Home News Belgium Named As Most Complex Country For Human Resources And Payroll

Belgium Named As Most Complex Country For Human Resources And Payroll

Belgium Named As Most Complex Country For Human Resources And Payroll

Belgium is the world’s most complex jurisdiction for human resources and payroll while Chile is the simplest, a new study published by TMF Group reveals.

The report HR and Payroll: Navigating complex requirements in turbulent times shows that the legislative complexity associated with managing HR and payroll varies considerably between different jurisdictions and does not necessarily correlate with legislative intricacy in other areas.

Belgium is considered the toughest country in terms of HRP for several factors: the most striking one is how employees working in the same industries are subject to different HRP policies depending on the region they work in. An additional layer of complexity is represented by dissimilar HRP rules applied to different sectors within the same region. Beside these regional and industry-level discrepancies, Belgium is one of the eight EMEA jurisdictions where employees receive regular mandatory pay increases. Furthermore, in Belgium paying a 13-month salary or bonus to a temporary employee/contractor is a standard policy across most industries, while this happens in just four other countries in the EMEA region. Belgian employees also receive a vacation payment, which corresponds to an extra 92% of their monthly salary, bringing the total of pay runs to 14 for white collar workers. Finally, Belgium is the only EMEA nation where payrolls must be submitted in multiple languages.

After Belgium, the next most complex countries for HR and payroll are Malaysia, China, Bolivia and France. All four are linked by a strong employee welfare system. Legally required benefits, such as social care/housing contributions or dental healthcare, are a true differentiator when they come to contracts and payroll policies.

By contrast, the simplest country for doing HR and payroll business was Chile, followed by the United States, Malta, The British Virgin Islands and Jersey, thanks to the degree of freedom companies have. In these jurisdictions, benefits such as a travel allowance are very rarely offered and pay increases are not mandatory.

Among some of the global points highlighted in this year’s report are:

  • The Americas – both North and South – are particularly employer-friendly, with 4 in 10 jurisdictions allowed to terminate underperforming employees by giving a day or less notice. Furthermore, companies are far more likely to be allowed to terminate employment without citing a reason in both South America (80%) and North America (64%). In contrast, this is only allowed in 13% of EMEA jurisdictions and it is not possible in any APAC jurisdictions.
  • Length of service and seniority play a different role depending on the region where an employee is dismissed: seniority is a much more significant factor in North America (43%), while length of service is more important in South America (40%) and EMEA (56%).
  • 61% of jurisdictions globally place limits on hiring foreign workers based on their country of origin. EMEA is the most likely to do so, with 77% of jurisdictions specifying requirements about country of origin. While free movement is encouraged between member states within the European Union, many governments place restrictive criteria on hiring from outside the trade bloc.
  • The HR Sector is experiencing a growing adoption of sex- or gender-specific policies. Taiwan and several other jurisdictions in APAC have rolled out menstrual leave policies to entitle female employees to a day’s leave per month, as well as leave entitlement for pregnancy check-ups.
  • While the Americas are much more likely to make it easier to hire and particularly terminate workers, jurisdictions in the region tend to be more employee-friendly when it comes to the ongoing provision of benefits and compensation.  In contrast, the vast majority of EMEA jurisdictions apply tax to benefits.

Adele Ewing, TMF Group’s Global Head of HRP, said: “2020 has been a particularly challenging year for payroll, dominated by the spread of the pandemic. Most jurisdictions have seen an increase in regulatory requirements as governments developed initiatives throughout 2020 to support employees and companies. HR and payroll professionals have been permanently exposed to a constantly evolving regulatory scenario while many have moved from a traditional office team environment to a remote one to enact these changes.  Covid-19 has accelerated already existing trends, such as smart working and remote working options, driving an increased focus on the well-being of their employees, with many of them introducing policies to support working from home options, inclusion and diversity.”

 

 

 

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