New project: state to partially cover health contribution for IT employees in private sector

Anca Alexe 07/02/2018 | 11:32

The Dancila government may adopt a measure through which the state could cover a part of the health contributions (CASS) for employees of private companies in the IT & C sector, who don’t pay income tax, in order for their net salaries not to decrease as a result of social contributions being transferred from employers to employees.

The measure is mentioned in an emergency order project by the Finance Ministry, and it was initially announced by Labour Minister Olguta Vasilescu.

According to the project, the purpose is to ensure that the net income for employees in the IT sector, in research, development and innovation, as well as those who engage in seasonal activities or suffer from serious disability, is at the same level as it was in December 2017, without the need for their employers to make an additional financial effort while they did not have to do so for employees who are not exempt from paying income tax.

The measure will also apply to people in the above categories who will have a change in their work status, such as deployment, suspension or termination, as well as employees whose employers are in insolvency.

The measure proposed by the Finance Ministry comes as a result of complaints from IT companies regarding the fact that, as a result of the transfer of contributions from January 1, they had to cover increases of salaries by 5-7 percent so that the net salaries of IT employees to remain the same as before. This situation arose due to the fact that the government also cut income tax from 16 percent to 10 percent for all salaried workers.

However, since IT workers already weren’t paying income tax, this compensatory measure had no benefit for them – instead, they had to pay more out of their gross salary for social contributions which had previously been paid by the employer, leading to a drop in their net salaries.