1 Sick during annual leave
From 2024: leave days are in principle retained in case of illness during holiday.
Until 31 December 2023, if an employee fell ill during their annual leave, the employment contract remained suspended on the ground of the annual leave. This was because of the rule that the "first ground for suspension prevails". As a result, the employee lost the holidays during which they were sick.
However, this rule was contrary to the European Working Time Directive (2003/88/EC), which provides that all workers are entitled to annual leave – with pay – of at least four weeks. Taking this into account, the European Court of Justice previously ruled that an employee was entitled to take their holidays later if they became ill during a period of paid leave.
The Act of 17 July 2023 amending the Employment Contracts Act and the Work Rules Act brings our Belgian regulations into line with the above-mentioned European case-law and the Working Time Directive.
Indeed, from holiday year 2024 (holiday service year 2023), an employee who falls ill during their annual leave days will no longer lose these holidays and the suspension of the employment contract due to holidays will be converted into a suspension of the employment contract due to illness. However, this is on condition that the employee:
− immediately notifies the employer that they are ill;
− communicates to the employer their current residential address if it differs from the address known by the employer;
− submits a medical certificate to the employer within two working days (unless force majeure or otherwise stipulated in a collective agreement or in the work rules). The exemption not to submit a medical certificate up to three times per calendar year before the first day of illness does not apply here.
The medical certificate must contain the following entries:
o the incapacity for work;
o the probable duration of the incapacity for work;
o whether or not the employee is allowed to move around.
The Royal Decree of 22 December 2023 provides for a specific model of medical certificate for illness occurring during a period of annual leave, but the use of such a certificate is optional.
If the employee wishes to take the unused leave days contiguous to the period of illness, they must notify the employer at the latest at the time they submit the medical certificate to the employer.
2 New formulas regarding the calculation of the mobility budget as of 1 January 2024
Thanks to the mobility budget, employers can offer their employees the opportunity to exchange their company car for a mobility budget that they can spend on alternative mobility solutions spread across various pillars. Any remaining balance will be paid out in cash in a (para)fiscally attractive manner.
The amount of the mobility budget is equal to the actual annual gross costs of the company car for the employer, or the "TCO" (Total Cost of Ownership). From 2024: leave days are in principle retained in case of illness during holiday.
To streamline the determination of the mobility budget, the government has recently established formulas for calculating its amount.
Specifically, as of 1 January 2024, employers will have to choose between two methods to calculate the TCO: based either on the actual value or on fixed values.
These new formulas will be used both to calculate the amount of the mobility budget and to calculate the costs of the eco-friendly company car chosen within the framework of the first pillar.
If the employer opts for the formula based on the actual value, the calculation must be based on an exhaustive list of expenses (representing the average expenses over the last four years of the (reference) vehicle that employees give up). No additional expenses may be considered.
If the employer chooses the fixed valuation, the fixed formula consists of both a fixed and a variable component.
Regarding the fixed component, a distinction must be made depending on whether the vehicle is leased or purchased by the employer:
− For a leased car, the mobility budget takes into account the following elements: the annual cost of the leasing contract, the average annual cost of all expenses not included in the leasing contract (provided they are included in the company car policy), the non-deductible VAT, the tax on non-deductible car expenses, and the CO2 contribution.
− For a company-owned vehicle (or a vehicle leased with a financing contract), the mobility budget takes into account the following elements: 25% of the catalogue price of the vehicle (including tax on the non-deductible part of this catalogue price) and the CO2 contribution.
The variable component is determined as follows: (6,000 + commuting distance x 2 x 200) x 30% of the mileage allowance granted to civil servants (currently EUR 0.4269/km).
As for determining the mobility budget to be allocated, it is still possible to determine the amount of the mobility budget based on a reference vehicle (e.g., per job category).
For completeness, it is noted that the new rules exhibit certain (fundamental) inconsistencies.
Employers are therefore encouraged to quickly adjust their mobility budget policies in view of the introduction of these new rules as of 1 January 2024.
3 Exemption from withholding tax for shifts and night work: action points for 2024
As of 1 April 2024, the shift or night premium must be provided for in a work rules, in a collective bargaining agreement, or in the employment contract.
Companies where shift or night work is performed and for which a shift premium is paid may benefit from a partial exemption from the remittance of withholding tax. Although withholding tax must be deducted from the salary paid by the employer to the employee, the employer is exempt from paying to the treasury an amount of withholding tax corresponding to 22.8% of the total taxable salary of all shift or night workers (excluding double holiday pay, end-of-year premium, and arrears). However, the application of this exemption is currently being closely monitored.
The Law of 28 March 2022 regarding the reduction of labour costs made several changes to the scope of the partial exemption from the remittance of withholding tax for shift and night work. The intention was to end the legal uncertainty resulting from difficulties in interpreting certain conditions for the application of this exemption.
While in the past the definitions of shift work and shift premium were separate, from now on, in order to speak of shift work, a shift premium must be granted for each hour worked in a shift.
To prevent the awarding of a merely "symbolic" supplement solely for the purpose of qualifying for the exemption, the shift premium must now necessarily result in an increase of at least 2% in the salary paid to the employee for each hour worked in a shift. The night premium, meanwhile, must result in an increase of at least 12% in the salary granted to the employee for an hour worked at night.
Furthermore, the shift or night premium must be provided for in work rules, in a collective bargaining agreement, or in the employment contract as of 1 April 2024.
To the extent that this has not yet been done, we strongly recommend addressing this matter promptly.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
