Companies support the minimum wage increase from January 1, 2024

The business community supports raising the minimum wage, either in line with productivity or to counter the effects of inflation, but argues that an increase should be made from 1 January 2024, not 1 October 2023, as companies have already set their budgets of salaries for this year, the Concordia Employers' Confederation says in a press release.

The employers' confederation also presents the simulations carried out regarding the options currently being considered by the Government for raising the minimum wage.

If the gross minimum wage will increase to 3,300 lei from October 1 and there will no longer be a tax exemption for 200 lei, an employee will collect "in hand" a net minimum wage of 1,964, which is equivalent to an increase of 21 % compared to 2022. If the 200 lei are exempted from taxes, then the employee will take net 2,164 lei, which represents a 29% increase compared to last year.

In the version in which the minimum wage will increase to 3,750 lei from January 1, 2024 and there will no longer be a tax exemption for 200 lei, the net minimum wage will be 2,227 lei, which means an increase of 31% compared to 2022 If the 200 lei are exempt from taxes, then the employee will receive a minimum net salary of 2,427 lei, an increase of 36% compared to 2022.

Concordia recalls that, in the last decade, the growth rate of the minimum wage in Romania was the highest at the European level (both in nominal and real terms) (+12.9%).

We mention that recently, Florin Jianu, the president of the National Council of Small and Medium Private Enterprises in Romania, stated, during a press conference, that entrepreneurs are not opposed to the increase of the minimum wage in the economy, but they want this increase to mean more money that remain with the employees and no more money collected as income tax by the state.

Florin Jianu also said: "We have to start thinking about minimum wages by economic sector, depending on the activities carried out. You cannot set a minimum wage per economy of 3000 lei in the IT sector. Builders are also willing to pay more than the minimum wage in the economy. I think it's time to discuss minimum wages differentiated by economic sector".

We remind you that the Government intends to increase the minimum wage to 3,300 lei starting October 1, according to recent statements by Prime Minister Marcel Ciolacu and Finance Minister Marcel Boloş.

According to the data centralized by the Labor Inspectorate at the request of Economedia.ro, 1.5 million employees in Romania were paid in July 2023 with the minimum salary of 3,000 lei and almost 349,000 more with the minimum salary of 4,000 lei. Practically, of the over 5.6 million active employees in our country, in July 2023 over a third were officially declared as being paid the minimum wage in the economy.