Gov’t modifies Labour Code via Emergency Ordinance, introducing a minimum salary differentiated based on education level and seniority. Opposition and business environment criticize the measure

On Friday, the Government amended the Labour Code via Emergency Ordinance, introducing a minimum salary differentiated on the basis of education level and seniority. The level of the gross minimum salary will be established subsequently, via Government Decision. The Government approved on Friday an Emergency Ordinance amending a series of legislative acts, including the Labour Code, Law no.53/2003 and Law no.279/2005 on on-the-job apprenticeship. “One of the amendments to the Labour Code seeks to create the legal framework for establishing the gross minimum salary in relation to criteria concerning the employee’s level of education and seniority. The level of the differentiated minimum salary for certain categories of employees will be established via Government Decision: for employees employed on positions requiring higher education, as well as for those whose seniority surpasses a certain level,” Labour Ministry representatives announced. Another amendment brought to Law no.53/2003 gives women the possibility to choose, in writing, to continue their activity until the age of 65, in line with Constitutional Court Decision no.387/2018. At present, the individual labour contract legally ceases the moment the retirement conditions are met, namely the standard retirement age and the minimum contribution period. Likewise, following the amendments brought to Law no.279/2005 on on-the-job apprenticeship, persons who graduated primary education and are registered with the National Employment Agency, but also other categories of persons, will have access to level 1 apprenticeship programmes (general knowledge and basic skills). “The goal of the measure is to urgently lower the labour deficit at national level, but also to improve the knowledge, skills and competences necessary to get a job. Thus, persons with primary education can enrol in the classes too,” the Labour Ministry’s representatives add. Labour Minister Lia Olguta Vasilescu has announced that the minimum salary will be hiked on December 1st to RON 2,080 for employees without higher education and to RON 2,350 for employees with higher education.   Reactions   USR: Differentiated minimum salary, a poisoned apple from Olguta Vasilescu and Eugen Teodorovici, two ministers who do not understand how the real economy works   Save Romania Union (USR) states that the differentiated minimum salary is a poisoned gift from Olguta Vasilescu and Eugen Teorodovici, two ministers who do not understand how the real economy works, because this decision will generate employment problems for Romanians with higher education and for those with more than 15 years of seniority. “The differentiated minimum salary is in fact a poisoned apple from Olguta Vasilescu and Eugen Teodorovici, two ministers who do not understand how the real economy works. Applying the differentiated minimum salary will lead to a series of employment problems for Romanians with higher education and with seniority of more than 15 years, because they will become more expensive on the labour market,” the USR explains. House lawmaker Cristian Seidler warns that the new policy on a minimum salary differentiated based on seniority will block Romanians having more than 15 years seniority from changing their jobs. “What importance does 15 years of experience as salesperson have when you get a job as driver or clerk, or accountant? None,” he points out. “Instead of encouraging especially unqualified workers with many years of seniority to enrol in professional training courses in order to find better-paid jobs, the PSD-ALDE Government is encouraging professional stagnation, paid for by private employers. This is Olguta Vasilescu’s vision, the Labour Minister who has worked for the state all her life. And the real reason for the Government’s approval of the hiking of the minimum salary based on education level and seniority is to attract more budget revenues in the form of taxes, considering that there is the danger of overshooting the budget deficit [target],” the USR claims. “Less than 200 days left until the next elections, when we can give the PSD a lesson,” the USR concludes.   PNL’s Orban: Gov’t shouldn’t have anything to do with establishing the gross minimum salary   National Liberal Party (PNL) President Ludovic Orban stated on Friday, after the Government adopted the Emergency Ordinance introducing the differentiated minimum salary, that the Executive should have nothing to do with establishing the gross minimum salary. “PNL’s official position on the minimum salary is that the Government shouldn’t have anything to do with establishing the gross minimum salary. The decision mustn’t be administrative-political, taken by the Government, the decision regarding the minimum salary must be the result of negotiations between employers and unions, between social partners, and it must be based on objective economic indicators that would prevent fluctuations. More precisely, you either establish the economic growth, or the growth of the gross average salary, or the productivity index, the option we prefer, on economy branch. And the raising of the minimum salary, in our view, must be done per economy branch, based on the productivity growth index, through negotiation between employers and unions. As long as it remains at the Government, the decision will be subjective and won’t be based on considerations of economic nature but solely on considerations of political-electoral nature,” Ludovic Orban stated at a press conference.   CCIFER: Minimum salary modifications may affect the entire national economy; SME test is mandatory   In the form announced by the Government, the modifications to the minimum salary may affect the entire national economy by raising labour costs, which will eventually be reflected in price hikes, the representatives of the French Chamber of Commerce, Industry and Agriculture in Romania (CCIFER) point out in a press release. “The French Chamber of Commerce, Industry and Agriculture in Romania (CCIFER) warns that in the form announced by the Government, the modifications to the minimum salary may affect the entire national economy by raising labour costs, which, in the end, will be reflected in price hikes. These modifications, announced in a very short time horizon, impact fiscal predictability and stability,” the press release points out. According to the representatives of French investors in Romania, such a measure affects the ability of companies – especially SMEs – to appropriately adjust their budgets, which...

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