Holiday pay for white-collar workers - December settlement from 2014

The 'December settlement' is intended to ensure the accrued holiday rights to white-collar workers reducing their working time.  From 2014 the calculation is less complicated.

Holidays in any holiday year are calculated in relation to the time worked in the previous calendar year (the 'qualifying' holiday year). As a result of a working time reduction the holiday rights, built up on the basis of previous - higher - work performances for maximum 2 calendar years, cannot be fully used up.

Until 2013 the employer had to 'pre-finance' the holiday pay in case of reduced working time. In December of the year of reduction (qualifying holiday year) he paid 15,34% of the annual remuneration. The next year (holiday year) this amount could be deducted from the single and double holiday pays. 

In practice, this technique caused many difficulties. When taking up his holidays the white-collar worker found himself in a situation of income insecurity as he received no remuneration (because of the deduction). The employer had to pre-finance the holiday rights and later make the complex settlement. 

From 2014 the employer shall 'post-finance' the holiday pay deficit caused by reduced working time at the end of each year. In December of the holiday year he shall pay a supplement to the single or (otherwise) double holiday pay so that for each pay 7,67% of the wage bill of the previous year (qualifying holiday year) is reached.

In this way the objections to the former technique are eliminated:  there is no advance payment any more, neither a deduction at the time of the holidays.

When the white-collar worker has reduced his working time the employer shall, together with the remuneration of December, evaluate the single, otherwise double holiday pay on the basis of the annual remuneration of the previous year. A positive difference will be made up, a negative difference will be neutralized (the white-collar worker will never have to pay back holiday pay).

December settlement single holiday pay =

7,67% of the actual and fictitious gross remunerations of the qualifying holiday year (excluding the fixed end-of-year bonuses) reduced by the single holiday pay paid in the holiday year and calculated in relation to the work scheme at the time of the holiday.

December settlement double holiday pay =

7,67% of the actual and fictitious gross remunerations of the qualifying holiday year (excluding the fixed end-of-year bonuses) reduced by the double holiday pay paid in the holiday year and calculated in relation to the work scheme at the time of the (main) holiday.

A December settlement shall be made for any holiday year when the weekly working time reduction meets the following criteria:

• the reduction is a reduction of the average weekly working time;
• the new working time is a part-time job (a reduction of the full-time working week is not involved);
• the reduction takes place with the employer who makes the December settlement;
• the reason for the reduction is of no importance - the reduction can also take place under a special scheme such as part-time time credit or part-time work resumption during incapacity for work;
• one isolated reduction is sufficient, irrespective of the future evolution of the working time. 

December settlements are made as long as the white-collar worker cannot fully use up his built-up holiday rights as a result of his reduced working time. For one isolated reduction two calendar years are involved: the year of the reduction itself and the following year.

Effect date of the 'new' December settlement

The new regulation has become effective on 1 January 2014.  So the first December settlement under the new regulation will be made in December 2014.  The last December settlement (the so-called 'pre-financing') under the old regulation took place in December 2013.

Theoretically, the December settlement of 2014 concerns the white-collar workers of whom the average working time has been reduced in 2013 and/or 2014. White-collar workers for whom a pre-financing was made in December 2013 have received the guaranteed single, otherwise double holiday pay of 2014 (15,34% on the 2013 remuneration). For them, no December settlement will be made in December 2014, regardless of the time of their working time reduction (in 2013 and/or 2014).

In service on 01.01.2012

Full-time 38/38 until 03.31.2015 - monthly remuneration €4,000.00

Part-time 19/38 (= ½) from 04.01.2015 - monthly remuneration €2,000.00

Annual remuneration 2014 (without end-of-year bonus) = €48,000.00

The holidays of 2015 are taken in the period from April until December

Working time reduction in 2015Ò December settlements in 2015 and 2016

Calculation of de December settlement of 2015

December settlement single holiday pay = (€48,000.00 x 7,67%) - €1,846.15 = €1,835.45

December settlement double holiday pay 2015 = (€48,000.00 x 7,67%) – €1,840.00 = €1,841.60 

Source of law:  art. 46, § 3 of the Royal Decree of 03.30.1967 determining the general terms and conditions for the implementation of the laws relating to the annual holidays, as modified by the Royal Decree of 11.07.2013 (B.M. 11.21.2013). 

Author: Els Poelman

20/08/2015