Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Belgium might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labor contracts for employees in Belgium, including local benefits. When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In Belgium, benefits are guaranteed by national legislation as well as collective agreements with trade unions or workers’ councils. Our guide will explain what benefits and employee compensation are guaranteed, and what can be modified, for any employer who wishes to expand their business into Belgium.
What Compensation Laws exist in Belgium?
In Belgium, a comprehensive framework of employment laws and regulations guarantee employees enjoy protection throughout their working life. Legislation covers such as minimum wages, social insurance, redundancy, termination, and severance, working hours, vacation leave, maternity, and paternity issues and more. Statutory and mandatory minimums cannot be undercut by collective or trade union agreements, although these can improve entitlements for employees. Drawing up contracts is complex enough, but in Belgium it is vital to fulfil responsibilities to your employees over benefits, compensation, and minimum requirements. Do not take the risk of ignoring them. Compensation and benefits include:
- Social Insurance: These are based on total remuneration including salary, bonuses, and benefits in kind. For white-collar workers the employer remits to the authorities the equivalent of 25% of the employee’s pay. Employees contribute 13.07%.
- National Minimum Wage (NMW): Minimum wages operate either with limits set by Collective Bargaining Agreements (CBAs) or as a national minimum where no collective agreements exist. The Belgian Government reviews the NMW bi-annually and in 2021 it remained at €1,627 (US$1,925) per month or €19,508 (US$23,086) per year based on 12 payments each year.
- Working Hours and Rest Periods: Daily working time should not exceed eight hours limited to 38 a week, or nine hours a day up to 40 hours a week in some sectors. CBAs may set fewer working hours per week. After six hours the worker receives a break as per a collective agreement, or at least 15 minutes if there is no agreement. Shift work hours can be up to 12 hours per day to a maximum of 50 hours per week, based on two daily shifts and two workers. Flexible arrangements permit more than 38 hours a week as long as the quarterly or annual average is brought down to 38 hours. Strictly applied rules govern night work, working on Sundays or public holidays.
- Overtime: Authorized overtime entitles workers to 50% extra above their hourly wage Monday to Saturday and a 100% increase for overtime on Sundays or public holidays. Overtime hours must not exceed normal working hours, averaged over a set period, and employees receive compensatory time off or paid breaks during overtime. Rules on overtime do not generally apply to remote workers, sales representatives, or those in managerial or executive positions.
- Holiday Leave: Paid vacations depend on length of service and the months worked during the preceding year, which generally equates to 24 vacation days (six-days-a-week scheme) or 20 vacation days (five-days-a-week). Employees who have worked less than 12 months have their entitlement reduced pro rata, while CBAs regularly increase basic statutory requirements.
- Maternity Leave and Benefits: Employed and unemployed receive 15 weeks’ maternity leave, comprising two periods split between pre- and post-natal. An employee’s maternity benefit is 82% of salary (no ceiling) for the first 30 days, and 75% of salary (subject to ceiling) from the 31st day onwards; up to a maximum €110.23 (US$130) per day. Maternity benefits are paid by the employee’s mutual insurance fund. Co-parents are entitled to four months parental leave.
- Paternity Leave: In January 2021 paternity leave was increased from 10 days to 15 days, which can be taken consecutively, in single days or 30 half-days. In 2023, it will be increased by a further five days and applies to all workers, the self-employed and civil servants. Leave can be taken in the first four months after birth. The first three days, the employer pays full salary. The remainder is paid at 82% of salary by the social insurance fund, capped at €114.59 (US$135) per day.
- Redundancy, Termination and Severance: Employees with more than six months’ service must be given the reason for termination; failure by the employer to do so can result in a ‘fine’ of two weeks salary. If the Labor Court rules dismissal was unjustified, the employee can be compensated between three- and 17-weeks’ salary. An employer can terminate a contract with a severance / redundancy payment in lieu of notice, either for the full period or part of it with the remainder served as notice. The employer and employee must choose between serving the notice period during which the employment contract is still running, or severance pay by stopping the contract immediately. In the latter case, severance pay is equivalent to the wage and benefits multiplied by the duration of the notice period that should have been notified.
Social Security in Belgium
Belgium has a comprehensive social security system, covering such as family allowances, pensions, reimbursed medical costs and illness or injuries that prevent work. Everyone is entitled to social services support from the public social welfare center, CPAS/OCMW. Foreigners are also entitled to some levels of support, depending on agreements between Belgium and their home country or directives from the European Union (EU). Entitlement may depend on nationality, personal or employment status and whether individuals are salaried staff, self-employed, on temporary transfer to Belgium or retired. The Coming2belgium site details which entitlements are available from the various Belgian social security institutions. Employers and employees pay into the social security funds. Contributions are based on total remuneration including salary, bonuses, and benefits in kind. For white-collar workers the employer remits to the authorities the equivalent of 25% of the employee’s pay. Employees contribute 13.07% from their remuneration. Allowances include:
- Sickness benefits
- Unemployment support
- Inability to work through illness or incapacity
- Injury suffered at work
- Industrial disease
- Family allowances