Belgium is an asset to Europe, known for its flourishing tech businesses and supportive geographic location that contributes to an extensive network, best suited for transportation. Thus, leading to a robust economy, with brimming business opportunities for companies to establish their global presence.
Belgium has intricately designed employment laws, employee benefits and payroll policies. Being compliant with them is of paramount importance, hence functioning accordingly is mandatory. If you are planning to expand your business in an economic hotspot like Belgium, then understanding their payroll, employment laws is foremost. In this blog we will be covering everything that you must know about payroll cycle and employee benefits in Belgium.
The Payroll Cycle in Belgium
Employment Contracts
Employment contract is the foundational aspect of employee and employer’s work relationship in Belgium. While the law does not require specific clauses, yet it does mandate the legal conditions and joint agreement that is included in the contract.
The standard type of employment contract that is followed in Belgium is either open ended or indefinite contract. Although fixed terms contracts are permissible, they must be formalized in writing before commencement of employment. Lack of adherence in such cases might lead to a fixed term contract that will be treated as indefinite. Besides, if two fixed terms are signed in adjacent then the contract is automatically considered indefinite, until there are exceptions involved:
Case 1: The contract can be signed in a series of up to four contracts of at least three months in a continuation, if the combined length of the contract does not exceed more than three years.
Case 2: Contracts of six months can be signed in continuation; this also remains constrained to three years. However, these cases need approval from the labor inspectorate.
Case 3: The series of fixed-term contracts can be signed without breaks only if the employer justifies it based on the type of work, example: Seasonal jobs.
Notably, the employee and the employer have all the rights to terminate the fixed term contract, this can be done under a “serious situation” only. If no such situation participates in the termination of the contract, then defined rules are followed:
- In the first half of the employment, that is, within the period of six months, either party can terminate the employment contract with the notice provided.
- If in the second half, the employment contract is terminated by either party then they must pay compensation to the other party equal to the salary until the contract’s end date.
Salary Payment
The employment laws in Belgium allows employers and employees to negotiate salaries under which both parties come to a collective agreement that sets the minimum pay standards for various sectors. The salaries are usually paid on a monthly basis. This payment processing is usually governed based on the company's regulations. Employers must pay salaries in Euros, usually through bank transfers or checks, making sure that employees receive their payment on time, usually within four working days after the pay period
Working Hours and Overtime
The work arrangement for employees in Belgium is maximum 38 hours per week with the daily limit of eight hours a day. Although there are exceptional cases such as flexible working arrangements or seasonal work, under these settings the employee must cover 48 hours.
Overtime is not an encouraged practice in Belgium. However, if permitted the employees are entitled to an additional 50% pay extra for weekdays and 100% for weekends and holidays.
Paid Time Off (PTO)
The employee leave system in Belgium allows them to take four weeks of paid holidays annually. With a settlement between employee and employer a negotiation of at least two weeks of uninterrupted leave from May to October can be taken. During this period the employee receives both standard and double pay. Double pay is 92% of their gross salary which is typically paid in the month of May.
Under certain circumstances like illness, maternity or any other conditions the employee does not take the leaves, then the leaves can get carried forward up to 2 years.
Sick Leave
Employees can take sick leave when they are undergoing any health-related concerns. White collar employees who have been a part of the organization receive 100% of their salary for the first thirty days. This eventually reduces to 60% for the first year and rises to 65% for the second year.
To avail the sick leave, one has to submit the medical certificate except for the first day of absence.
Compassionate Leaves
These kinds of leaves are often taken to attend a special event like marriage, or misfortunate occasion like funeral or support and comfort a family member who is sick. This leaves can last from a few days to month based on the seriousness of the situation. Compassionate leave is usually unpaid ones, yet only the employees who have been with the organization for over 24 months can access long term leave. This is due to “time credit” scheme.
The compassionate leaves classify further as:
Imperative Reason Leave: Under this category, the employees can take time off up to 10 days on account of marriage, childbirth, funeral and other such reasons.
Leave to Care: Under this, the employees can take time off to support their family members during illness, this can be full time leave up to 6 months or part time leave up to 12 months.
Palliative Care: Under this, an employee can access one month of full-time leave or part-time with reduced hours.
Fostering Leave: Fostering leave allows employees to take six days off annually.
Educational Leave: Under this, the employees can take time off for their course or examinations based on which course they are pursuing or in which region it is pursued.
Maternity/Paternity/Parental or Adoption Leave
Maternity Leave:
The provision for maternity leave is simple and convenient in Belgium. One can opt for maternity leave a week prior to the child’s birth to nine weeks after. Five more weeks can be added before or after birth based on the mother’s health and conditions. Two weeks extra is granted to the mother who has delivered multiple babies.
If the baby has a health condition or has been hospitalized for more than 7 days, then the maternity leave is usually extended to 24 weeks. During this period, the employment contract is paused. The employee receives social security benefits of 82% of normal earnings for an initial span of 30 days and 75% for the rest of the pay.
Paternity Leave:
Paternity leaves in Belgium are accessible to new fathers within first 4 month of the childbirth. They can take 20-day leave, out of which the first three days are paid by the employer and the rest 17 days based on benefits provided by the public health insurer.
Parental Leave:
An employee can take paternal leave for up to 4 months. It can be together or for shorter period based on the need. One can take parental leave only when he/she has been working with the employer for at least 12 months. Notably, employee contracts are paused during the leave period, and he/she does not receive any salary during that time but has access to the employee benefits.
Adoption Leave:
Adoptive parents are provided with six weeks’ leave per parent. This can extend to two weeks if more than one child is adopted. One must take the adoption leave in continuity.
Other Leaves
Training Leave:
Training leaves in Belgium is divided along with the count, if the company has 20 or more employees, then one gets 5 days off for training while if the employee strength varies between 10 to 19 employees, then they are entitled to one day off. For companies who have less than 10 employees, they are usually not provided with any leverage training leave whatsoever.
Carer’s Leave:
Employees can take up to five days of unpaid leave under conditions such as serious health conditions of a family member. The days can extend up to 10 under compelling circumstances.
Employee Benefits in Belgium
Statutory Benefits
This system covers a wide range of benefits, including:
Employers and employees make monthly contributions to the social security fund. This fund is then used to pay benefits such as:
- Sickness and disability allowances
- Unemployment benefits
- Incapacity allowances
- Insurance in the event of accidents at work and industrial disease
- Family allowances
- Old age and survivors' pensions allowances
Additional Employee Benefits
In addition to statutory benefits, many employers in Belgium offer additional perks to attract and retain talent:
The following benefits are often granted to Belgian employees:
- Collective bonus such as profit sharing
- Company car or company bicycle
- Computer, smartphone, internet connection
- Commuter travel subsidy
- Meal vouchers
- Eco-vouchers (compulsory in some labor agreements)
Conclusion
Navigating through the payroll cycle and understanding employment and employee benefits in Belgium can be intimidating. Although this system is closely designed to ensure fair treatment and compensation to the employees. By recognizing the structure of employment contracts, payroll processing, work hour, leave management and other, employers can engage themselves and can gain fundamental understanding of the subject matter of the Belgium market.
One can get help from global expansion service providers like TopSource Worldwide that can help in dealing with global expansion concerns like payroll processing, global hiring or others. TopSource has been a part of the industry for two decades delivering top-notch global expansion services like EOR, Entity Solutions, HR advisory, and Payroll. So, if you are looking for global growth, consider contacting us!
