COVID-19: temporary unemployment for employees
As you could read in our previous newsletter, the Belgian government introduced the possibility to apply for temporary unemployment for employees, using a simplified procedure. This simplified procedure could initially be used up to the 6th of April but has been extended in the meantime until the 19th of April. It is worthwhile noting that this is only one of the measures taken by the Belgian government to face the current crisis so you might be able to benefit from other measures.
We cannot emphasize enough the fact that the Belgian government changes these support measures on a regular basis. This newsletter provides you with a status of affairs applicable on April 8th 2020.
Under certain conditions, you can apply for temporary unemployment allowances for employees who can no longer be fully or partially employed. By applying temporary unemployment, you suspend the employment contract of your employee on a temporary basis.
Not every employer can use the possibility of temporary unemployment. Only employers facing a direct impact of Covid-19 on their workforce, resulting in employees who can no longer or only partially execute their function, can use the special procedure of temporary unemployment.
Examples are: a shop being closed, sales representatives who can no longer visit their clients and do not have enough work to do from home, orders no longer being made, etc.
Not all employment contracts need to be suspended. Only for those employees who can no longer or only partially work because of their function, temporary unemployment can be used.
If you wish to apply temporary unemployment as an employer, a simplified procedure applies until the 19th of April 2020. It entails that you inform your Payroll Business Partner which days your employees will work and which days they are unemployed. Pro-Pay takes care of the required electronic registration of these unemployment days which allows the Unemployment Office (RVA/ONEM) to determine the unemployment allowance for the employee.
It is possible to suspend the employment contract either fully (the employee does no longer work) or partially (the employee works one or more days per week). In case the employee is partially unemployed, the employer determines how many days the employees can continue to work. The employees do not need to formally approve but obviously, they need to be informed upfront when they are supposed to work and when they will be unemployed. This information to the employees does not need to meet any formal requirements, an e-mail can be sufficient in some cases.
The unemployment allowance
The employee who is temporarily unemployed needs to contact his labour union (in case he/she is a member) or the “Auxiliary office for unemployment allowances” in order to open a file and be able to receive unemployment benefits. Opening a file with the Auxiliary office can be done online. The labour union or auxiliary office will transfer the unemployment allowance monthly to the bank account of the employee.
The allowance amounts to 70% of the gross monthly salary. The monthly salary being limited however to 2.754,76 EUR. On top of that, the unemployment office pays 5,63 EUR per day of unemployment. Both amounts are subject to 26,75% of withholding tax.
In some sectors of industry there is an additional obligation to pay a supplement on top of this unemployment allowance. Apart from that, it is possible for the employer to pay a supplement on a voluntary basis. This supplement can be granted free of social security contributions on the condition that the total of the unemployment allowance + the supplement(s) does not exceed the taxable salary earned by the employee in case he would have worked.
The employees who are partially unemployed continue to receive their salary for the days they work. Pay attention to the fact that employees who normally speaking have a lot of business travel and who only work from home in the present circumstances, will no longer be entitled to certain lump sum reimbursement of costs related to their travel.
Temporary unemployment days are equalized with working days in view of pension accrual. At this moment, there is no equalization yet for the accrual of holiday entitlement and holiday pay but based on what we read in the press, legislation is to be expected that will organize said equalization.
As far as the equalization is concerned for the year-end premium and other benefits granted on sector level, one needs to check what has been organized on the level of the joint industrial committee. It cannot be excluded that several sectors of industry will come to an agreement to equalize this exceptional period and consider the temporary unemployment as days of work, if this was not yet the case.