Nearly forty percent of employees in Romania are paid salaries that are only slightly above the minimum wage threshold.
Romania has taken a significant step towards improving overall employment conditions by adopting Emergency Ordinance 142/2021. This new law, passed by the Romanian Parliament, limits the duration of minimum wage employment to two years. The ordinance came into effect on January 1, 2024.
The ordinance affects over 2.6 million employees in Romania, representing more than 39% of the total number of labor contracts. According to data reported by daily Ziarul Financiar and obtained from the Labor Ministry, approximately 1.06 million employees are currently paid the minimum wage, which equates to 16% of total labor contracts.
The ordinance does not exempt any employer from the two-year limit on minimum wage employment, whether full-time or part-time. It applies to all employees in Romania, regardless of their work schedule. After two years, employees cannot be maintained on the minimum wage.
The ordinance aims to encourage employers in Romania to provide higher wages for their employees after two years. It is hoped that this will lead to a reduction in the number of employees earning the minimum wage in Romania.
It's important to note that the number of employees earning just above the minimum wage (RON 4,050 - 4,100) is 1.63 million. This suggests that a significant portion of the workforce is close to the minimum wage, and the ordinance could potentially have a significant impact on their income.
In conclusion, Emergency Ordinance 142/2021 is a significant change in employment law in Romania. It aims to improve employment conditions by encouraging higher wages and limiting the duration of minimum wage employment. The full impact of the ordinance remains to be seen, but it is a positive step towards improving the overall employment landscape in Romania.
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