Government proposes to raise minimum wage to 3,700 lei from 1 July 2024

The government proposed on Tuesday to raise the minimum wage to 3,700 lei from 1 July 2024 in talks with trade unions and employers in the National Tripartite Council. The unions have proposed that the minimum wage be raised to 3,800 lei as early as March 2024, while employers have proposed a more gradual increase, so that the minimum wage would reach 3,700 lei on 1 January 2025, after an intermediate increase to 3,500 lei in July 2024, Radu Burnete, executive director of the Concordia Employers' Confederation, told Economedia.

As for the tax exemption on the 200 lei minimum wage, Radu Burnete said it was likely to be abolished from next year.

Florin Jianu, president of the National Council of Small and Medium-Sized Private Enterprises in Romania (CNIPMMR), also said that minimum wages in agriculture and construction were also being discussed.

"For the agri-food industry, the minimum wage of 3,700 lei should remain the same, and the minimum wage for the construction industry should not be increased, because they have a differentiated wage of 4,500 lei. These were the proposals on the table, now we will see what the government decides," he said.

Jianu noted that the government was currently analysing the matter.

"I understand why we had this discussion, today, because they are preparing the state budget and then they had to make a decision in the coming days. The budget, as I understand it, is being put into decision transparency. Today. we asked for a few things, a consistent request for business and I understand that there is a 12% increase in the budget for SMEs. We have not received a very clear answer, but we believe and hope that we will pay attention to the construction of the budget to have money for start-ups, for SMEs, for the level of guarantees for next year, because if we only talk about taxes and we do not talk about reconstruction and support for the business environment, I do not think we are on a good trend," added Jianu.

According to Economedia, the government is basing the 2024 budget on economic growth of 3.4%, which is more optimistic than the estimates of international institutions. The executive did not specify the estimated deficit for next year.

However, government representatives assured the meeting that "what happened last year will not happen again,” when the deficit turned out to be much higher than forecast and everyone had to pay.

The ordinance and next year's draft budget are expected to be approved by the government at noon on Thursday and in parliament next week. The government is reported to have said that the train ordinance does not introduce new taxes but will bring "fiscal consolidation.”