Difference in wage cost between worker and clerk
In 2014, the so-called "Unitary Statute" went into effect. This aimed to eliminate the differences between blue-collar and white-collar workers. Although in many areas the differences have been eliminated, the difference in wages - and thus in payroll costs - between the two statutes still exists.
First, a step back: what determines whether an employee is a laborer or a clerk? The Labor Contracts Act states that a laborer primarily performs manual labor and a clerk primarily performs principal labor. If an employee performs both types of labor, it must be assessed which activity is predominant in his job. Which activity has the predominant role in your job is more decisive than which activity the most labor time is spent on.
Now what are the differences in wages and payroll calculations?
1. Hourly wage versus monthly wage
The main distinction between laborers and white-collar workers is wages. Laborers have an hourly wage, while white-collar workers have a monthly wage. On top of that, workers are only paid wages for the hours they actually worked. This means that in a month with fewer working days (February, for example), a worker will also receive less pay. In contrast, white-collar workers receive the same wage every month.
Among other things, the fact that a worker only receives pay for hours actually worked has an impact on the payment of ADV days. For example: a worker should normally work 38h per week, but works 40h each week. As compensation, the worker receives 12 ADV days. The worker's weekly wage is equal to 40 times his/her hourly wage, as they effectively worked 40h. When taking the ADV day, the worker does not provide any services and will therefore receive no pay. In contrast, a white-collar worker will be paid his/her normal wage when taking his/her ADV day.
2. Patron social security contributions.
Another point of difference is the social security contributions you pay as an employer on a worker's and clerk's wages. The contribution rate on a worker's salary is significantly higher. This is because workers tend to be exposed to more risks and because vacation pay is included in social security contributions (see below).
In addition, for blue-collar workers, you have to pay patronage social security contributions at 108% of the worker's gross pay. For white-collar workers, this is only at 100% of gross pay.
3. Vacation pay
Workers do not receive their vacation pay directly from their employer, but rather once a year from the National Office of Annual Vacation. Vacation pay is of course financed by the employer, albeit indirectly. The so-called "vacation contributions" are contained in the percentage of employer social security contributions (see earlier). The vacation contribution rate is equal to 15.84% on the worker's total gross pay. This percentage is divided into a quarterly contribution of 5.57% and an annual contribution of 10.27%.
Clerks do receive his vacation pay directly from the employer. The single vacation pay corresponds to the normal pay for the vacations and is paid on the days the employee takes vacations. Double vacation pay amounts to 92% of the monthly wage in which the employee takes his main vacation and must also be paid in that month.
4. Guaranteed sick pay
A final distinction between blue-collar and white-collar workers is in the payment of guaranteed income in case of illness. If a white-collar worker is disabled, as an employer you pay the white-collar worker's normal wages for the first 30 days. In contrast, white-collar workers are only entitled to 100% of his gross wages for the first 7 days of illness. From day 8 through day 30 of illness, the employer pays only a chunk of the worker's normal wage. The rest is supplemented by benefits from the health insurance fund.