Wage cost increase in joint committee no. 200
21 Dec 2021
Employers in joint committee (JC) no. 200 are confronted with a significant increase in wage cost. Firstly, all salaries have to be increased with 0.4% in December 2021, following the negotiations on the maximum margin of salary increase for the period 2021-2022 at the industrial level. Secondly, a mandatory indexation of 3.51% (current projection) will be applicable in January 2022.
Upcoming indexation in JC no. 200
In the majority of industries in Belgium, a system of automatic mandatory indexation of salaries is applicable in order to safeguard employees’ purchasing power in the event of inflation. More specifically, this means that salaries are linked to the fluctuations of the consumption price index. Two different indexation mechanisms exist in this respect: i) at regular intervals; salaries are indexed at an agreed point in time (e.g. 1 January of each year) with the percentage that is applicable at that point in time or ii) based on a progressive scale; salaries are indexed automatically with a fixed percentage every time the reference index exceeds a certain predetermined threshold.
Partly fueled by rising energy prices, the inflation has surged during the last 12 months, surpassing earlier projections. This of course impacts the consumption price index, which in turn results in automatic indexation of salaries. To wit, based on the current projections (the end result could still slightly vary), a mandatory indexation of salaries in JC no. 200 with 3.51% is expected in January 2022, the largest indexation in more than 10 years. This turn of event of course not only impacts JC no. 200, but has resulted – and will continue to result – in mandatory indexation in all industries that apply a system of automatic indexation, irrespective of the indexation mechanism.
Companies, which will have most likely already made their budget for 2022, will now have to take into account this significant increase in wage cost. Employer’s organisations have called for an ‘index-jump’ – effectively not applying the upcoming automatic indexations –, in order to try to keep the Belgian wage cost evolution in line with our neighbouring countries as much as possible, to safeguard Belgian companies’ competitiveness (also see below). However, several political parties within the federal government have already rejected this proposal.
Maximum margin of salary increase - 0.4% in JC no. 200
The indexation in January 2022 will come on top of the 0.4% increase of salaries that was recently negotiated in JC no. 200 (as well as in numerous other JCs), in the framework of the Interprofessional Agreement 2021-2022. This 0.4% increase has to be applied as from December 2021 and constitutes the maximum margin of salary increase (excluding automatic indexations) for the period 2021-2022, as calculated by the Central Economic Council (CEC).
Key takeaway
Companies in JC no. 200 are confronted with subsequent increases in wage cost; a 0.4% increase of all salaries in December 2021, followed by a mandatory indexation of salaries with an expected 3.51% in January 2022 and will have to take this into account in their 2022 budget.
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