Onboarding new employees: ready for take-off?
19 Aug 2019
Since a lot of new graduates will start to work in September, as an employer you need to be ready and ensure that all social security and employment formalities are completed before the employee commences work.
Employment agreement
First of all, once an applicant has successfully completed a recruitment procedure and the employer has finally decided to hire him or her, the parties will have to conclude a written employment agreement whereby the employee commits himself to perform labour under the authority of the employer in return for salary. Although it is not required to conclude an employment agreement for undetermined period in writing, we strongly recommend to do so for evidence and legal certainty reasons. Note moreover that several other types of clauses or employment agreements (part-time, defined period, sales representative, etc.) do have to be concluded in writing and have to include certain mandatory provisions. The employment agreement always needs to be signed by both the employer and the employee.
Work regulations
Upon signing the employment agreement or at the latest on the first day of employment, the employer needs to hand over a copy of the work regulations to the new employee. If not, the employee is not bound by the provisions set forth in the work regulations. That is why it is important for the employer to have written proof in this respect, for instance by having the employee sign a return receipt or by including the acknowledgement of receipt in the employment agreement.
Payroll formalities
DIMONA
Upon the start (and termination) of a new employee who is subject to the Belgian social security scheme, the employer must file an electronic notification (referred to as the “DIMONA notification”) with the National Social Security Office (i.e. RSZ/ONSS) no later than the moment when the new employee starts to work. Failure to file or late filing of a DIMONA notification can, worst case, be sanctioned with a criminal penalty ranging from 4,800 to 48,000 euros for each employee, to be borne by the employer. It is thus important to have a proper follow-up system in place.
Payroll agency and benefit providers
If the payroll is externalized to a payroll agency, the latter must be informed of the hiring of the new employee and the related salary package to be able to start up the payroll. The employer (or the payroll agency) will also have to inform the appropriate insurers or providers, depending on the new employee’s salary and benefit package (meal voucher provider, car leasing company, group insurer, etc.).
Social security coverage
The employer has to inform the occupational accidents insurer for the new employee to be covered.
If the new employee has children, note that, as from 2019, the employer is no longer obliged to affiliate such an employee with a child benefit fund. It is now for the employee to ensure affiliation with a child benefit fund of choice.
Holiday certificate
If the newly hired employee has previous work experience, he should hand over a holiday certificate issued by his previous employer. Such a certificate allows the new employer to assess the number of holidays the employee will be able to take during the first year in the service of the employer and calculate the amount of holiday payment still due, taking into account the leave holiday pay already received from his previous employer.
New graduates without a previous employer will only be entitled to a number of holidays that depends on the number of days worked in the previous calendar year. However, note that additional holiday entitlements exist for young graduates, which we will discuss in a future newsletter.
Medical examination
A medical examination at the start of the employment for office workers is generally not required. Such medical tests are only allowed if there are specific physical requirements to be fit for the job or exposure to health threats in the performance of the job.
Never had employees before?
An employer who has never hired and employed people before will in first instance have to affiliate with the National Social Security Office to pay the social security contributions due for his employees.
Note, however, that a new employer can benefit from a target group reduction for the first 6 employees he hires under the Belgian social security regime, meaning that, for the 1st employee hired, there is almost full exemption of the standard employer social security contributions (unlimited in time) and, for the 2nd until the 6th employee, a lump-sum reduction can be enjoyed during a limited period of 20 quarters.
Moreover, subject to certain conditions, employers can also benefit from target group reductions for hiring young workers, older workers or long-term unemployed persons. Such a target group reduction is a fixed contribution reduction that depends on certain criteria to be met by the employer and/or employee. Only one target group reduction may be applied for each employee.
Other requirements to be met (under certain conditions) by the new employer are:
- taking out occupational accidents insurance;
- retain monthly wage withholding tax from the employees’ salaries;
- setting up an internal service for prevention and protection at work or affiliating with an external service for prevention and protection at work;
- if subject to Belgian corporation tax, joining a social insurance fund for self-employed people in the context of the payment of the annual corporate contribution.
When you consider employing people for the first time or hiring new employees, it will thus be important to keep track of all social security and employment formalities to be completed before the start of the employment. PwC legal would of course be happy to answer all your questions and assist you with all formalities, affiliation procedures and even the set-up of a payroll.
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