Employers’ associations stated on Tuesday at the Tripartite National Council for Social Dialogue that they do not intend to cut the employees’ wages, all the more since the provisions of the new Tax Code bring many facilities to the business environment, Labour Minister Lia Olguta Vasilescu stated on Wednesday in Parliament, after participating in the Conference for Francophone Women.
“I believe I have explained a thousand time that the gross becomes the employer’s total spending, as you have seen in the case of the government decision in the case of the minimum wage. Because the gross, according to the governing programme, should have been 1,550 lei, but is 1,900 lei precisely because the employer’s total spending becomes the new gross. As a matter of fact, I would like to tell you that we held the Tripartite Council yesterday in which all the leaders of the national confederations and employers’ associations participated. Mr. Hossu, as he does every time, is misconstruing our words. The same as he did yesterday with what we and the representatives of the employers’ associations said. The moment the premier asked the representatives of the employers’ associations point blank, so as to avoid any misinterpretation, if they intend to cut the wages in the economic milieu, they all replied that they have no such intentions. All the more since the provisions of the new Tax Code bring many facilities to the business environment,” Lia Olguta Vasilescu said when asked about the possibility of net wages dropping by 16 percent, in case the employers do not increase the employees’ gross salary by 20 percent.
She recommended the trade unionists in the National Union Bloc learn mathematics.
Moreover, the Labour Minister underscored that salaries of the category of people who make revenues from independent activities will not drop either.
“In fact, I ask you to corroborate all these increases that we are carrying through in the minimum wage area, but not only, because automatically, by becoming gross salary, the employer’s total spending will measure up against the other wages, with the deductions that we are making and you will see that salaries will not go down at all, not even in the case of those making revenues from independent activities, in whose case the net will also increase by 7.1 percent,” Lia Olguta Vasilescu stated.
In this context, she specified that the introduction of a provision according to which employers commit not to cut the employees’ salaries is no longer necessary.
Cartel Alfa head: Income tax cut to 10 pct, yet employee-paid social security taxes rise to 35 pct
The income tax will drop from 16 to 10 percent, but at the same time social security taxes will increase from 16.5 percent to 35 percent, president of the ‘Cartel Alfa’ National Trade Union Confederation Bogdan Hossu said on Tuesday, upon leaving the meeting of the Tripartite National Council.
“The wage won’t be cut, because according to the law in force, we are talking about a gross wage. The trouble is that following the transfer, the gross wage stays the same, but the tax rate charged on the worker increases. It’s true, the income tax goes down from 16 percent to 10 percent, but at the same time the social security taxes charged on the worker rise from 16.5 percent to 35 percent. From this point of view, there is a rise in taxation that will reflect not in the gross wage amount, but in the net wage the worker takes home. The employers have not firmly pledged growth, the government relies only on a promise and the good intentions about that, but we are talking about 3 million, not the employees who collect today the minimum national wage and who will see an increase of 97 lei in net, we are not talking about the public sector, which is in for a 25 percent increase, which actually means a net increase of about 4 percent, but we are talking about the rest of Romania’s workers who will be affected,” Hossu explained.
He added that the employers’ side has approved all government measures.
“At the National Tripartite Council, the employers’ side has rather pompously approved all the governmental measures. The issue raised by the unions, on their part, is that we obviously do not oppose the increase of the minimum national wage, but we want it clearly stated that the minimum guaranteed wage is the basic wage with no other bonuses or additions, as it was this year,” Hossu said.
The union leader also talked about the tax reform project, stating that it is riddled with serious deficiencies and the government “doesn’t intend to issue a circular requiring all employers in the country to raise wages.”
Last but not least, Hossu also showed that several categories will no longer pay the 10 percent health security contribution and the list of subsidized medicines will grow shorter, as will the set of free services.
PM Tudose says wages will not decrease after pay of contributions switches to employees
Prime Minister Mihai Tudose and Finance Minister Ionut Misa told a meeting on Tuesday of the Tripartite National Council for Social Dialogue that switching the pay of some social security contributions from employers to employees in 2018 will not have a negative impact on wages, either in the public or in the private sector.
According to a Government press statement, the central topics of the talks held at the Government House between the prime minister, Cabinet members and leaders of the major confederations of trade unions and employers’ associations in Romania, in the format of the Tripartite National Council for Social Dialogue, were a draft emergency ordinance amending the Tax Code, with emphasis on switching the pay of social security contributions from employers to employees, and an increase in the minimum wage.
About switching the pay of some social security contributions from employers to employees in 2018, Prime Minister Mihai Tudose and Finance Minister Ionut Misa reiterated that this measure will not have a negative impact on wages, either in the public or in the private sector.
“We have talked with business leaders and wages will increase. The business community told me there was an opportunity to pay people better,” said Tudose.
The statement says the employers’ associations rated the idea “a very good measure,” while the trade unions stated themselves in favour of keeping the legislation on the pay of the contributions as it is.
At the same time, an increase in the minimum wage to 1,900 lei starting next year, according to the objectives in the governance programme, was agreed by the trade union leaders and met no opposition from the employers, who mentioned the need for infrastructure development, especially in the areas of transport and agriculture, for the optimal exploitation of Romania’s potential in terms of business development.
Tudose announced that the incumbent government is considering a paradigm shift in transport infrastructure, and mentioned a meeting the same day with World Bank officials.