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Starting from August, Health and Social Contributions will be paid at minimum salary level even for part-time employees

Thursday, the 20th of July, the Romanian Government adopted a decision through which is the employers will have to pay the CAS and CASS contributions at the level of the minimum wage even for the part-time contracts.

Therefore, under this decision, employers will be required to pay social and health contributions at the level of the minimum wage even in the case of part-time contracts.

The measure is taken even if the salary of the part-time employee, related to the number of hours worked, is lower than the country-guaranteed minimum gross salary. Thus, for example, if the part-time employee earns 600 lei gross, the employer will be obliged to pay the pension and health contribution at the level of the minimum salary of 1450 lei gross.

The exceptions to this provision are: the pupils, the retirees and the students. Exceptions also include the apprentices up to the age of 18 years, people with disabilities who have by law the right to work less than eight hours a day, or those who earn income from multiple employment contracts, out of which one is full-time.

The new regulation will enter into force on 1 August and is to be applied starting with the August 2017`s revenues.

According to the Government, at this date there are 500,000 part-time contracts. The measure is stated as one in favor of the employees, namely, it would propose to diminish the moonlighting. In the Government's view, this measure is based on the assumption that the majority of part-time employees are in fact full-time employees, declared with less hours, so that employers can avoid paying taxes.

In our opinion, the presumption is wrong, in the real economy there is a consistent number of employees who are actually working part-time, due to the characteristics of the respective jobs and also the real needs of the companies for certain activities. Thus, although in reality the measure is only implemented to generate additional revenues to the budget, in fact, in our opinion, this will have the opposite effect, with many employers preferring to redistribute the part-time tasks of the employees who are already working full-time, prefering to pay overtime hours rather than paying a higher amount for a lower workload.

Last but not least, part-time employees are most often people in disadvantaged or low-paid jobs. Unfortunately, this measure, apparently of a social protection nature, will ultimately have a negative impact exactly on the categories it aims to protect.
 

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