b. Remuneration
Romania has a guaranteed minimum wage of 2,500,000 lei
(about 70 Euros) for a month of 170 working
hours<1>.
However, several sources indicate that an average worker makes between 90 and
300 Euros per month depending on the level of danger inherent to their job.
Additionally, an employer is required to pay social charges to the government
for each employee. One must pay match 22% of an employee’s salary for a social
security contribution, 7% for a health insurance fund, 3% for the unemployment
fund, 0.5% for the accidents and professional illness fund, and 0.75% for the
Work Chamber Commission. This amounts to an additional 33.25% of the employee’s
salary. Coupled with the fact that metalworking is inherently dangerous, Harris
Rebar should expect to pay up to 400 Euros per factory worker. This wage would
be considered generous and should attract qualified employees.
c.
employment Legislation
In conjunction with child labor laws, a person cannot be
employed if younger than 15 years of age. All employees are entitled to at
least 20 working days of paid holiday, or 24 days if their work is in “harmful,
difficult, or dangerous conditions,”<2>
such as metalworking. These days are in addition to the 7 days of public
holidays. All employment contracts must be made in Romanian and workers are allowed
to negotiate in syndicates or with “collective agreements” if the company
employs more than 20 workers. The contract cannot forbid and employee to hold
other positions, except in the case of a “non-competition” clause. The contract
can be for a limited time or for an unlimited time, but limited contracts
cannot be made for more than 18 months. All employment contracts must all be
concluded in writing, in Romanian, and kept in the employee’s work file. All of
these regulations are a part of the New Labor Code, instituted on March 1,
2003.
v. Incentives for FDI
The Romanian government has approved
investment incentives
for foreign companies directly investing more than 1 million $US or the
equivalent. Any goods imported as part of the investment will be exempt from
import duties. Foreign enterprises also receive an investment allowance equal
to 20% of the investment in the first year.
<1> “Romanian
Labor Law”
<2> “Romanian
Labor Law”