New taxation regime in Romania on labour payments
Overview
In November 2017, Romania’s government enacted Emergency Ordinance no. 79/2017, which modified the Romanian Tax Code. A significant change involved shifting the pre-tax contributions regime, transferring “the social security tax contribution burden from the employer to the employee.”
The government also adopted modifications to Law no. 62/2011 regarding social dialogue and implemented an increase to gross monthly minimum wages.
Principal Employer Responsibilities
Following these modifications, employers must fulfill several key obligations:
Collective Negotiation Requirements: Companies must initiate collective negotiations regardless of workforce size or existing collective bargaining agreements. This obligation applied during the period between November 20 and December 20, 2017.
Employee Representation: Employee representation became mandatory in any collective labour bargaining agreement negotiations.
Minimum Wage Increase: Beginning January 1, 2018, the monthly gross minimum wage increased from RON 1,450 to RON 1,900.