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Gov’t adopts GEO introducing the minimum differential wage. Foreign companies in Romania react

The Government has adopted in its Friday sitting an emergency ordinance that stipulates the amendment of the Labour Code by introducing the minimum differential wage.

The minimum wage will thus vary according to the studies of the employees. After being published in the official Gazette, the Executive is expected to approve a resolution mentioning the sums for those differential salaries. The measure is to be enforced as of December 1.

The amendments operated on the Labour Code intend to create a legal framework to set the guaranteed minimum gross wage countrywide by reporting to the level of the studies and the seniority,” reads a press release issued by the Labour Ministry. More precisely, the employees who graduates universities and those who had a higher seniority will have higher salaries.

The emergency ordinance was not on the official agenda of the Executive in today’s sitting.

Finance minister Eugen Teodorovici announced in Parliament yesterday that the Government might discuss the ordinances on the minimum differential wage and on the establishment of the sovereign funds if the drafts are getting all the necessary opinions.

Last week, Labour minister Olguta Vasilescu had heralded that the minimum wage would rise as of December 1 and that it would vary according to the studies.

The minimum wage would increase from RON 1,900/month up to RON 2,080, and up to RON 2,350 for the employees with higher education and who have a minimum 15 years seniority.

French businessmen in Romania slam the measure

The French Chamber of Commerce, Industry and Agriculture in Romania (CCIFER) has promptly retorted to the new measure, warning that amending the minimum wage could affect the entire economy through the increase of the workforce costs, which will end up by reflecting itself into the price rise.

The French investors also argued that these amendments, announced at such a short notice, impact on the fiscal predictability and stability, while also affecting the ability of the SMEs to properly adjust their budgets that are established since the end of the previous year.

Another issue is prompted by setting the minimum wage according to the seniority, which will create an excessive red tape, while representing a new argument to the disadvantage of the performance.

CCIFER considers that the financial incentives for the seniority must be regulated through the seniority pay and granted based on the negotiations between the social actors, in compliance to the economy realities and to each industry and company operating on the market.

We also voice our concern regarding  the lack of sustainability of the salaries in the state sector, as the ordinance does not mention the source of the funds to endorse this increase, considering that the public administration employees represent 26% on the average out of the total number of employees on the Romanian labour market and rank in the top three positions on the highest pays,” says the CCIFER.

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