Synelnychenko Dmytro

Up to 0.4% wage rise plus 500-euro bonus

Key ministers in the federal government have struck a deal on the scope for wage increases.  Wages may rise 0.4% over the next two years, but businesses that performed well during the pandemic can offer employees a bonus of up to 500 euros after tax.

The government had to step in after the social partners failed to agree on the matter. Given the ideological differences between right and left in the government it took until the early hours for the deal to materialise.  VRT’s political editor Johny Vansevenant sees the agreement as a victory for left wing parties that insisted the bonus should be 500 euros after tax. “The bonus will be more expensive for employers as social contributions will be due.  Left wing parties say the money is needed to fund social security” says Vansevenant.

Employees in businesses that saw turnover rise 30% during the pandemic may look forward to a bonus, but other workers too could benefit as no strict conditions have been set on who can and who can’t get the bonus. Unions will now negotiate with management in each individual company. Talks per individual business are seen as a gain for right wing parties as the unions had preferred a deal per sector. Union action remains possible if the outcome is seen as unsatisfactory.

The government has also asked social partners to agree ways of increasing minimum wages.  The government will contribute by reducing taxes.

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