New amendment regarding the minimum gross wage

On December 16, 2019, there was published in the Romanian Official Gazette, Part I, no. 1010, the Government Decision no. 935/2019 (“GD no. 935/2019”) for establishing the minimum gross wage guaranteed at national level.

As per the GD no. 935/2019, starting from 1st January 2020, the minimum gross wage was increased to 2,230 RON monthly, from 2,080 RON which it was in 2019.

In order to reach this increase by 7.2%, the Government took into consideration a calculation formula based on the inflation rate and the real increase in labor productivity per person, but also correction factors depending on the dynamics of economic growth.

Besides the economic factors, in determining the minimum gross wage at national level, there was also considered the need to reduce the number of employees at risk of poverty and social exclusion.

Also, GD no. 935/2019 provides that the minimum wage is different for persons who have a higher education level, with a work experience of at least one year in the field of higher education, whose minimum wage will be kept at the same level as in 2019 (i.e. 2,350 RON).

According to Government representatives, the increase of the minimum gross wage can have positive effects on employment in sectors where there is a demand for an increased workforce, due to the fact that work becomes more attractive for certain categories of employees. At the same time, one of the effects of increasing the minimum gross wage is to increase the level of social contributions.

The average monthly duration of the monthly working time, is provided for in the aforesaid government decision at the same level as in 2019, namely of 167,333 hours/month.

GD. no. 935/2019 was published in the Official Gazette, Part I, no. 1010, dated December 16, 2019 and is in force with full legal effects as of 1st of January 2020.