Face forward: Michel I

It has been a while, but since a couple of months, Belgium has again a pro-business government. The measures proposed regarding labour law and social security clearly strive to achieve growth and competitiveness. The measures concern among others, the decreasing the social security rate, eliminating the wage handicap, making working time more flexible, and activating the elder workforce. 

None of the projected changes have been adopted in new legislation so far. The new government will make work of it. 

Here follows an overview of the measures that may be of interest for your company:

• At the end of the four year term of this government (2018), the social security contributions will decrease to a base rate of 25 % (instead of the current 35 %).
• The government aims to eliminate by the end of its term, the wage cost handicap Belgium has compared to reference countries being France, The Netherlands and Germany. This includes an index jump in 2015, entailing that exceptionally the salaries will not be adapted to the index in 2015 as generally foreseen on sector level. Apart from indexations on sector level in 2016, no other salary increases will be allowed if the total salary cost in the company becomes higher.
• The rules regarding work duration, working hours and flexible work will become effectively more flexible. A modernisation of these rules is as a matter of fact much needed. Also the teleworking rules will be reviewed and adapted, in order to allow a better work-life balance and fixing the mobility problems.
• Order will be made in what is now a labyrinth of rules with regard to career breaks and parental leave. Conditions to qualify for a career break and more precisely for a replacement income during that break (paid by the social security) will become more stringent. The new government intends to cancel the possibility to take career break without a statutory defined reason (such as the care of a child, care of a sick person…).
• Another action point is the activation of the workforce. Employees will be required to work during 45 years, duration that will be considered a full career. The statutory retirement age will be increased to 66 in 2025 and 67 in 2030.