Sectoral salary increases and their positive outcome on employees' benefits package

Several joint committees recently signed sectoral agreements that provide for a salary increase. By way of example, it refers to the pay margin of 1.1% for the period of 2017-2018. In some sectors, ecocheques have already been introduced. In others, employees are entitled to an annual premium. In most cases, the joint committee provides the employer the option of converting these types of salary increase into an equivalent benefit. When an employer chooses an alternative benefit, employees often receive a greater net benefit than they would in the event of a standard salary increase. We have listed the various options for you.

Sectoral salary increases and their positive outcome on employees’ benefits package

Supplementary pension

In joint committees with no sectoral pension system in place or where the salary increase is not spent in a sectoral pension plan, employers may choose to use the salary increase to supplement an existing company pension plan or, if no supplementary pension is accumulated for employees, to introduce a new company pension plan. However, if a new pension plan has to be started, not all insurers are prepared to do so if the premiums are limited.

A sectoral pension system is in place within some joint committees. These sectors may opt to apply newly negotiated salary increases for the sector plan’s higher contributions.

In joint committees that allow companies to act outside the scope of the sector plan through their own company pension plan, this business plan should at least be similar to the sector plan at all times. For these companies, then, an increase in sector plan contributions implies an increase in contributions from their company pension plan − unless the contributions were already higher than those stipulated by the sector plan. For those company plans, the sector will impose a deadline for submitting a certificate from their insurer that states that their pension plan is similar to the sector plan. If the sector increase is not to be (fully) used for the increase in pension contributions, the employer may choose to spend the amount on other similar benefits.

Within the framework of the Unity Statute, the spending of the sectoral salary increase on a pension plan should not magnify existing differences between manual workers and employees or introduce new ones.

Medical expenses

Employers may choose to use the sectoral salary increase to introduce a collective hospitalisation insurance or ambulatory costs insurance policy, or to optimise their existing health care insurance. There are several insurance options on the market that meet the sectoral salary increase budget for both hospitalisation insurance and ambulatory costs insurance.

Other benefits

Sectoral salary increases can also often be used for other similar benefits, such as the introduction of or increase in meal vouchers or ecocheques.

A combination of various benefits is also possible in most cases. For example, employers can use part of the budget on hospitalisation insurance for their employees, another part on increasing the value of the meal vouchers, and the remainder on a salary increase.

Within each joint committee, the sectoral agreements have their own conditions and determine the employers’ choices. The sectors always set a deadline for companies to decide how to allocate the sectoral salary increase. If the company does not opt for an equivalent benefit in time, the sectoral agreement’s default option will be applied (e.g. increase in gross salary, introduction of ecocheques, awarding of an annual premium, etc.).

We are there for you.

Would you like to view the specific options within your joint committee in order to spend a sectoral salary increase on insurance for your staff? If so, contact your account manager Employee Benefits.

Subscribe to our newsletter.