Implementation of IPA 2023−2024: reintroduction of relance hours and extension of the one-off innovation premium

On 6 April 2023, the social partners, represented in the Group of 10, concluded an Interprofessional Agreement (IPA) on several measures concerning minimum wages, supplementary pensions, flexibility, end of career and the extension of current records. The Law of 31 July 2023, published in the Belgian State Journal on 5 September 2023, implements some of the agreed measures, relance hours and innovation premiums. Both measures are not new, but we refresh the main points of interest here.

Reintroduction of relance hours

The idea of relance hours dates back to the COVID pandemic. To meet the needs of so-called "essential sectors", the government made it possible for these sectors to allow employees to perform 120 additional voluntary overtime hours.

In the 2021-2022 Interprofessional Agreement, the social partners represented in the Group of 10 decided to extend this measure to all sectors. The relance hours continued to apply until 31 December 2022. As of 1 January 2023, it was no longer possible to rely on these additional voluntary overtime hours.

In the 2023-2024 Interprofessional Agreement these relance hours were however reintroduced. As from 1 July 2023, it has been made possible (again) to make use of these additional voluntary overtime hours. What does this mean in concrete terms?

• As from 1 July 2023, employees can again perform 220 voluntary overtime hours, consisting of 100 voluntary overtime hours (basic quota) + 120 relance hours (additional quota)
• These quota always apply per legally defined period. The following three periods were set for this purpose:
  • 1 July 2023 to 31 December 2023;
  • 1 January 2024 to 31 December 2024;
  • 1 January 2025 to 30 June 2025.

Relance hours are very interesting, because:

• no overtime has to be paid or compensatory rest has to be granted;
• no social security contributions need to be paid on the salary paid for these overtime hours; and
• provided the relance hours are performed between 1 July 2023 and 30 June 2025 and no overtime is paid, the relance hours are also exempt from income tax. However, as soon as overtime or any other additional remuneration is paid for these voluntary overtime hours, the tax exemption disappears.

The bottom line is that gross pay for these overtime hours, if the conditions above are met, can be paid net.

Finally, it is important that - before performing relance hours - the employee must explicitly agree to perform relance hours in writing. This agreement is valid for six months and can be renewed.

Extension of the innovation premium

The measure known as the “innovation premium” consists of a premium paid to creative employees to reward them for coming up with new ideas implemented within the company.

This premium can be granted to the employee free of social contributions and taxes provided that:

• it is granted for a novelty that represents genuine added value in relation to normal activities for the employer;
• the innovation is not the subject of a prior call for tenders or request for specifications for the purchase of products or processes addressed by a third party to the party granting the premium;
• the innovation is the subject of a prototype or an application for the manufacture of a prototype or there must be internal instructions indicating what changes the innovation will bring about in the company’s normal operations;
• the premium is not granted to replace or convert salary;
• the premium is only granted to employees with an employment contract;
• the amount per employee does not exceed the employee’s monthly gross remuneration per calendar year;
• the total amount of premiums paid for one calendar year does not exceed 1% of the wage bill of the company for that calendar year;
• it is awarded to a maximum of 10 employee per innovation project;
• the premium applies to a maximum of 10% of employees. In companies employing fewer than 30 employees, a maximum of 3 persons may receive the premium;
• the criteria, procedures and identification of the project within the company were disclosed as well as communicated to the Minister of Economy.

Takeaways

• As from 1 July 2023 until 30 June 2025 employees can perform (para)fiscally favourable relance hours again. These hours are exempted from social security contributions and income tax. Gross therefore equals net. Do note that there must be a clearly expressed written agreement from the employee before the overtime is performed. Companies must also be aware that they do not pay conventional overtime for these hours to avoid them being taxed after all.

• The possibility of granting the (para)fiscally favourable innovation premium was also extended. Here, it is important that companies follow the correct administrative steps before granting the premium.