Wage moderation

03 May 2019

The Royal Decree providing the new remuneration margin has been published

On Wednesday 24 April 2019, the Royal Decree establishing the margin for labour costs for 2019 and 2020 was published in the Belgian State Gazette. The Royal Decree entered into force on the same day.

The maximum margin for the evolution of labour costs for the period 2019-2020 is fixed at 1.1%. In other words, this (bi-annual) percentage covers a two-year period.

In the absence of an agreement between the social partners, the margin for labour costs had to be fixed by Royal Decree. It is worth mentioning that the draft of the interprofessional agreement did already fix a margin for labour costs for 2019-2020 at 1.1%. However, as not all trade unions approved this agreement, the intervention of the government was required. Furthermore, the government’s attempt to reconcile the social partners was in vain. Therefore, the government took charge of fixing the maximum margin for the evolution of labour costs by means of a Royal Decree. The report of the Central Business Council was taken into account whilst drafting the Royal Decree.

The fixed margin of 1.1% cannot be exceeded by agreements concluded at (intra)sectoral, company or individual level. Nonetheless, indexations and scale increases are guaranteed.

Non-compliance can be sanctioned with an administrative fine of between EUR 250 and EUR 5,000. This sanction is to be multiplied by the number of employees concerned, with a maximum of 100 employees.

> Action point
Take into account the margin for labour costs and do not conclude agreements which would exceed this margin. It is highly recommended to wait for the sectoral agreements in order to verify if there is still a margin left enabling negotiations at company level.