely on employee's length of service with the employer.

If an employer wants the termination to take effect immediately without allowing the employee to work during the notice period, he will be liable to pay notice compensation which equals to all the wages the employee would have been entitled if the notice period ad been worked. In the case of serious misconduct, the termination takes effect immediately without notice period or compensation.

Except in cases of serious misconduct, the employer has only to state the reasons for dismissal of an employee upon request of the employee. Furthermore, he has not to state the reasons for dismissal of an employee during the first 6 months of the contract.

Collective bargaining at company level

In Belgium, employee representation in companies exists in the form of three bodies:

• The Works Council: mandatory in any company with 100 employees or more. It consists of representatives of the employer and the employees and is competent with regard to economic and financial issues, personnel management and work regulations.
  
  
• The Trade Union Delegation: established upon request of the trade unions in all companies with a certain number of employees depending on each sector. It intervenes in all issues relating to working conditions.
  
  
• The Committee for Prevention and Protection at Work: mandatory in any company with 50 employees or more. It consists of representatives of the employer and the employees and intervenes in all issues relating to safety at work.

The social elections take place every four years and it is checked during the year before the elections whether the workforce size thresholds have been met. 

Public holidays

The employee may not be employed on 10 statutory public holidays per calendar year and the employer has to pay wages for these public holidays: 1^st of January, Easter Monday, 1^st of May (Labour day), Ascension, Whit Monday, 21^st of July (National Day), 15th of August (Assumption), 1^st of November (All Saints' Day), 11^th of November (Armistice Day), 25^th of December (Christmas).

Foreign workers

To enter Belgium, citizens of the European Union or the European Economic Area do not have to comply with any particular formalities or apply for a work permit for carrying out an occupational activity.

The foreign employees can benefit from an advantageous tax regime in Belgium if they comply with one of the following conditions:

• They are posted by a foreign company to work temporarily with its Belgian branch/subsidiary or with another undertaking controlled by the foreign company or by a Belgian enterprise that is part of an international group to work temporarily in one Belgian company which is part of said group, or in a controlling and coordinating office set up within the international group.
  
  
• They are recruited by the Belgian branch or by a subsidiary of a foreign company that is part of an international group to work in Belgium.

The essential advantages of this taxation scheme may be summed up as follows:

• Some allowances paid by the employer to the foreign executive are not considered as remuneration subject to social security contributions and income taxes, but as “employer’s own costs”. They correspond to “additional expenses” associated with the stay of the executive in Belgium: it concerns one-off expenses and costs (moving to Belgium, setting up the accommodation in Belgium, moving from Belgium to another country, etc.) and recurring expenses (children’s school fees, annual travel expenses to the place of origin). Except for school fees, these expenses are covered up to a maximum of 11 250 EUR. In the R&D sector, this amount shall be raised to 29 750 EUR.
  
  
• The exclusion for the foreign executives, from their taxable income, of the part of their remuneration corresponding to professional activities exercised abroad. The total remuneration (after deducting reimbursed expenses) must be broken down into the share corresponding to professional activity exercised in Belgium (taxable) and the share corresponding to professional activity exercised outside the country (not taxable).

The special taxation scheme for foreign executives must be obtained from the Tax administration within six months after entry into service in Belgium and must be renewed every 12 months.