Labor Market Reforms in Belgium
One would be mistaken to believe these changes are somewhere ‘down the road’. In fact, many have already been enacted into legislation, including:
For 2012, the age and length of career required to qualify for early retirement will stay at 60 and 35 respectively.
However, as of January 1, 2013, these will gradually increase until, starting in 2016, they will be set at 62 years of age and 40 years of work.
- The so-called ‘bridge pension’ system, which is a combination of unemployment allowances and an allowance paid by the last employer until the employee turns 65, has been thoroughly reformed. Now, both the required age and the required minimum length of career will increase over the coming years. As of January 1, 2015, the ‘bridge pension’ (officially renamed ‘unemployment with company allowance’) will only be possible if the employee is at least 60 years old and has had a career of at least 40 years. Please note that for women, the new government included transitory measures, meaning the 40 year career will not be required until 2024.
- Access to ‘time credit’ (career interruption), which allows employees to temporarily reduce their working time in combination with an allowance paid by the Belgian state, has been made more difficult. The special time credit regime that existed for employees age 50 or older has been reformed into a regime for employees age 55 or older.
- There are also changes regarding the personal income tax, with one of the most important being the different evaluation of the private use of a company car. This will entail a tax increase for employees who benefit from a company car and an increase of the taxable base for companies granting company cars.
Among the intended measures that still await legislative action, the following require special attention:
- Intensification in the fight against so-called ‘false’ self-employment.
- Modernizing Belgian employment law, with the main issue being the harmonization of white- and blue-collar worker status. The Belgian Constitutional Court has given the government until mid-2013 to solve the issue.
- As the Belgian trade unions consider many of these measures unfair, 2012 looks to be a very interesting year – not only from a legal point of view, but also from an industrial-relations point of view.
Stay tuned…