Minimum salaries for foreign workers rise 33 percent

IMPACT – MEDIUM

What is the change? Romanian authorities have increased minimum salary levels for foreign employees by 33 percent as the country prepares for a new system in which employees, rather than employers, will be responsible for social security costs.

What does the change mean? Effective immediately, the minimum monthly salary for foreign workers on local payroll will be 4,162 Romanian lei (about € 895 or US$1,070). The minimum monthly salary for highly skilled workers (EU Blue Card holders) will be 16,648 lei. The change will apply to all work permit applications filed after or pending as of Jan. 6.

• Implementation time frame: Ongoing.
• Visas/permits affect: Work permits, EU Blue Cards.
• Who is affected: Companies employing foreign workers on local payroll, including workers holding EU Blue Cards.
• Business impact: Businesses may need to adjust their budgets to meet the new wage minimums.  

Background: As BAL reported last month, Romania is planning to shift a portion of the tax burden to employees and away from employers as part of  a new social security program in 2018. Authorities had previously announced that the domestic minimum wage would increase from 1,450 lei to 1,900 lei per month, an increase of 31 percent. Authorities announced the minimum wage rates for foreign workers this week.

BAL Analysis: The new wages mark a significant increase above 2017 levels. Employers should be sure to take the new wage minimums into account when planning their 2018 budgets. Applications that are not supported by the new wage minimums will be rejected.

This alert has been provided by the BAL Global Practice group and our network provider located in Romania. For additional information, please contact your BAL attorney.

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