Modifications concerning activation contributions - Increase in rates and stricter conditions
As of 1 January 2024, the legislation regarding activation contributions, aimed at discouraging employers from fully exempting employees from benefits, has been tightened. The Program Act of 22 December 2023 significantly increased the rates and imposed stricter conditions. Notably, no transitional measures were introduced, applying the new conditions to both new and pre-existing cases of garden leave.
The Program Act of 22 December 2023, amended and tightened the legislation on activation contributions.
Increase in rates
Starting 1 January 2024, activation contributions will be increased as follows:
|
Age at start of exemption |
Percentage of salary in 2023 |
Percentage of salary in 2024 |
Quarterly minimum (EUR) |
|
< 60 years |
20% |
50% |
EUR 300 |
|
≥ 60 years < 62 years |
15% |
45% |
EUR 225.60 |
|
≥ 62 years |
10% |
40% |
EUR 225.60 |
Tightening of conditions
The requirement for an activation contribution, previously applicable when an employee has not delivered any performance for an entire quarter with the same employer, is expanded to encompass performance equivalent to less than one-third of the weekly working time of full-time employees in the same category within the company.
As a result, starting 1 January 2024, if an employee is employed for less than one third of a full-time work schedule in a calendar quarter, an activation contribution will be applicable.
Adjusting contribution reduction
In the previous regulatory framework, a 40% reduction in contributions applied when an employee had to participate in mandatory training organised by the employer for a minimum of 15 days over four consecutive quarters.
From 1 January 2024, this mandatory training will be replaced by the requirement to undergo outplacement guidance totalling 60 hours during the initial four quarters. This guidance is equivalent to 1/12th of the annual remuneration of the calendar year preceding the garden leave, with a minimum value of EUR 1,800 and a maximum value of EUR 5,500 and meets the specified legal quality criteria for outplacement.
Elimination of exemption
In the previous regulatory framework, an exemption applied if the employee had started new employment, accounting for at least one third of the weekly working time of a full-time equivalent, either with a new employer or in a self-employed capacity.
This exemption was removed and is no longer in effect. As a result, starting 1 January 2024, the activation contribution will be due even if the employee starts a new employment or a self-employment activity.
Entry into force
The Program Act does not provide transitional measures, meaning that the increased rates and stricter conditions will apply to both new and pre-existing garden leave starting from 1 January 2024. This stance has also been confirmed to us by the National Social Security Office.
Action point
Verify whether new or pre-existing garden leave are impacted by the new conditions. If the activation contribution is due, it should be indicated in the DmfA.