The profit premium: mind the new pro rata calculation method

New calculation rules will soon apply to the profit premium. The government submitted a bill, but the Chamber must still approve it. Keep this in mind, especially if your financial year coincides with the calendar year.

NEW PRO RATA CALCULATION RULES

You are considering granting an identical profit premium at the beginning of 2019 in relation to the profit realised by the company in 2018. The new pro rata calculation method will already apply to these profit premiums.

As a basic rule the amendment presupposes a pro rata calculation. The amount of the profit premium is calculated pro rata to the employee's actual work performance during the financial year.

Certain suspensions of the work performance are equated with work performance. The distinction between voluntary and involuntary suspensions is abolished. The equation applies to the following situations:

1. The employee is entitled to wages during the suspension;
2. During maternity leave, parental leave, adoption leave and foster leave;
3. Days of incapacity for work covered by guaranteed wages in the event of illness, accident, industrial accident or occupational disease.

You will be able to exclude employees who were dismissed for urgent reasons in the course of the financial year or who have resigned themselves. In that case, these employees are not entitled to a profit premium. (Exception: the employee resigns for an urgent reason on the part of the employer.)

SOME CONCRETE SITUATIONS

The current regulations leave room for interpretation. The company itself must know how to deal with this lack of clarity. The new calculation method will remove this lack of clarity. Some concrete examples.

• An employee joined the company on 1 March 2018. He or she therefore contributed for 10/12th to the profit result. In the spring of 2019, the general meeting will grant an identical profit premium. The employee is entitled to a profit premium pro rata to his or her actual employment in 2018. However, you can include a seniority condition. In this way you can exclude employees who have less than one year of seniority.
• A colleague has been in service for several years and is ill for one week in the spring of 2018. This period of incapacity for work is equated. The employee is entitled to a full profit premium.
• Your employee wants to travel around the world. You agree with him or her to suspend the employment contract by mutual agreement for six months, without retention of salary. The employee only contributed for 6/12th to the profit result and is therefore entitled to a profit premium pro rata to the actual employment during the financial year.
• The company terminates the employment contract with a notice period in the course of the financial year. The notice period ends on 30 November 2018. The employee contributed for 11/12th to the profit result. When the profit is distributed in the spring of 2019, the employee has already left the company. Nevertheless, he or she will still be entitled to a profit premium pro rata to the actual employment in the financial year 2018.

You as an employer can always choose to grant all employees the same amount and not to adjust pro rata to the actual work performance. This also applies in the case of part-time employment.

GETTING STARTED

Avoid a copy paste of last time. Contact us and let us guide you through the development and granting of the profit premium. Our e-mail address: legal.partners@partena.be.

Of course you can also read more yourself.

• All the advantages of the profit premium at a glance? Read our infoflash
• Bonus plans for 2019? In our October edition of our monthly magazine Memento of the Employer, we give you some concrete tips.