Employers in Romania will no longer have to pay foreign workers the country’s average gross salary or more due to a new law that cuts the mandatory minimum for non-European Union (EU) employees to the minimum wage.
The move follows requests by hotel and restaurant owners to the government this summer to amend legislation in order to allow more foreigners from outside the EU to be employed on lower wages. The aim is to enable businesses, including those in the construction sector, to bring in workers from low-income countries in Africa or Asia, who can expect to be paid less than Romanian workers, according to Business Review.
The new legislation means that it will no longer be necessary to pay non-EU workers a salary starting at RON1,162 (US$283.78) net instead of the national average of at least RON2,500 (US$610.54) net. In Romania, the lowest wages are currently paid in hotels and restaurants, at an average of around RON1,400 (US$610.54) net.
Foreigners coming to Romania as au pairs will also have their right to extend their temporary residence for work purposes - as long as their working hours do not exceed 25 hours per week and their salary is at least the minimum gross national salary, pro rata. To do so, they need to submit their individual part-time employment contract, which must be listed on the General Register of Employees.
In the case of highly qualified workers though, employers are required to pay them salaries that are at least twice the gross national average.
At 41.5%, Romania has the highest effective tax rate in Central and Eastern Europe, according to an analysis by Deloitte Romania.
Raluca Bontas, partner for global employer services at Deloitte Romania, told Business Review that Romanian employees’ wages were proportionately lower than those of workers in other states in the region because their income tax and social security contributions were higher.
“Therefore, we might expect that high taxation would also result in a higher quality of life as the employee invests more into public education, health, infrastructure etc,” he said. “However, the world rankings for these aspects show the opposite, with low levels of efficient public spending."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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Employers in Romania will no longer have to pay foreign workers the country’s average gross salary or more due to a new law that cuts the mandatory minimum for non-European Union (EU) employees to the minimum wage.
The move follows requests by hotel and restaurant owners to the government this summer to amend legislation in order to allow more foreigners from outside the EU to be employed on lower wages. The aim is to enable businesses, including those in the construction sector, to bring in workers from low-income countries in Africa or Asia, who can expect to be paid less than Romanian workers, according to Business Review.
The new legislation means that it will no longer be necessary to pay non-EU workers a salary starting at RON1,162 (US$283.78) net instead of the national average of at least RON2,500 (US$610.54) net. In Romania, the lowest wages are currently paid in hotels and restaurants, at an average of around RON1,400 (US$610.54) net.
Foreigners coming to Romania as au pairs will also have their right to extend their temporary residence for work purposes - as long as their working hours do not exceed 25 hours per week and their salary is at least the minimum gross national salary, pro rata. To do so, they need to submit their individual part-time employment contract, which must be listed on the General Register of Employees.
In the case of highly qualified workers though, employers are required to pay them salaries that are at least twice the gross national average.
At 41.5%, Romania has the highest effective tax rate in Central and Eastern Europe, according to an analysis by Deloitte Romania.
Raluca Bontas, partner for global employer services at Deloitte Romania, told Business Review that Romanian employees’ wages were proportionately lower than those of workers in other states in the region because their income tax and social security contributions were higher.
“Therefore, we might expect that high taxation would also result in a higher quality of life as the employee invests more into public education, health, infrastructure etc,” he said. “However, the world rankings for these aspects show the opposite, with low levels of efficient public spending."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
OTHER ARTICLES THAT MAY INTEREST YOU
Knowing your labour laws in Romania
Minding your manners in Central Europe
