New Minimum Salary Requirement

The situation

Effective January 1, 2019, Romania has increased minimum salary requirements and divided them based on whether the position requires university studies, a distinction which did not exist before. The new monthly salary requirements are as follows:

• RON 2,350 (USD 574)  for positions that require university studies, up 23.7 percent from the previous threshold;
• RON 2,080 (USD 508) for positions that do not require university studies, up 9.5 percent from the previous threshold.

Although the increase is significant, the changes should not directly affect employers of foreign workers, as foreign workers typically receive a salary well above the threshold. Salary requirements for highly-skilled workers applying for an EU Blue Card have not changed.

A closer look

• Existing employees. Employers of foreign nationals must increase the foreign national’s salary to comply with the new rule.
• Initial and renewal applications. Employers of foreign nationals seeking to obtain or renew work authorization on or after January 1, 2019 must increase the foreign national’s salary to comply with the new rule. Immigration applications that do not meet the minimum salary will be refused.
• Pending applications. Employers of foreign nationals with pending work permit applications must increase the foreign national’s salary to comply with the new rule. Immigration applications that do not meet the minimum salary will be refused.

Reminders on other requirements

• Additional funds for dependents. As before, foreign workers are also required to receive an applicable minimum salary amount for each accompanying dependent. A foreign worker travelling to Romania with a spouse and two children should therefore receive at least RON 9,400 for a position requiring university studies, or RON 8,320 for a position not requiring university studies.
• Benefits and allowances. As before, benefits and allowances may only be included in the minimum salary calculation if they are specified in the employment contract or assignment letter, guaranteed and fixed, and are not paid in kind. Holiday allowance cannot be included in the minimum salary calculation.
• Currency. As before, employers are required to guarantee the salary in RON regardless of payroll location and/or exchange rate fluctuations.

Background

Salary requirements for foreign workers decreased by more than half on November 10, 2018 when the Romanian government aligned the salary thresholds for foreign workers with the national minimum wage requirement. The current increase is therefore not specifically aimed at foreign workers but seeks to align the minimum salary levels with the current cost of living and market rate salaries.

Although average salary increases between one and 10 percent are typical across Europe, Eastern European countries have been increasing salary levels more aggressively in recent years to align with a growing economy and high labor market demands. Fragomen expects this trend to continue due to the volume of work authorization applications and influx of foreign workers in the region.

Looking ahead

Croatia, Israel, Latvia and Slovenia are expected to announce new salary thresholds in the coming weeks.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].