Wage moderation 2015 - As an employer, what extra payments can you still make to your employees?

The law of 26 July 1996 (law to promote employment and the safeguarding of competitiveness) (hereinafter the "1996 Law") introduced a system of wage moderation with the intention of aligning Belgian labour costs with those of our neighbouring countries, i.e. Germany, France and the Netherlands. Where in the past this wage norm was a directive, it became a zero norm from 2013. This zero norm is also continued in 2015.

What is the wage norm?

The 1996 Law establishes that the social partners (representatives of employers and employees) negotiate a wage norm each two years based on analyses of the evolution of labour costs. If they fail to reach an agreement on this, the federal government can impose a wage norm on companies; in the period 2013-2014, this norm was introduced by means of a Royal Decree (Royal Decree of 28 April 2014).

For 2015-2016, the federal government acknowledged that no agreement was possible between the social partners, and proceeded to set a wage norm. On 27 February 2015, the federal government decided once again to set the wage norm for 2015 and 2016 by Royal Decree. On 10 March 2015, the Council of State advised to no longer establish the wage norm by Royal Decree, but instead issue a separate law. The bill of law to introduce a maximum margin for labour cost developments for 2015 and 2016 was therefore submitted for review to Parliament and has in the meantime been voted. The law was published in the Belgian Official Gazette on 30 April 2015 and became effective as from that date.

How is the wage norm defined ?

Unlike in the past, a different wage norm applies for 2015 and 2016. For 2015, the maximum margin for the labour cost development is set at 0%, for 2016 at 0.5% of the gross payroll, total costs for the employer (all expenses included). In addition, in 2016 the maximum margin may be increased by 0.3% of the net payroll, without additional costs for the employer.

Who is affected?

The regulation applies to private sector employees. This regulation does not apply to directors or independent consultants.

The wage norm is an average

Compliance with the wage norm is not considered per employee, but for the company as a whole. To this end, the total salary cost is calculated taking into account the number of full-time equivalents (FTE), which results in an estimate of the average labour cost. Indexations and salary scale increases can still be made. Whether or not the norm is exceeded, will only be determined at the end of the year when a full picture of the labour cost developments can be established.

By using the concept of an average labour cost, an increase in the number of FTE's in a company does not necessarily immediately lead to an exceedance of the wage norm. Likewise a decrease in the number of FTEs does not necessarily create an additional margin for wage increases.

What precisely is meant by labour cost?

Unfortunately, the regulations regarding wage moderation do not include an exact description of the term labour cost. Some authors refer to a 1997 memorandum containing the guidelines for the interpretation of the 1996 Law, but the inspectorates have since started using updated guidelines, which unfortunately are not made public. In principle, all possible wage payments, premiums and commissions fall within the scope.

A few exceptions are expressly provided for in the law:

- Profit sharing as provided by law;
- Increase of the payroll due to hiring new personnel;
- Benefit payments in applying the law of 22 May 2001 concerning employee participation;
- Contributions to social supplementary pension systems;
- One-off innovation premiums.

However, this is a very limited list that must be considered to be outdated. Based on parliamentary questions and our own contacts with inspectorates, we take the view that at least two exceptions can be added to the list:

Payments in applying CBA [collective bargaining agreement] no. 90 (non-recurring result-linked benefits): due to the "uncertain" character of the granting;
Bonus systems or other variable remuneration systems linked to collective or individual goals (targets) at company level, provided that they already existed in the company before 2013, the last wage freeze period.

What if the average labour costs are exceeded?

The 1996 Law sanctions only the exceedance of the norm that is the result of "agreements" at inter-sectoral, sectoral, company or individual level. One could argue and defend on that basis that unilateral commitments or uses leading to salary increase are not prohibited.

What sanctions apply?

An exceedance leads to the nullification of the agreement that gave rise to the exceedance. In addition, an administrative fine may be imposed of €250 to €5,000 per violation and per employee.

Legal authors doubt, however, whether these sanctions will ever be imposed. The inspectorates have up till now not paid special attention to this matter, and we are not aware of targeted checks.

What's next?

The legislator is well aware that the current arsenal of sanctions is insufficient, and that as a result of this the coalition of the Michel government expressly provides in a tightening of the provisions of the 1996 Law. The governement speaks of an efficient monitoring of every Collective Bargaining Agreement that exceeds the wage norm, and an automatic correction mechanism if exceedances have been established.

During the parliamentary debates about the current wage norm, the competent Minister clarified that the changes to the 1996 Law were still on the agenda, but that this process could take a while.


The wage norm for 2015-2016 is a fact, and for 2015 there is even a wage freeze. However, this does not mean an employer is no longer permitted to pay anything extra to an employee. It does mean that he should have a check performed in order to prevent exceedance or sanctioning. Payments under existing bonus systems that existed before 2013 should, in principle, not pose a risk.