Romania: New Minimum Wage to Apply in Romania Starting 1st of July 2024
After the Government held rounds of negotiations with representatives of the union and employer organizations regarding the increase in the minimum wage guaranteed for payment, a new Government Decision was issued establishing the monthly gross minimum wage as of July 2024 to be RON 3,700 (approximately EUR 743).
The increase in the minimum wage comes as a result of the Government making steps towards implementing the EU Directive No. 2022/2041 on adequate minimum wages in the European Union. The new minimum wage does not reach one of the levels that the Directive expressly mentions–50 % of the gross average wage and further increases are expected at the end of 2024 or at the beginning of 2025. Romania also considers establishing an entirely new mechanism for setting the minimum wage by setting minimum wages for different sectors of the industry in order to comply with the scope of the Directive. At this time, only employees involved in the construction sector benefit from a higher minimum wage of RON 4,582 (approximately EUR 921), while the minimum wage for employees in the agriculture and food sectors which was previously higher than the national minimum wage, will not increase on 1 July 2024 (and is going to be the same as for the other employees in the general economy).
Practical point
A direct effect of the increase in minimum wage is the fact that all employees who have lower wages will benefit from the new minimum level. In addition, employers should keep in mind that employees cannot be remunerated with the minimum wage for a period of time of more than 2 years, and they should also keep this in mind when implementing the new minimum wage.
Not complying with the obligation to ensure the minimum wage could lead to administrative fines or, in specific cases, criminal penalties for the employer.
