The return of technical unemployment – 90 days exemptions for social security contributions

The Romanian Government decided to offer starting with 1st of February 2010, another period of three months of technical unemployment during which the social charges for the employees will not be paid, but the employers have to certify the difficult period of their company by giving a statutory declarations. These companies will be periodically checked by ANAF.

The new period of technical unemployment will be applied from February 2010 but not later than December 31, 2010. During the suspension of the individual employment contract the employees and the employers (of those employees) are exempt from paying social security contributions for no more than 90 days.

The Romanian Government decided to offer starting with 1st of February 2010, another period of three months of technical unemployment during which the social charges for the employees will not be paid, but the employers have to certify the difficult period of their company by giving a statutory declarations. These companies will be periodically checked by ANAF.

The new period of technical unemployment will be applied from February 2010 but not later than December 31, 2010. During the suspension of the individual employment contract the employees and the employers (of those employees) are exempt from paying social security contributions for no more than 90 days.

The employers will only have to pay the 75% allowances of the basic salary which are granted to employees from the wage fund, during the interruption of the activity, being not included in the salaries wages and no tax being applied on.

Simultaneously with granting such facilities, the Government will implement a series of rules that will check if employers abuse or not of the technical unemployment.

“To avoid possible abuses and ensure an efficient monitoring, the employers are required to submit to the Territorial Labor Office a declaration on their own responsibility confirming the technical unemployment situation.

Also, the Labor Office and the National Tax Administration Agency will regularly monitor the employers who benefit from the facilities provided,” it is said în the normative document.

According to this regulation, if the individual employment contract is suspended “for economic, technological, structural or similar reasons” then the period for which the employees are exempt from payment the retirement taxes it is considered for the employees as a contributive period.

The normative document also establishes that for calculation of unemployment and health insurance compensation is used the gross minimum wage on country level and the contribution period without paying the contribution is taken into account in determining the period of 24 months preceding the date of registering the request for granting the unemployment.

The new period for the technical unemployment is sustained by the Government who tries to send a positive signal to employers to choose for maintaining the employment, “given that the effects of economic crisis are expected to be longer” and to avoid ” the loss ” of skilled workers in areas with potential for development / expansion after the resumption of economic growth.