This article discusses the institutional framework for collective bargaining on minimum wages in Belgium, how minimum wages are set and their levels, changes to minimum wages and exemptions under law. While an uprating of the national minimum wage was implemented in 2022 and further increases are planned, the collective agreement implementing the increase relies on compensation from the state through reductions in social security contributions to ensure that real wage increases are not fully reflected in increased wage costs.
Institutional framework
In Belgium, there is no law mandating minimum wages. Rather, a legal framework for collective bargaining was established by the Act on collective bargaining agreements and joint committees (5 December 1968), providing for collective bargaining on the cross-sectoral national minimum wage and on sectoral wage floors. Because of the scope of the national minimum wage, Eurofound nonetheless considers it a statutory minimum wage.
If sectoral agreements are compliant with certain requirements relating to their form (for example, date and scope), not their content, they are legally extended to all organisations and employees in the sector, whether affiliated to signing parties or not, by the Federal Public Service Employment, Work and Social Dialogue.
Negotiations on the national minimum wage occur in the National Labour Council, while sectoral wage schemes are negotiated in around 100 joint committees. National collective agreements are numbered 1 to 164 (in April 2023) and can be downloaded from the council’s website. Sectoral collective agreements can be retrieved from a database provided by the Federal Public Service Employment, Work and Social Dialogue.
Two other acts complete the framework for collective bargaining. First, the Act on the preservation of the wages of employees (2 April 1965) defines wages as a predictable income from labour that is to be paid in money, thus prohibiting (minimum) wage payouts in kind or salary deductions. Second, the Act on the promotion of employment and the preventive preservation of competitiveness (of 26 July 1996, revised in 2017), which imposes an upper limit on real wage increases (known as the ‘wage norm’) which is in principle also applied to minimum wages.
The De Croo government (formed on 1 October 2020) has chosen to retain the Wage Norm Act, despite debates over its economic rationale and efficacy and concerns on the part of trade unions about its implications for wage setting and reduced social security contributions. Beyond the wage norm, the level of which is decided at the start of a two-year bargaining cycle, no fixed procedures exist for determining wage levels.
How minimum wages are determined
The national minimum wage in Belgium is known as the ‘guaranteed average monthly minimum income’ (Gewaarborgd gemiddeld minimummaandinkomen) and is outlined in the collective bargaining agreement no. 43. It applies to private sector employees over the age of 18 with an employment contract.
The national minimum wage is calculated as the average of all labour income over one year and expressed as a monthly income. This means that pay in one month may fall below the national minimum wage if it is offset by compensation in other months or through other payouts such as task-based or year-end bonuses.
The national minimum wage is indexed using the ‘pivot mechanism’, whereby the minimum wage is adjusted when the health index – a price index that excludes alcohol, tobacco and motor fuel – rises above 2%.
For part-time workers, the national minimum wage is applied proportionally, in accordance with collective bargaining agreement no. 35.
In contrast, sectoral minimum wages are determined by the basic monthly or hourly rates outlined in the sectoral agreement and do not take into account other types of labour income (such as bonuses). They are generally, but not necessarily, also tied to the health index, being revised either on set intervals or through the pivot mechanism.
The EU Directive on Adequate Minimum Wages stipulates reference values to be used in setting minimum wages and procedures for ascertaining them, which may affect the determination of minimum wages in Belgium in the future.
Updates to the national minimum wage
Since the last indexation in December 2022, the national minimum wage in Belgium has stood at €1,954.99 per month, or an equivalent hourly rate, depending on the number of weekly working hours and assuming an average of 4.33 weeks per month:
- 38 hours: €11.87 per hour
- 39 hours: €11.57 per hour
- 40 hours: €11.29 per hour
Other than changes arising from indexation, (real) increases in the national minimum wage are irregular. There was a gap of 14 years between the real upratings in 2008 and 2022. The latest increase was part of a series of three planned for 2022, 2024 and 2026, as set out in the collective bargaining agreement no. 43/15 of 15 July 2021. Employers have been promised compensation in the event that the wage norm is exceeded when the two future upratings take place. The 2022 increase amounted to €76.28 (€80.95 after indexation); the same agreement removed seniority levels of workers under the age of 21 to be taken into account in calculating their minimum wages (collective bargaining agreement no. 43/16 of 9 March 2022; see the section ‘Minimum wages for young workers’ below). The planned increases in 2024 and 2026 will amount to an increase of €35. This is discussed in Eurofound’s 2022 annual minimum wage review.
Tax reforms should increase minimum incomes by another €15. In addition, to facilitate the implementation of collective bargaining agreements, the state compensated employers for the increase in wage costs incurred by the 2022 minimum wage increase by lowering employers’ social security contributions for the workers affected. The Council of Ministers of 20 July 2021 added a ‘very low wage component’ to the structural deductions that can be made from social security contributions.
Another real minimum wage increase is proposed for 2028, depending on minimum wage developments in neighbouring countries and the expected further compensation for employers.
The national minimum wage in Belgium, despite being among the highest in the EU in absolute terms, is relatively low in comparison with the median and average wages. Eurostat figures based on wage data from the Structure of Earnings Survey indicate that the national minimum wage was 42.4% of the average wage in Belgium in 2020 (Eurostat [earn_mw_avgr2]). The Institute of Economic and Social Welfare found that, for full-time workers, the national minimum wage was 46.6% of the average wage in 2019, based on data from the Organisation for Economic Co-operation and Development.
This is, on the one hand, because of comparatively high median and average wages and, on the other, because the national minimum wage typically lags behind sectoral wage trends and levels. Moreover, according to calculations by the Central Economic Council, only about 3% of workers receive the national minimum wage or a similar wage, meaning that their sector has no higher wage floor. A similar figure of under 3%, disaggregated by gender, is reported in Eurofound’s 2020 annual minimum wage review.
Sectoral minimum wages vary depending on the pay structure of the sector. On average, however, these wages are 19% above the national minimum wage. In some cases (for instance, in the case of the wage set by Joint Committee No. 201, representing independent retailers), the sectoral minimum wage is below the national minimum wage, and should therefore be complemented by other payments from the employer, such as bonuses.
Minimum wages for young workers
In April 2015, age criteria for the national minimum wage, sectoral minimum wages and seniority schemes (automatic pay increases over time) were largely abolished or replaced by experience criteria.
In April 2022, with the entry into force of the revised collective bargaining agreement no. 43/16 of 9 March 2022, the remaining age and experience criteria for workers under the age of 21 were finally abolished, and the full minimum wage was set at the rate that had formerly been for workers aged at least 20 and with 12 months of experience. In other words, workers with a regular employment contract aged 18 or over became entitled to 100% of the national minimum wage.
Still, in some situations, different minimum wages apply to young workers, depending on their age and job category. In the absence of sectoral agreements on minimum wages for workers under the age of 21, national minimum wages for young workers under the age of 18 or for workers with a student contract, as stipulated by collective bargaining agreement no. 50/4, are as follows:
- 16 years old: 67% of the national minimum wage
- 17 years old: 73% of the national minimum wage
- 18 years old: 79% of the national minimum wage
- 19 years old: 85% of the national minimum wage
- 20 years old: 90% of the national minimum wage
For students whose work is part of their training (referred to as ‘alternating learning’), and who do not have a labour contract, collective bargaining agreements no. 43 and 50 do not apply, so there is no minimum wage.
Exemptions
In addition to some young workers, the minimum wage rate does not apply to the following groups.
- People employed in a family business managed only by a parent are exempt (collective bargaining agreement no. 43).
- Workers who usually work for less than a month per year for the same employer are exempt (collective bargaining agreement no. 43).
- Workers involved in the starter-jobs scheme for workers over the age of 18 but under the age of 21 with little work experience are exempt. The gross wage is reduced to cut the cost of labour and (fully) compensated by a net amount on which no employer contributions are due.
- Workers employed in the public sector are exempt (Act on collective bargaining agreements and joint committees), although in practice pay in the public sector is always above the national minimum wage for the private sector.
- Workers in ‘flexi-jobs’ – secondary jobs for workers who are already working at least four-fifths of the hours of a regular contract, and which are not subject to sectoral wage floors – are exempt. The pay rate in this case is determined by law, but sectoral agreements can increase the minimum wage for flexi-jobs. As of April 2023, the minimum hourly rate was €10.97, which is below the national minimum wage.
- A growing segment of the workforce is employed as freelancers/platform workers in potentially bogus self-employed work, such as delivery and taxi services. If, after inspection, fewer than three out of eight criteria for suspicion of an employment relationship are met, the national minimum wage does not apply.
- Neighbourhood jobs (wijkwerken) support long-term unemployed workers’ re-entry into the labour market through small jobs in their local area. Workers participating in this scheme are not covered by the national minimum wage.
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