Romanian union leader: Companies will still pay some social contributions for their employees

Romania’s Government has changed its mind about fully transferring the social contributions to employees. It will only partially transfer these contributions to employees, namely 20% out of 22.7%, according to Cartel Alfa union’s president Bogdan Hossu. The contributions to special funds, such as the unemployment fund, the occupational risk fund, the wage guarantee fund, the medical leave, including the employer's obligations for special working conditions, will remain the employer’s responsibility, said Hossu. The measure will still have an impact on net salaries, according to the union representative. The union leader met with deputy prime minister Marcel Ciolacu, as well as with the labor, health, finance and justice ministers at the Government’s headquarters on Wednesday, September 20. After the meeting, Hossu also said that salaries in the public sector would increase by about 5% starting January 1, next year, although the Government announced a 25% increase. The Government plans to change the social contribution system in Romania and place the whole contribution on the employees. However, to do this without affecting the employees’ net wages, the Government needs to force employers to increase the gross wages by some 20%. The controversial measure has unsettled the business environment, but Social-Democratic leader Liviu Dragnea yesterday recommended that business owners in Romania read the initiative “from left to right” not backwards to understand that it will not lead to lower net salaries for employees or higher financial burden for employers. The social contributions (CAS and CASS) for normal work conditions currently amount to 39.25% of the gross wage, part of which is paid by the employer while the rest is paid by the employee but withheld and transferred to the state budget by the employer. The Government has recently announced that it will transfer all the social contributions to employees starting January 1, 2018. Romanian Govt. to oblige employers keep a certain level of the gross salary editor@romania-insider.com