Newsletter 2024 – 02

March 1, 2024

1 Office news

Mr. Yves Thiery will provide commentary and critical analysis on the judgment of the Antwerp Labour Court of 13 December 2023 during the Current Affairs Lecture of the KU Leuven Pension Law Course on Tuesday , 5 March 2024. The court ruled that a two-year limitation of coverage in a collective disability insurance policy, which applies only to insured persons with mental disorders and not to those with physical disorders, does not meet the discrimination test. You can find more information and register here

2 Rush Hour HR – March 12, 2024 – canceled

Unfortunately, we have to inform you that Spitsuur HR, scheduled for March 12, 2024, has been canceled. We'll let you know as soon as a new date is announced.

3 Social inspector Franz Kafka

First fact. There are approximately 600,000 company cars on the road in Belgium. The employer pays a "solidarity contribution" to the National Social Security Office (NSSO) on this benefit in kind, which is calculated based on CO2 emissions. The employee pays a tax that takes into account factors such as the list price and CO2 emissions.

Second fact. The employer is obligated to pay their employee at least the wage established in sectoral collective bargaining agreements. Some sectoral collective bargaining agreements do not specify which wage elements must be taken into account, while others, including those in the liberal professions sector (article 336), do. In those cases, the collective bargaining agreement stipulates that all wage elements are taken into account, including benefits in kind. If the sum of the cash wage and the wage in the form of the benefit in kind reaches or exceeds the minimum wage, the employer complies with the sectoral collective bargaining agreement regarding the minimum wage.

If the minimum wage is hypothetically €2,000 and the employee receives a cash salary of €1,950 plus the private use of a company car, an employer may conclude that he is paying more than the minimum wage.

Not so, according to the social inspectorate. The benefit of private use of a company car is not included in the exhaustive list of benefits in kind that the employer may grant. See Article 6, § 2 of the Wage Protection Act of April 12, 1965. Therefore, the benefit does not count towards the minimum wage..

The inspector asks the employer to "correct" the wages. This leads to the absurd situation of having to increase the gross wage in cash for an employee who already receives a benefit for which they don't have to pay social security contributions and for which they pay a rather symbolic tax. For a (diesel) car worth €30,000, they will be taxed at a maximum of €200 per month. Just think: if that employee drives 2,000 km per month privately (including commuting), they've already spent that €200 on fuel alone.

In 2014, the Constitutional Court recognized that the legislature had developed a contribution scheme that was particularly advantageous for company vehicles compared to the social security contributions due on other benefits in kind granted to employees (Constitutional Court, July 17, 2014). The Court did not raise the concern that this constituted an illegal advantage.

In 2016, in Fundamental Rights and Social Security, I already wrote that this indirectly discriminates against certain groups of employees, including women and workers.

And by the way, can the legislator on the one hand – in the Wage Protection Act – indirectly prohibit the granting of a certain benefit in kind and on the other hand not only tolerate that same benefit but also regulate it separately – and very favorably for both employer and employee – in terms of social security contributions and taxes?

Ludo Vermeulen, Partner lawyer
ludo.vermeulen@mploy.be

4 High and low wages according to the university (Knack February 7, 2024)

In the weekly magazine we read: “Anyone who switches from a minimum unemployment benefit to a full-time job with a low gross monthly salary of 2,854 euros has much more money to live on.”

A “low gross monthly salary of 2,854 euros”?

In support of this statement, reference is made to a study by the Expertise Centre for Budget and Financial Well-being at Thomas More University of Applied Sciences.

Just looked at that report. It indeed bases an entire analysis and several conclusions on the premise that an unemployed person receiving a minimum benefit (who has been unemployed for a considerable period, otherwise they wouldn't be receiving that minimum benefit) "switches" to a new job and immediately earns a (low!) monthly salary of €2,854. About 25% of employees don't earn that much (see Statbel). Class B employees in the supplementary joint committee don't even reach that amount by the end of their careers (see www.sfonds200.be).

Wouldn't it be more realistic to use, for example, the salary of a cleaner in a service voucher company as a point of comparison? Their hourly wage is €13.36. That translates to a monthly salary of €2,199.95. A regular nurse in a nursing home starts at €2,608.13. A care assistant at €2,455.11. They reach the "low gross monthly salary" after 10 years of service.

A bit more in-depth. The researchers derive the concept and measurement of a "low gross wage" from the OECD. It refers to the wage that is one-third lower than the median gross wage. This would then amount to €2,854 x 3/2 = €4,281. The report cites Statbel data, which lists a median wage of €3,507 for 2021. The "low wage" in 2021 was therefore €2,338. The researchers index that amount to 2023. Using their method, this yields a figure of €3,995. The low gross wage according to OECD standards would then be €2,663.33. It remains unclear where the figure of €2,854 as the level of a "low wage" comes from.

According to the Expertise Center's study, approximately 14% of employees earn a salary lower than two-thirds of the median wage. The latest Statbel report shows that this figure is around 25%. In any case, a study on whether work pays, based on a transition from a minimum unemployment benefit to a full-time salary of €2,854, may be academically interesting, but it certainly doesn't provide a realistic picture of reality.

Wouldn't it be more interesting to know whether working at the bottom of the ladder in a nursing home or in a service voucher company is actually worthwhile?

Last year, the median wage according to SD Worx was €3,300. A low wage according to OECD standards is €2,200. That's much more realistic. There are several factors that could explain the discrepancy between the Statbel data and the SD Worx data. Statbel is based on a survey of employees, and there will always be some noise in what employees say about their wages. SD Worx uses the exact wage data. Statbel only surveyed employees who work for an employer with at least 10 employees and excludes several sectors from the study, including public administration, education, and healthcare.

In any case, scientific research and its results should always be critically examined, especially when they are intended to support policy.