Romania's Govt. adopts emergency ordinance to correct fiscal measures’ effects

Romania’s Government adopted on Thursday an emergency ordinance that will help maintain the net salaries of software programmers, researchers, seasonal workers and disabled employees, the categories of employees most affected by the fiscal measures that became effective on January 1 this year. The emergency ordinance also aims to preserve the net revenues of part-time workers in the public and private sector, who were also heavily impacted by the recent tax measures. The Government decided that part-time workers will pay social contributions only for the gross revenues they actually make. Last year, the Government increased the social contributions for part-time work contracts to the level of a full minimum wage. Starting January 1, when the social contributions were transferred from employers to employees, some part-time workers had to pay social contributions that were even higher than their gross revenues, which means they had to pay from their own pocket to continue working part-time. The Government is now trying to correct this by allowing these employees to pay social contributions for what they actually make but their employers will have to cover the difference up to the contributions for a full minimum wage. At the same time, the Government decided to help several categories of employees whose net revenues declined after the social contribution transfer, on January 1. These include software programmers, whose net salaries declined even if their employers increased their gross wages by 20% in January. To keep the net salaries at the same level as last year, companies that hire software developers would have had to increase the gross salaries by more than 20%, which would have added to their personnel costs. The Government promised last year that the social contribution transfer would not have any negative impact on employees or employers. To make this happen in the case of programmers and several other categories, the Government has come up with this emergency ordinance by which it takes it upon itself to pay part of the social contributions for these employees from the state budget, based on a formula. However, fiscal consultants say this measure is discriminatory, as some companies have already increase the wages by more than 20%. Romania’s labor minister defends Govt.’s wage policy amid controversies Romania’s labor minister blames employers for wage declines in private sector editor@romania-insider.com