After almost 13 years, the Social Penal Code (already) needed a thorough update, to be adapted to today’s challenges. As a result, on 21 June 2024, the Act of 15 May 2024 amending social criminal law and various labor law provisions (hereinafter referred to as 'the Act') was published in the Belgian Official State Gazette.

Below, we highlight the main changes.

1. Definition of social dumping added:

First, the Social Penal Code now includes a definition of “social dumping”, i.e.: "a wide range of intentionally abusive practices and the circumvention of existing (…) legislation (…) which enable unfair competition by illegally minimizing the labour and operation costs and lead to violations of workers’ rights and exploitation of workers". The purpose is to highlight that the fight against social dumping is one of the priorities of the government.

2. Secrecy of the administrative inquiry

The Social Penal Code now also provides the secrecy of the administrative inquiry, similar to what already exists for criminal inquiries. This way, the legislator wants to avoid that certain (administrative) acts of investigation would already become public before any potential criminal inquiry. It thus applies to the acts of investigation made on the own initiative of the social inspectors.

3. Increased administrative and criminal fines for penalty levels 3 and 4

The initial proposal provided for an additional sanction category of level 5, but this has finally not been retained.

However, the amount of the (administrative and criminal) fines of level 3 are doubled. In addition, the maximum amount of the administrative fine of level 4 is increased by 500 euros and the criminal fine is increased by 1,000 euros.

This results in the following amounts (incl. multiplication by the current factor of 8 (“opdeciemen” / “décimes additionnels”):

 4. Conversion of imprisonment into criminal fines for legal entities

The Social Penal Code applies to both natural persons and legal entities. However, in practice, an imprisonment as provided for at level 4 (i.e., imprisonment ranging between 6 months and 3 years) cannot be applied to legal entities. According to the general conversion rules of criminal law already applied in this respect, the Social Penal Code now also explicitly includes those conversion rules. In particular, criminal courts can impose a criminal fine ranging between a minimum of €24,000 and a maximum of €576,000, in lieu of imprisonment towards legal entities.  

5. New additional sanction: prohibition on participating in public tenders or on obtaining concessions.

Besides the exploitation ban, professional ban, and business closure (which were already provided in the Social Penal Code), the judge can now also impose a prohibition to participate in public tenders or on obtaining concessions for 3 to 5 years (i.e., only possible for infringements that are punished with a sanction of level 3 or 4).

Aggravating factors

In case of an infringement of level 4, that has been committed deliberately, the judge must consider this as an aggravating factor when choosing the sanction amongst those, provided for level 4 as well as when choosing specific criminal sanctions.

At the same time, the use of physical or psychological violence against or threatening of a social inspector becomes an aggravating factor, to be considered by the judge when choosing a sanction of level 4 or a special criminal sanction as well as by the competent administration when determining the amount of the administrative fine of level 4. As a rule of thumb, collaboration and respectful attitude towards the social inspectors will be absolutely recommended, i.e., also in case you consider their allegations/method of work as incorrect/inappropriate. 

6. New infringements

The Act also introduces several new infringements, such as non-compliance with the rules on flexible working schedules (“glijdende uurroosters” / “horaires flottants”), mandatory allowance for work clothing, providing work tools, eco-vouchers, holiday certificate, etc.

The Social Penal Code now also provides that in case of a condemnation for fraudulent submission to the employee’s social security scheme (sham-employment), the paid social security contributions remain acquired by the National Social Security, which does not need to reimburse them. 

7. Increase or decrease of sanction levels

For several infringements, there is an increase of the sanction level, such as for: non-payment or late payment of (minimum) wages, violation of the notification and information obligations in case of collective dismissal, non-payment of various contributions to the NSSO or other bodies such as Fedris or Funds for Welfare, … The Act even increases the sanction for the abuse of the title of “Fonds voor Bestaanszekerheid” / “Fonds de sécurité d’existence” as well as “payroll office” (“sociaal secretariaat” / “secrétariat social”) from level 1 to level 4.

Other infringements are abolished since they are minor infringements and more of an administrative nature (e.g., non-compliance with certain administrative obligations regarding part-time work, disciplinary sanctions, … etc.).

When does it come into effect?

Attention! The provisions of the Act do not all come into effect on the same date. For some provisions, the specific timing still needs to be determined, while others will already enter into force 10 days after the publication in the Belgian Official Gazette, i.e., on 1 July 2024.

Questions?

Companies might face additional risks as a result of this reform. Therefore, it is important to be aware of the changes. The employment law team of KPMG Law is happy to assist you with any questions you may have in this regard.