In a previous blog [here] I mentioned to you that the social partners – bar one – had come to an agreement on employment conditions for 2019 and 2020. This agreement was then to be further implemented by social partners at an industry level.

On 2 July the social partners of the country’s largest joint committee for white-collar employees, JC 200, the committee for employers who do not belong to any other committee, reached an agreement.

The most important element of the agreement is the allocation of the 1.1% salary increase that is allowed under the so-called wage norm. This national wage norm limits the percentage by which wages may increase on average over the course of the next two years, excluding indexation and automatic wage-scale increases. Salary increases which exceed the norm are – mostly in theory- punishable by law.

JC 200 has translated the 1.1% salary increase differently depending on whether the relevant company also employs blue-collar workers who already enjoy an industry-level pension plan.

Companies which do not employ blue-collar workers affiliated to an industry-level pension plan (i.e. most companies)

In these companies, wages are to increase by the full 1.1% as from 1 September 2019

The increase will not apply to any white-collar employee who, in accordance with an agreement at a company level has received (or will receive) an alternative effective wage increase above and beyond any automatic salary increase based on seniority and/or experience and/or an equivalent increase in purchasing power, such as the introduction of meal vouchers or an increase in the employer’s contribution thereto.

Assume for example that your company applies a group-wide merit increase in October each year. The 1.1% may be incorporated into this merit increase, but all employees should receive at least that minimum 1.1% increase.

The alternative company arrangement requires an agreement with the union delegation to be in place at the latest around salary pay-out in September 2019. If there is no union delegation within the company, the employer must inform each individual employee in writing by the same time.

Companies which do employ blue-collar workers affiliated to an industry-level pension plan

Over the last years, significant steps have been taken in Belgium to reduce the difference in treatment between blue-collar and white collar workers. The work-place pension is one of the last remaining areas of distinction. By 2025, all Belgian pension schemes are to be neutral in this respect (with some important grandfathering allowed to phase out).

Companies which also employ blue-collar workers who are affiliated to an industry-level scheme which is more beneficial than the scheme for the white-collar workers of the company, are required to pay the 1.1% as a special annual payment (i.e. bonus rather than pay increase). As of 2025, the special payment is to be paid in an industry or company level pension scheme.

In conclusion

There is still quite some uncertainty about the computation of the special annual payment, but most likely your company will not be in scope. If it is, do not hesitate to reach out in time to consider your options fully. The same goes if you want to convert the 1.1% salary increase into an alternative benefit. You will have to act quickly, as September is only a few summer festivals away ….