Settlement of single leaver holiday pay: new calculation method from 1 January 2024

On 1 January 2024 , the rules currently in force for the settlement of the single leaver holiday pay of non-manual workers and of the holiday pay when switching from manual worker to non-manual worker status will be fundamentally changed.

Context

When a manual worker leaves an employer, he or she receives leaver holiday pay: a payment to cover the leave days not taken in the year of departure, and a payment for the days worked in the year of departure. These payments are stipulated, among other things, on documents known as holiday certificates.

Currently, when the double holiday pay is calculated by the new employer, the entire holiday certificate is settled at once.

The following payments are therefore settled in one go:

• The double share of the (basic and additional) holiday pay; 
• The single share. This share is therefore deducted in one go from the salary for the month concerned, regardless of the number of leave days and the origin of these leave days.

This practice, which had been in force for years and was accepted by the NSSO, was questioned in 2021 by the FPS Employment, as it violated article 23 of the Wage Protection Act of 12 April 1965..

This article 23 exhaustively defines the cases in which the employer may unilaterally deduct certain sums from the employee's salary. The following, inter alia, may be deducted from the employee's salary: cash advances by the employer, the total amount of which may not exceed one-fifth of the cash remuneration due for each pay period, minus any deductions made pursuant to tax legislation, social security legislation and pursuant to individual or collective conventions concerning supplementary social security benefits. The single holiday pay/the single share of the leaver holiday pay is therefore not included in this list.

The matter was referred to the social partners, and in its opinion no. 2.297, the National Labour Council proposed a solution that led to the application, from 1 January 2024 (holiday year 2024, holiday qualifying year 2023) of a new practice for deducting the single leaver holiday pay. 

New settlement procedure

This new solution to settle the leaver holiday pay from the previous employer(s) and the holiday pay when switching from manual worker to non-manual worker status, provides for a deduction of 90% per day of leave taken that is covered by the holiday certificate and a correction in December.

The new settlement procedure therefore provides for two phases: a first phase in which holiday entitlements are determined at the time the holidays are taken and a second phase in which a final settlement is made in December of the leaver holiday pay for the single holiday pay.

First phase

In the first phase, at the time the non-manual worker takes his or her leave acquired on the basis of a holiday certificate, the employer will pay those days minus a lump sum (90%) of the gross daily salary for the month in which the non-manual worker takes his or her leave. Each day of leave covered by the holiday certificate will therefore be paid at 10% of the daily salary.

Second phase

There is a second, final calculation or settlement moment at the time of the salary settlement covering the December period, or at the end of the employment contract at the earliest.

In this second phase, any corrections resulting from the difference between the 10% single holiday pay paid during the year with the new employer for the leave days acquired with the former employer) and the single holiday pay actually due from the new employer, from which the single leaver holiday pay already paid by the previous employer or by the holiday fund was deducted.

Any single holiday pay overpaid by the employer is considered to be a cash advance within the meaning of article 23 of the aforementioned law of 12 April 1965. As a result of the corrections made, the employer will inform the non-manual worker of the amount deducted/paid via the pay slip.

For the sake of transparency, the holiday certificate will therefore be completed so that this social document states in a comprehensible manner that the leaver holiday pay is an advance payment for leave to be taken with another employer and that the leave days taken on the basis of the holiday certificate with the new employer will be paid with the new employer, minus a lump sum of 90% of the gross daily salary of the non-manual worker for the month in which he takes his leave days.

This new settlement method applies only to single holiday pay. Nothing changes with regard to the settlement of double holiday pay.

It applies for the first time to leave days taken from the 2024 holiday year, i.e. from 1 January 2024.

Source: Royal Decree of 28 September 2023 amending articles 46, 48 and 49 of the Royal Decree of 30 March 1967 determining the general terms and conditions for implementing the laws on annual leave of wage-earning workers, Belgian Official Gazette 18.10.2023