Increasing minimum wage to RON 2,050 to impact the 2019 salary budget for 19 pct of employers

Newsroom 26/09/2018 | 11:43

Around one in five (19 percent) Romanian employers had built their 2019 salary budget taking into account a minimum wage of RON 1,900 per month, similarly to 2018. Their strategies now have to be updated due to the government’s decision to increase the minimum wage to RON 2,050 from January 1.

“The current government does not consult with the business community when making a decision with an economic impact and the fact that almost one in five employers have taken into account the level of RON 1,900 per month for the 2019 budget, as in 2018, shows that companies will suffer as a result of this measure. This could mean that the company’s 2019 salary budget will be the same as in 2018, but the number of employees may not remain the same,” says Florin Godean, country manager, Adecco Romania.

According to survey results, more than one third (34 percent) of Adecco’s client employers said most of their wage earners were above the minimum wage level, so for this category of companies, taking into account a certain minimum wage in 2019 has no impact.

At the same time, a quarter (24 percent) of respondents said they still do not have a budget set for 2019, so they have not made any calculations for the time being.

“The impact of these spontaneous increases in the minimum wage over the past two years, which have become the norm, will sooner or later be seen in the economy. Companies, especially large ones, have to set their budgets at least six months ahead, make forecasts, and then see how they can organize and optimize their activities. And the fact that a certain increase in the minimum wage was mentioned in the governing program in 2019 did not represent any guarantee for employers. Lawmakers should not make such decisions without consulting the economic environment, ”adds Florin Godean.

On the other hand, the results of the Adecco survey show that 11 percent of the respondents were more cautious about legislative uncertainties and made their budgets for 2019 taking into account a minimum monthly salary of RON 2,100, and 7 percent based on a salary the gross minimum of RON 2,000 per month in 2019. 

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