The wage norm is a percentage that expresses the maximum wage cost change over a period of two years, based on the wage cost change in Germany, France and the Netherlands. Limiting the wage cost increase protects Belgium's competitive position compared to our neighbouring countries.
This wage norm is generally set by the social partners every two years. However, following the repeated failure of the negotiations with the social partners, and after a mediation proposal by the government did not result in an agreement, the initiative passed once again to the government.
The latter announced a pay freeze for the period 2013-2014. For a long time it remained unclear how exactly this was going to be implemented.
On 29 March 2013, the Council of Ministers finally approved the Royal Decree in which the wage norm for 2013-2014 was indeed set at 0%.
The Royal Decree was published in the Belgian Official Gazette on 2 May 2013, but contains little new information.
To date, nothing is known about any new sanctions in the event of non-compliance with the pay freeze. The government had indicated that it was going to fine-tune the legal basis of the Royal Decree itself, meaning the Act of 26 July 1996. However, for the time being, an amendment to the Act is not being considered. We will certainly let you know if that is going to happen.
0% margin for 2013-2014
Whereas a maximum wage cost change of 0.3% was possible for 2011-2012, no margin at all applies to the period 2013-2014. After all, the wage norm was set at 0%, meaning that the wages have, in effect, been frozen.
As a consequence, conventional wage increases are essentially not possible for either 2013 or 2014. You are therefore not permitted simply to increase employee benefits or allocate new (extra statutory) premiums or benefits (e.g. a company car, mobile phone, meal vouchers, etc.).
However, this does not mean the complete impossibility of all wage increases. First and foremost the pay freeze concerns the average wage cost within a company. Individual wage increases continue to be possible in principle, as long as the average wage cost does not increase. In practice, however, this will be very difficult given the zero margin. An individual wage increase will only be possible if the wage cost is reduced elsewhere.
As usual the Royal Decree also confirms that wage increases as a consequence of indexation and scaled increases (a wage increase or allocation of benefits following a job change in accordance with existing scales) can (must) still be applied.
In addition, nothing has yet changed as regards the exclusion of a number of wage benefits, such as an increase in the employer contributions and premiums in sectoral social pension systems.
Sanctions
Non-compliance with the wage norm can result in an administrative fine of between EUR 250 and EUR 5,000.
In addition, a court can declare a wage increase agreement null and void.
However, there was little or no check on compliance with the wage norm during the period 2011-2012.
Although the government appeared to suggest that firmer action would be taken, no legal amendment in that sense is being considered as yet.
It continues to be difficult to predict whether, and to what extent, the inspectorate will act (and impose sanctions).
Effect over time
In principle, the wage norm applies to the entire period from 2013 to 2014.
However, the Council of State resisted a retroactive implementation of the Royal Decree until 1 January 2013, as a result of which the date on which it comes into effect was set as being the date of publication, namely 2 May 2013.
At the moment no-one can tell how the effect over time will be interpreted.
Although it is clearly not the intention to make the Royal Decree retroactive, one cannot exclude the possibility of a debate taking place about wage increases which have been allocated this year during the period before 2 May 2013.
