Do you give a wage increase or an equivalent advantage? (Sector agreements 2017-2018)

The trade unions and employers reached an inter-professional agreement (IPA) or wage agreement for 2017-2018 at the beginning of this year. This agreement provides for an increase in gross wages in the private sector of up to 1.1% on top of indexation. In concrete terms this means that wages will rise by some 4%: 1.1% as a result of wage increases and 2.9% as a result of indexations that compensate for inflation. The Group of Ten wants to improve Belgium's competitive position regarding neighbouring countries, but still increase its purchasing power so that domestic consumption can increase. The federal government decided to implement the agreement in full.

Negotiations at sector level are currently ongoing. The inter-professional agreement sets out the general boundaries, but each sector is free to interpret the agreement in its own way. You are not obliged to allocate the full amount to your employees. You can choose not to pay the wage increase in cash, but to grant an equivalent advantage. These benefits are fiscally more attractive for your employees. Examples include meal vouchers, extra leave, eco-cheques, a cafeteria plan or the possibility of converting the extra pay into an increase in group insurance to build up a supplementary pension.

For example, the social partners on the supplementary joint committee for clerical staff (PC 200) concluded a sector agreement for 2017-2018 in June. From 1 October, wages in this sector will be increased by 1.1%. Employers in this sector had, however, until 30 September to agree on another equivalent increase in purchasing power with the trade union delegation. If there is no trade union delegation, the employer is free to choose, but employees must be informed.

As insurance architects, we think along with you about alternative options for increasing wages. We are happy to help you develop an equivalent advantage. Get in touch for an enlightening conversation.