Starter jobs for young people postponed

Because the regulations do not take definite shape, starter jobs for young people can no longer take effect on 1 July 2018.

Starter jobs in theory

Starter jobs are intended to help young people without professional experience find a job at a lower cost for the employer. In our Infoflash of 1 June 2018, you can read how this measure was conceived:

1. The young person's gross salary scale is reduced by an age-related percentage.
2. To offset the net loss (due to the lower gross salary) the employer pays a net monthly allowance.
3. This net allowance is then converted into an exemption from paying withholding tax.

Where are we at the moment?

Formally, an employer may hire a young person under the starter job system as from 1 July 2018. The legal text allowing the employer to reduce the gross wage was published in the spring of 2018, but for the allowance (and the tax exemption) a Royal Decree had to work out the modalities.

However, that Royal Decree is still lacking and, in the meantime, certain principles of the basic law have been called into question. Certain government partners have launched proposals to convert the planned net premium into a gross amount, to eventually exclude sectors with degressive pay schemes for young people…

In the meantime we approach 1 July, and the consultations on the regulations are still in progress.

The original timing is therefore no longer feasible.

Specifically: postponement and waiting...

In practice, it is not possible to hire young persons in a starter job for the time being.

There is neither a conclusive legal framework for the specific employment contract nor for the correct payroll processing.

We have reliable information that the government will postpone the measure, but no new start date has yet been set.

Certain modalities may need to be adjusted, so we will also have to wait and see what the content will be.

We are closely following the discussions in the Council of Ministers and will not fail to provide you with updates on the progress of this matter.

Author: Els Poelman

21/06/2018