In practice, the question which arises is how can a monetary value be assigned to this benefit?

The Council of Ministers has now decided to shelve this proposal indefinitely.

Though the issue of assessing the value of this benefit at a flat rate has now been put aside, as for the rest, there is no change.

As a result, except if the worker pays for the private use (for example, via a split billing), the principles remain unchanged, i.e., private use of a company mobile phone gives rise to  liability for social security and tax. . This advantage has to be assessed at its real value. The real value is determined in particular in function of the price of the telephone, of the value of the line rental and of the proportion of professional use.

However, in practice, in view of the obvious difficulties of assessment, it can be expected that the tax administration and the NOSS will continue to accept that this benefit is valued at between 12 and 15 EUR per month.

The alternative calculation method to determine the maximum amount of the seniority bonus exempted from social security contributions, as provided by the NSSO, is now also accepted by the tax administration. This means that the seniority premiums awarded from 1 January 2009, are also considered as exempted social advantages, when they are calculated on the average gross amount of a monthly salary in the company.

If the employer awards a seniority bonus the amount of which exceeds the maximum limit, then the employee will now only be taxed on the portion that exceeds the limit. The rest is exempted as a social advantage.

Finally the tax administration points out that the employer can't apply during one calendar year both the classical calculation method (on the basis of the gross salary of the employee concerned) and the aforementioned alternative calculation method. Should the employer do so, all seniority premiums that have been awarded during that year will be considered as a taxable advantage for the employees.

A first modification concerns the employees who suspend their work entirely or who switch to half-time employment in the framework of the general time credit regime. In order to be entitled to interruption benefits, these employees must from now on have a seniority of at least two years with their employer and this at the moment they notify in writing their intention to take time credit. 

A second modification concerns the special time credit regime for employees aged 50 or older. Employees who reduce their working time in the framework of this regime to a half-time regime or who reduce working time by 1/5th, will from now on be entitled to the "increased" interruption benefits only as from the age of 51. Between the age of 50 and 51, these employees receive the normal benefits as foreseen in the general time credit regime.

These new conditions will be applicable to time credit arrangements where the employee has communicated to his/her employer for the first time a written intention to take time credit after 1 March 2010. They do not apply to prolongations.

In some cases the premium will not be due, in particular in case of:

• dismissal during the probationary period;
• dismissal for serious cause;
• dismissal in view of pre-pension or pension;
• dismissal as part of a collective dismissal by which the worker can get registered in a re-employment cell.

In addition, employers are exempted from paying their part of the premium if, in 2010:

• special crisis measures were applied, or
• temporary unemployment was applied (and this during at least four weeks for blue-collar workers with less than 20 years of seniority and at least eight weeks for blue-collar workers with at least 20 years of seniority).

In both cases the National Employment Service pays the complete crisis premium.

In order to ensure that the dismissal is recognised by the National Employment Service, the Act provides the obligation for the employer to notify the dismissal to the employee by registered letter or by bailiff's writ. This applies also for dismissal without a term of notice and has as a consequence that, if the notification was transmitted by registered letter, the dismissal will only have effect on the third working day after its mailing.

A dismissal without such notification remains possible, but the employer will have to pay the complete crisis premium (thus 1.666 EUR instead of 555 EUR).

But the Belgian Supreme Court judged that the Labour Court of Luik, denied the right of the employer to determine himself, in case of a persistent/continuous misconduct/fault, at what moment in time this misconduct/fault makes the  professional cooperation definitively and immediately impossible - and consequently justifies a dismissal for serious cause.

Regulation (EC) No. 883/2004 provides a series of rules to determine which social security regime is applicable in the event of cross-border employment.  The basic principle is that a worker is subject to the social security regime of one Member State, namely the country of employment. Secondment and simultaneous employment are two exceptions to the rule.  For an overview of the most important changes, we refer to our newsletter: 'Expats: the summer of 2009' (pdf).

Originally there was talk of an entry into force on 1 March 2010.  However, as the signature of the implementing regulation was delayed until 16 September 2009, the date of entry into force was delayed as well.
 
It should be taken into consideration that Regulation (EC) No. 883/2004 foresees a 10 year transitional period, during which any existing situation can continue to fall under the current rules, as long as the situation is not modified and as far as the employee does not expressly request the application of Regulation (EC) No. 883/2004.

Moreover the Court argued that full-time employees that take parental leave in Belgium also continue to build up their seniority as if their employment wasn't reduced and that the National Social Security Office is considered to compensate the remuneration reduction in case of part-time parental leave.

This decision only concerns parental leave. For employees who enjoy working time reduction/time credit the Supreme Court and the Constitutional Court judged that the notice period should be calculated on the basis of the full-time remuneration, but that the severance pay has to be calculated based on the real (and therefore part-time) remuneration.

The Directive sets some minimum rules for actions and sanctions against employers of illegal immigrants in order to counter, in general, illegal immigration within the Member States.

It is to be noted that the focus is on sanctions for the employers and not for the illegal employees.

• Employers are obliged to require the third-country nationals to produce a valid residence permit or another authorization. Furthermore, they are obliged to keep at least for the duration of the employment the copies or records available for inspection by the competent authorities of the Member States. In addition they are obliged to notify the competent authorities of the start of the employment of third-country nationals with a period to be laid down.
• Employers who are held liable for employing illegal employees can incur financial penalties. Furthermore, they will be obliged to pay, even retroactively, the minimum wages, and the costs of return (transport) to the home country. With regard to the minimum wages, a presumption will apply that an employment of three months took place, unless the employer proves otherwise. Finally, the employers concerned can be excluded from entitlement to public benefits, aid or subsidies for up to five years.
• New, however, is the fact that the Directive, in case of subcontracting, foresees the joint and several liability of the principal to pay the financial sanctions and the minimum wages. Consequently, Belgian principals who rely on a subcontractor, who employs illegal employees, will be equally liable for the financial sanctions foreseen in the Directive. Even more, the Directive clearly states that Member States can even adopt more stringent liability rules. 

The Directive also foresees:

• that certain infringements will constitute criminal offences in certain very serious shortcomings and cases;
• making the filing of complaints easier; and
• an obligation for Member States to establish adequate and effective inspections.

Entry into force?

This Directive has to be transposed into Belgian law at the latest by 20 July 2011 and will be binding upon its entry into force. However, it can be expected that Belgium will not wait until that date  to do so. This is because the establishment of the joint and several liability of the principal was one of the preconditions for Belgium to open the entire labour market on 1 May 2009 for all citizens of the new EU Member States that joined the EU in 2004.  The former indicates a clear risk for those who decide to rely on a subcontractor who works with illegal employees!

This Directive introduces the European Blue Card, which is a residence and employment card for higher educated employees of third countries, and which can be seen as the equivalent of the American "green card." By doing so, Europe hopes to attract higher educated people from third countries, by installing a fast track procedure for residency and employment and by guaranteeing some social and economic rights.

The Directive puts forward some general preconditions under which Member States can award a 'European Blue card':

• the employee is required to present a valid work contract for highly qualified employment (of at least one year) and meet all professional requirements;
• the gross annual salary may not be less than 1.5 times the average gross annual salary in the concerned Member State. By way of derogation from this rule, for employment in professions which are in particular need, the salary threshold may be as low as 1.2 times the average gross annual salary in the Member State concerned; and
• the employee has to present a valid travel document (or, if required, a valid residence permit)  and evidence of  health insurance.

Rights of the Blue Card holder

The EU Blue Card will have a standard period of validity of between one and four years, with the possibility of renewal and provides that its holder is entitled to:

• entering and employment in the territory of the Member State issuing the Blue card. For the first two years the access to the labour market will be restricted to the exercise of paid employment which meets the conditions set out above. Furthermore, during the first two years of employment in the Member State concerned, as an EU Blue Card holder, changes in employer shall be subject to the prior authorization in writing of the immigration services. After these two years, Member States may provide those employees with equal treatment vis-à-vis the national citizens with regard to  the seeking of highly qualified jobs;
• the Member States must notify the employee in writing of their decision at the latest within 90 days of the application;
• equal treatment with nationals of the Member State issuing the Blue Card as regards working conditions, freedom of association, education and vocational training, recognition of diplomas, provisions in national law regarding the branches of social security and the access to goods and services, amongst other things; and
• after 18 months of legitimate residence in the first Member State, the employee and his family members, can move freely to a second Member State for the purpose of highly qualified employment. Nevertheless that person must present an application for an EU Blue Card as soon as possible and no later than one month after entering the territory of that second Member State.

However, it is up to the Member States to decide whether it will be the employee or the employer who has to apply for the EU Blue Card.

Entry into force?

This Directive has to be transposed into Belgian law at the latest by 19 June 2011 and in principle only takes effect from that point in time.

By introducing this EU Blue Card, for a maximum period of four years, it should be hoped that the administrative procedures to enter a Member State becomes less stringent for higher educated people, as previously third-country citizens had to apply for and obtain a yearly separate residence visa and an employment card.

This judgment, which confirmed a previous judgment of the Supreme Court of 15 January 1996, is not safe from any criticism. Indeed, this standpoint does not have the support of the regulatory provisions. Besides, it implies a "snowball effect" that the legislator did not want.

The Supreme Court has now referred the matter to the Labour Court of Mons. A case to be followed!

As Regulation (EEC) 1408/71 dates  from 1971, it was modified in 2004 by Regulation (EC) 883/2004. However, with regard to the latter, we had to wait until the implementing regulation was adopted before  it could enter into force. On 27 July 2009 this implementing regulation was finally adopted though it has yet to be published in the Official Journal of the EU. The new rules are expected to enter into force from 1 May 2010.

The following is an overview of the most important modifications.

Secondment
Under the current Regulation an employee can be posted to another Member State while remaining subject to the social security regime in the home country for an initial period of 12 months. Afterwards, a prolongation can be permitted for a new period of 12 months. Under the modifying Regulation, this initial period of 12 months is now prolonged to 24 months. 

In practice secondments up to five years are allowed on the basis of the exception provision (this is by virtue of an agreement between the home country and the host country). This possibility continues to exist. The other secondment conditions also remain applicable.

Simultaneous employment
The rules relating to simultaneous employment have been amended in a more significant way. On the basis of the new rules some workers risk to fall under another social security regime.

25% rule
Under the current Regulation the employee who works in various Member States, is subject to the social security regime of his state of residence when he pursues "a part" of his activities there. How much the employee has to work in his state of residence is not further specified. The jurisprudence of the European Court of Justice doesn't give much clarity either. For many Member States an average of one day a month is therefore enough to subject the employee to the social security regime of his state of residence. The exercise of only marginal activities in the state of residence will however not suffice anymore. Under the new Regulation the employee must  pursue a substantial part of his activities, accounting for 25% of his work time or remuneration, in his state of residence in order to be subject to the social security regime of his state of residence. If not, he will be subject to the social security regime of the Member State in which is situated the seat of the employer employing him.

An exception to the 25% rule is foreseen for those employed in various Member States by an employer that is situated outside of Europe and residing in a Member State. They are automatically subject to the social security regime of their state of residence, even if they do not pursue a substantial part of their activities there. The same applies for employees who are employed by various employers that have their seats in various Member States. For them as well, the 25% rule doesn't apply, as they remain subject to the social security regime of their state of residence anyhow.

For a self-employed person the 25% rule also applies. If these are not fulfilled, such individuals are subject to the social security regime of the Member State in which "the centre of interest of their activities" is situated.
 
Annexe VII
"Annexe VII" is repealed under the new Regulation. Belgian self-employed persons (as e.g. administrators of undertakings) who also pursue activities as employees abroad will from now on also be subject to the social security regime for self-employed persons in the Member State that is competent for their activities as an employee for their Belgian self-employed activities.

Abrogation of the specific rules for international transport employees
The specific rules for the "driving, navigating and flying" personnel of international transport companies are repealed. From now on the same rules apply to them as to the other employees.

Entry into force and transitional measures
The entry into force of these new rules is in principle foreseen for 1 May 2010.

The new Regulation foresees a transitional period of 10 years during which existing situations under the present rules can continue to apply  as long as these aren't modified and as far as the employee doesn't explicitly request the application of the new Regulation. In other words, if an employee will only marginally work in his home country although he wants to remain subject to the social security regime of the home country, it is important for him to establish the simultaneous employment before 1 May 2010. The same applies for administrators of Belgian undertakings who only work as an employee abroad but who want to be affiliated to the National Office of Social Insurance for the Self-Employed (and not to a foreign equivalent).

Also note that the National Social Security Office (WOSS) has informed us that they will only adapt existing situations when the employee sends a written request to the National Social Security Office to do so. Furthermore, the employee will have to pronounce explicitly in this request that he is aware of the consequences of this change for both the social security contributions and benefits.

An additional detail finally is that the new Regulation for now will only  be applicable to EU nationals. Nationals of third countries remain subject to Regulation (EEC) 1408/71. Also with regard to Norway, Iceland, Liechtenstein and Switzerland Regulation (EEC) 1408/71 remains applicable.  

These new directives also apply to managers.

When the sports and culture cheques meet the before-mentioned conditions, they constitute a "rejected expenditure" (fiscally not deductible) for the employer/company.
Finally, the Tax Authority confirms that it is possible to combine sports and culture cheques with other coupons, even when they are also related to sports and culture (for example, book coupons, film cheques, admission tickets for sport events, etc.).