No change in Romania’s minimum wage until new Government is formed

The level of the minimum wage in Romania will remain at RON 1,250 (EUR 275), the Government announced on Thursday, December 29. The future Government will establish a new value of the minimum wage. “The next Government will set the minimum wage in the economy for 2017,” the Government’s spokesperson Liviu Iolu said. The current Government, which has remained in place for a few more days after the president Klaus Iohannis rejected the proposal of the new parliamentary majority for the Prime Minister’s office, will not take any action for changing the value of the minimum wage. The value of the minimum wage was one of the recurring themes in the recent parliamentary elections. Liviu Dragnea, the leader of the Social Democratic Party (PSD), which won the elections with more than 46% of the votes, said that the minimum wage will increase to RON 1,450 (EUR 321) starting January 2017. Thus, the employees would get a net salary of RON 1,065 (EUR 235.7) instead of RON 925 (EUR 204.8) now. If the new gross minimum wage increases to RON 1,450, the total cost for the employer will amount to RON 1,783 (EUR 395), including the social contributions paid by the employer, compared to a current total cost of RON 1,538 (EUR 340.5). In practice, the increase will lead to a higher fiscal burden of about RON 100 (EUR 22.1) for each employee who is paid the minimum wage. Liviu Dragnea said that he wished to have a new government as soon as possible, to be able to implement the fiscal measures presented in PSD’s governing program. Some of them include eliminating health contributions for all pensions, reducing drug prices, including a 35% reduction in the price of the innovative drugs that have lost their patent or doubling student scholarships to RON 201 (EUR 44.2) per student. Romanian election winner wants coming tax cuts postponed to implement its own promises editor@romania-insider.com