Budget Law to regulate labour market

During the first Government session after the Budget Law is published in the Official Gazette, a decision aimed at compelling employers to increase the employees’ gross salaries, so that their net revenues should not decrease by the enforcement of the new 11.67% individual contribution, as settled by EO 49/2001, will be endorsed.

“The decision has already been drafted, but we are waiting for the state social security budget Law to be endorsed. This law settles the value of the coefficient used for calculating pension revenues and social security contributions quotas,” Marian Sarbu, Labour and Social Solidarity minister, said on Tuesday.

Once the welfare budget Law is endorsed, one will know the average gross salary that will be used to calculate the upper limit of social contributions. The stipulations of EO 49/2001, amending the pension law endorsed last year, state that individual contributions paid by employees will increase from 5% to 11.6%, while quotas paid by employers will decrease from 30% to 23.33%.

Employers are compelled to increase by at least 8.3% the gross salaries of employees working under normal conditions and earning less than 10 million lei monthly, which is the level of most salaries in Romania, so that the employees’ gross revenues should not decrease.

The Labour minister specified that employers, both private and state institutions, would have to comply with these normative acts, warning that the Labour Inspection Office over the next period will launch a large controlling action of economic agents in order to trace those who avoid enforcing the new regulations of the labour market.

According to the new law, the quotas of social security contributions were settled depending on the working conditions (normal, particular and special), as stipulated by 2001 State budget Law. These quotas will be worth 35%, 40% and 45% respectively.