■ Labor and Employment Issues

· Where can I find potential employees for my business?

One inexpensive way to locate potential employees is to contact the local Employment Agency about your needs. This state agency will then inform the unemployed of the vacancies. For mid-level and higher positions, the company can place ads in the local newspapers, or contact a local headhunter, or use the services of a private company to assist with recruiting for specific assignments, such as information technology recruitment.

· How much do I need to pay employees?

In Belgium wages generally are set by collective bargaining agreements negotiated between representatives of employers and employees. Each Industry has its own joint industrial committee which in turn will decide on any specific regulations, if any, regarding salary and work conditions above and beyond those specified in the collective bargaining agreements.

· Must Korean citizens pay social security in Belgium?

Belgium is negotiating a social security treaty with Korea, allowing Korean citizens who move to Belgium on a temporary basis (i.e. for not more than five years), to elect to stay within the Korean social security system, in which case no social security must be paid in Belgium. They also can choose to join the Belgian social security system for the period covering their stay in Belgium, in which case they will obtain all benefits of the Belgian social security system, including, without limitation, general health care coverage.

· How do I pay the employer’s social security contributions?

In Belgium, the employer must deduct the employee’s social security contributions and withhold applicable personal income tax from the wages. In addition, the employer will have to pay the employer’s social security contributions and premiums for the insurance against accidents in the work place.

Many employers use a private or semi-private agency to handle payroll services.

· How much are the social security contributions?

Currently, the employee’s contributions to social security amount to 13.07 percent of gross wages. The employer’s contributions are determined as follows:

Size of Company Blue-Collar EmployeeWhite-Collar Employee 1-9 employees39.15%33.15% 10-19 employees40.84% 34.84% 20 employees or more

Size of Company

Blue-Collar Employee

White-Collar Employee

1-9 employees

39.15%

33.15%

10-19 employees

40.84%

34.84%

20 employees or more

40.96%

34.96%

There are several employment programs reducing overall social security costs. The rates also can vary slightly, depending on the Industry sector.

· What is included in "social security" contributions?

Social security contributions cover a complete health care program for all the persons at charge (including sickness, disability, treatment in hospitals, dentistry and general and specialized health care), a pension fund, unemployment allowance.

Social security contributions must be paid to the national departments of Pension, Unemployment, Health Care, through a social security or payroll agency with which the employer is affiliated.

· Should I require written employment agreements?

In Belgium a written employment agreement is not legally required or mandatory as many employment aspects are regulated through various statutes which apply automatically (e.g., Law on the Employment Contract; Law on the Protection of the Salary; Law on the Protection of Women and Children; etc.).

However, it is useful, and probably advisable, to have a written agreement which will include specific items such as the working hours, salary, non-disclosure, etc. Additionally, certain provisions will not be enforceable unless they are in writing. Thus, a trial period is not valid, unless specified in writing prior to the start of the employment (see further below). Post-employment non-compete restrictions also must be in writing (see further below).

· Can I hire employees on a trial basis?

If in writing, an employment relationship can commence with a certain trial period during which the employee can be terminated on very short notice and without any further indemnification liability for the employer.

For white-collar employees, the trial period is at least one month and, if the salary does not exceed EUR 29,4006,000 per year, can be up to six months. If earning more than EUR 29,400 per year, the trial period can be up to one full year. For blue-collar employees, the trial period is at least seven days, but cannot exceed 14 days.

· How can I terminate an employee?

An employee can always be terminated either for urgent cause (breach of contract, serious fault) or for no cause. In the first case, it can be done without a notice period or a severance. In the second case certain mandatory rules regarding notice and/or severance shall be observed.

· What are my liabilities for terminating an employee?

Except for a termination for urgent cause, a notice period should be observed during which the employee continues to work for the employer. No additional severance must be paid, except for the payment of the vacation pay still due at that moment.

If for one reason or another continuation of work is not possible or desirable, a severance will have to be paid equal to the salary the employee would have received if he continued to work for the employer.

As a result of recent legislative changes, employees earning EUR 48,983.64 per year or more now may agree at the commencement of the employment on the extent of the termination notice or severance payment, provided it is not less than the statutory minimum requirement of three months’ notice or severance pay for every five years of commenced employment.

· How can I impose non-compete restrictions?

Non-compete clauses are valid only if (i) entered into in writing, (ii) prior to the commencement of the employment, (iii) the employee earns at least EUR 24,491.82 per year and (iv) the non-compete is limited in geographical scope (i.e. not for a territory larger than Belgium, except in very specific situations) and in time (i.e. in any event not longer than one year).