Discussion Paper from Belgium on The "Rosetta Plan" - A ...

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<strong>Discussion</strong> <strong>Paper</strong> From Host Country Government: <strong>Belgium</strong> Obligation for the employers to create additional employment for young people Within the framework of a first job agreement, a private-sector employer putting to work at least 50 workers (physical units) is obliged to hire a number of young unemployed corresponding to 3% of his workforce (full-time equivalents on June 30th of the previous year, excluding new workers). The occupation of new workers must constitute an additional recruitment and can thus not be compensated by firing company personnel. Enterprises that do not put to work 3 % of young people, risk financial sanctions under the law, i.e. risk having to pay a compensatory indemnity of BEF 3.000 per youth and per day during which the compulsory percentage has not been met. The individual obligation of the employer has not been extended to enterprises employing less than 50 persons. However the government hopes that these employers will recruit young people on a voluntary basis and that the larger enterprises will recruit youngsters above the required percentage of 3%. The contribution cut should help them doing so. Regulation also stipulates that all the private-sector employers ought to recruit collectively a number of young people representing 4% of the workforce of all the enterprises together, putting to work over 50 workers. The SME intervene jointly so as to help the enterprises putting to work over 50 workers to reach the recruitment threshold of 4%. The National Labour Council (CNT/NAR) and the Central Economic Council will make an evaluation, one year after the enforcement of the law. This evaluation will also concern the impact of the project as far as the balance men/women is concerned. Should the evaluation not be positive and on basis of the CNT/NAR recommendations, the percentages of cuts in the employer' social security contributions (cf. infra) are liable to be modified by royal decree. Private-sector employers in difficulty or in the process of a reorganisation can be exempted by the Federal Ministry of Labour and Employment <strong>from</strong> all or part of their obligations in the field of first job agreements. Enterprises willing to conclude an agreement with the Ministry of Employment and Labour on the creation of additional full-time employment for young people as well as enterprises belonging to a sector that, within the framework of a collective bargaining agreement, makes a reasonable effort in the field of employment of youngsters eligible for an integration path, are liable for an exemption. The education sector excepted, the public-sector employers (Regions, Communities, towns and municipalities,… ) as well as the non-profit private sector employers are obliged to take on a number of new workers corresponding to 1,5% of their workforce. A first job agreement can consist in: 1. Either an open-ended or fixed-term full-time employment contract or part-time (at least half-time) employment contract, the first year of which is considered to be a first employment agreement. 2. Or a part-time (at least a half-time) employment contract, completed by a training. For a period of one to two years, three years when the initial training lasts for three years; 3. Or an apprenticeship contract for a salaried or a self-employed profession, a traineeship contract for a self-employed profession, or a integration agreement. Period: at least one to two years, three years when the initial training lasts for three years. Moreover, in collaboration with the Regions, vocational training or individual guidance (cf. recommendation 1.a) are proposed to young people under 25 years of age: • having left school since at least three months; • seeking a job not longer than three months; • not holding a diploma of higher secondary education. June 2001 Peer Review " Rosetta Plan" - A Springboard For Young People Into Employment, <strong>Belgium</strong> 2
<strong>Discussion</strong> <strong>Paper</strong> From Host Country Government: <strong>Belgium</strong> In the private sector, including the non-profit sector, new workers employed within the framework of an employment contract, are entitled to a salary equal to the salary of workers having the same function, in accordance to the pay scale applied in a given enterprise. In case of part-time work, the salary is in proportion to the worked hours. If a new worker is employed within the framework of a half-time employment contract for a length of time of at least 12 months, the employer is entitled to put out an amount corresponding to 10 % of the worker’s wage for his or her training. If such is the case, the worker is entitled to 90% of his or her normal pay, which can however never be inferior to the guaranteed average minimum monthly income. The works council or, failing that within the enterprise, the trade union delegation or, failing that, the sub-regional employment committee are once a year fully informed on the actual spending of the 10% used for training purposes. The National Labour Council will evaluate this every year. In the public sector, a new worker employed within the framework of an employment contract is entitled to a salary that equals the initial salary of a personnel member with the same professional skills. In case of part-time work the salary is proportional to the worked hours. The employer can also decide to put out an amount corresponding to 10% of the worker’s salary for his or her training. Financial incentives for employers For young people employed on a first job agreement, the employer pays the usual social security contributions. Such as for the other workers, he is granted a structural costs reduction of which the amount has increased on 1 April 2000. On the other hand, for low-skilled young people (who do not hold a diploma of higher secondary educational level) employed by virtue of a first job agreement which consists in a contract of employment, the employer has the right to deduct a quarterly fixed sum of BEF 20,000 over all social security contributions provided that he employs young people who would represent at least 3% of his workforce. For an employment of more than 3% of young people in comparison with his workforce, the employer is granted for the recruitment of each additional low-skilled young person a quarterly reduction of BEF 45,000. If the employer voluntarily employs 5% or more young people, he receives a quarterly reduction of BEF 45,000 for all of the low-skilled young people employed. These reductions are also applicable to the employers who are not forced to do so but who spontaneously employ young people <strong>from</strong> this target group. Financial incentives for the employer who keeps at his service the young worker at the end of the first job agreement The public or private employer who keeps at his service low-skilled young people under a written fixedterm contract of employment, may receive costs reductions like foreseen in the recruitment benefits plan. It means in concrete terms: • after a first job agreement of at least 12 months, a 75% reduction of the costs during the first 4 quarters and a 50% reduction for the next 4 quarters; • after a first job agreement of at least 24 months, a 100% reduction of the costs during the first 4 quarters and a 75% reduction for the next 4 quarters. June 2001 Peer Review " Rosetta Plan" - A Springboard For Young People Into Employment, <strong>Belgium</strong> 3
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