Holiday season is coming up and apart from enjoying family life and undertaking interesting ventures, surprises from the Belgian legal landscape are on the horizon.

The entitlement to take time off and to be paid during a holiday period is fundamental to any employment law system. In highly developed systems, such as the Belgian one, holiday legislation has become one of the most complex subjects in our employment law.

Many Belgians do not fully understand the rules and foreign employees, moving to Belgium to take up employment  here, tend to live in happy ignorance until they are suddenly faced with one of the pitfalls of the system.

One of the main reasons why holiday pay is complex in Belgium is due to the fact that holiday rules extend beyond the period of a calendar year. Contrary to most countries, where holiday pay is accrued and also paid out during the same year, in Belgium there are always two time periods involved. The first period is the year during which professional services are performed (the service year) and the second period is the year during which holiday is taken and holiday pay is actually paid out (the holiday year).

If you are already working a number of years in Belgium for the same employer, these rules are mostly invisible because each year you can take up full holiday entitlements and also receive a full holiday bonus.

The surprises will occur when your employment is not on ‘cruising speed’, more specifically when following events occur: beginning of employment, a career break,  changing employment, leaving Belgium, changing social status (for example from self employed to employee). In some cases, you may have to start a new service year, which implies that you have to wait until….. the next year before you an take any time off and to start collecting the first holiday benefits.

Only after a full calendar year of continuous employment in Belgium, full entitlements will have been accrued. For many expatriates, this is a nasty surprise when they start working in Belgium.

It is quite obvious that this system leads to an unreasonable and unfair situation at the beginning of a Belgian career. This has been noticed by European authorities and Belgium is now forced to adjust its legislation to ensure that everyone can start taking up paid leave within a reasonable period of time.

Unfortunately, in the new system, the basic cause of the problem (the distinction between the service year and the holiday year) is not resolved. This implies that yet again the Belgian legal system will become even more complex, both for the employee to understand and for the employer to manage and administer.

Minimum holiday entitlements (paid leave) would be accrued on a quarterly base at the rate of one week of paid leave per quarter of professional activity. The benefit of the system is that the employee can already start taking time off by the end of his first quarter of employment.

The down side of the new system is the fact that the holiday pay, paid in this way during the first Belgian service year, will still need to be accounted for in the second year of employment (the holiday year), where it will be credited against certain payments, to which one is entitled in the second year. In addition, in the first year holiday payments are not yet at full cruising speed since the holiday bonus is not immediately paid out. Full holiday pay entitlements will only be paid out after a full calendar year of Belgian service was performed and when all accounting (between service year and holiday year) has been done.

All of this means that an expatriate, who works during 2 years in Belgium, and who does not start working on January 1 of the first year, will never reach “holiday pay cruising speed” and is likely never to be able to fully understand the various pay solutions his employer is going to (be forced to) come up with during the assignment.

Jan Lambrechts, ICHIBAN Consult