Government sets wage norm for 2021-2022 at 0.4%

After the organizations of employees’ and employers’ representatives could not reach an agreement on the maximum margin of the wage cost evolution for the years 2021-2022, the government decided by Royal Decree of 30 July 2021 that this maximum margin - the so-called wage norm - for the years 2021-2022 is equal to maximum 0.4% on average.

The wage norm expressed by this percentage determines the extent to which the average salary cost of a company may increase over a two-year period and aims to safeguard Belgium's international competitiveness in relation to neighboring countries.

With the Royal Decree of 30 July 2021, the government confirmed the percentage of 0.4% proposed by the Central Council of Economic Affairs for the years 2021-2022. In concrete terms, this means that the average salary cost within a company may increase by 0.4% in the years 2021-2022. Individual salary increases are therefore still possible, as long as the average salary cost within the company increases by a maximum of 0.4%. Also salary increases resulting from indexation and baremic increases are not covered by the maximum margin of 0.4%.

Companies that do not respect this wage norm may (at least in theory) be sanctioned with administrative penalties. In addition, agreements containing salary increases in violation of this wage norm may be declared null and void by the courts. Therefore, companies should monitor the evolution of their salary cost for the years 2021-2022. However, in practice, we note that there is no priority to penalize any violations of the wage norm. One of the reasons for this is that it is very difficult to establish a violation.