New taxation regime in Romania on labour paymentsE

Bucharest, 11 December 2017

In November 2017, the Romanian Government has issued the Emergency Ordinance no. 79/2017 adding important modifications to the Tax Code, including but not limited to the pre-tax contributions regime which now places the social security tax contribution burden on the employee and no longer on the employer.

Similarly, the Government has recently adopted: (i) new modifications to the Law no. 62/2011 regarding the social dialogue in view of the application of the Emergency Ordinance 79/2017, and (ii) the increase of the gross monthly minimum wages in Romania.

As a result of such new legal modifications, the employer has the following principal mandatory responsibilities:

• The obligation to commence collective negotiations. Such obligation is effective regardless of the number of employees and irrespective of the fact that the company has entered into collective bargaining agreements. The obligation to commence collective negotiations is for the period between November 20, 2017 and December 20, 2017.
• Employees representation in the collective labour bargaining agreements negotiations.
• Gross Minimum Wage Increase. Starting on January 1, 2018, the monthly gross minimum wage shall be increased from RON 1,450 to RON 1.900.