Minimum wage on the rise in Romania
The Romanian government has decided to increase the minimum wage at national level, a step towards the adoption of the European minimum wage, planned for November
Sorin Iordan, 07.06.2024, 14:00
The minimum wage per economy in Romania will go up as of July 1, the Bucharest Government has announced. Its value will increase from 3,300 lei per month (about 660 euros) to 3,700 lei (about 740 euros). It’s a net increase of 284 lei (57 euros), money that people will receive in August for the month of July. Currently, in Romania, about 760,000 employees, representing 13.9% of the total number of employees, receive the monthly gross minimum salary of 3,300 lei, and the Government estimates that, starting early July, more than 1,870,000 employees will receive higher salaries.
However, this decision does not apply to employees in agriculture and the food industry, as other legal provisions in force apply to these categories. Moreover, the amount of 200 lei (approximately 40 euros) from the minimum wage, which was exempt from tax and mandatory social contributions, will be increased by another 100 lei (approximately 20 euros).
The Romanian Minister of Labour, Simona Bucura-Oprescu, has stated that the increase in the minimum wage will have positive social effects, on the one hand by stimulating employment in sectors where there is demand for labor and reducing undeclared work and on the other at economic level, as it will lead to an increase in consumption, and that will also influence imports of consumer goods. According to her, the initiative is meant to improve the standards of living for Romanian employees and reduce poverty. At the same time, Oprescu has stressed that the increase in the gross minimum wage per country guaranteed in payment also entails getting closer to the level required by the EU Directive 2041 of 2022 on Adequate Minimum Wages in the European Union. In addition, she said, from the experience of the past years, the increase in the minimum wage also brought a vertical increase in almost all categories of wages, not just the minimum ones.
The increase in the minimum wage will bring the hourly rate in Romania to the level of 22,024 lei/hour (about 4.42 euros/hour) for a normal work schedule of 168 hours/month on average.
In turn, the head of the Romanian Government, Marcel Ciolacu, has stated that the Ministry of Labor is already working together with the stakeholders on the mechanism that will introduce the European minimum wage in Romania by November and that the established formula will take into account the purchasing power, the level of the average gross wage and labor productivity.
The prime minister has also announced that the new law on unitary wage payment, an important milestone in the National Recovery and Resilience Plan, will be implemented as of next year and is closely linked to the reform of the budget and fiscal system. The purpose of the law is to provide equity and transparency in the remuneration system for employees in the public sector. Thus, the increases will be capped at 20% and no salary in payment will exceed that of the President of Romania, who receives a gross salary of 25,000 lei (approximately 5,000 euros) per month. (MI)
