[Belgium] Major changes to employment law and social security proposed

Belgium’s new government intends to make significant changes to the country’s labour laws in its proposed Federal Coalition Agreement, with cost and policy implications for employers, WTW reports.

The agreement covers a host of areas from compensation and benefits to dismissal and unemployment, its overall aim is to increase the flexibility and efficiency of the labour market while ensuring job security and social protection.

Planned changes to compensation and benefits under the Federal Coalition Agreement reportedly include:

• Mandating employer provision of occupational pension benefits for all employees, with a minimum employer contribution of 3 per cent of pay by 2035

• Increasing the maximum tax-favoured daily value of meal vouchers, from €8 to €12 per employee, offset by eliminating all other vouchers

• Establishing a legal framework for flexible compensation (“cafeteria” systems), subject to a maximum of 20 per cent of annual gross salary for salary sacrifice

• Reforming “mobility budgets” (for company cars) to apply to all employees and basing the taxable value of transportation by car or other means on the real rather than deemed value

• Simplifying regulations on collective bonus systems, regarding tax-favored payments from profit-sharing and fixed non-recurring bonus schemes

More broadly, the government’s goal is reportedly to increase net wages for low and middle-income earners, by increasing the basic tax exemption, reducing special social security contributions and incentivising using employment bonuses. According to WTW, covered earnings for determining employer social security contributions would be capped, at an amount to be determined.

Source: WTW

Belgium’s new government intends to make significant changes to the country’s labour laws in its proposed Federal Coalition Agreement, with cost and policy implications for employers, WTW reports.

The agreement covers a host of areas from compensation and benefits to dismissal and unemployment, its overall aim is to increase the flexibility and efficiency of the labour market while ensuring job security and social protection.

Planned changes to compensation and benefits under the Federal Coalition Agreement reportedly include:

• Mandating employer provision of occupational pension benefits for all employees, with a minimum employer contribution of 3 per cent of pay by 2035

• Increasing the maximum tax-favoured daily value of meal vouchers, from €8 to €12 per employee, offset by eliminating all other vouchers

• Establishing a legal framework for flexible compensation (“cafeteria” systems), subject to a maximum of 20 per cent of annual gross salary for salary sacrifice

• Reforming “mobility budgets” (for company cars) to apply to all employees and basing the taxable value of transportation by car or other means on the real rather than deemed value

• Simplifying regulations on collective bonus systems, regarding tax-favored payments from profit-sharing and fixed non-recurring bonus schemes

More broadly, the government’s goal is reportedly to increase net wages for low and middle-income earners, by increasing the basic tax exemption, reducing special social security contributions and incentivising using employment bonuses. According to WTW, covered earnings for determining employer social security contributions would be capped, at an amount to be determined.

Source: WTW