Salary and the payroll process are essential elements of labor relations, regulated by a complex legal framework that ensures the protection of employees’ rights and the obligations of employers. In Romania, labor legislation establishes clear principles on fair remuneration, guaranteeing a minimum wage and transparency in payroll payments.

Salary is the consideration in money or in kind granted to the employee for the work performed, based on an individual labor contract. 

The provisions on the salary were amended by Law no. 283/2024 by which certain clarifications were introduced regarding the definitions of salary, gross minimum basic salary and gross minimum basic salary guaranteed in payment, as follows:

• Salary is the fixed component of the gross remuneration paid to an employee for work performed during a calendar month, which does not include bonuses, allowances and other allowances. The latter are added to the basic salary and are constitutive elements to be negotiated with the employees. These building blocks cannot be changed unilaterally by the employer, but must be communicated to the employees concerned.

In addition to bonuses and allowances, the Labor Code also includes other allowances, some of which are considered tax benefits granted by the state, such as meal vouchers. Although the employer bears the cost of these, the associated tax benefits reduce taxes and contributions, which means that, in theory, it is the state that provides these benefits. However, these benefits do not always benefit the employee. They are not freely granted by the employer, but are regulated by the Tax Code, so these benefits may have less favorable effects for employees in the long run.

Among the elements of remuneration, which are influenced by various conditions, there is the bonus for overtime work, given that an employee cannot be obliged to work overtime. There are also the delegation and secondment allowances, because when an employee works in a different place from the one established in the contract, he/she becomes a mobile worker and the applicable regulations change.

• The minimum gross basic salary is the minimum amount to which the employee is entitled for the work performed, established by normative act or by the applicable collective labor contract.

In the case of a temporary work contract, the salary received by the temporary employee for each assignment is determined by direct negotiation with the temporary employment agent and may not be lower than the gross minimum basic salary.

• The minimum gross basic wage per country guaranteed in payment is the amount established annually by Government decision corresponding to the normal working hours, in order to improve living and working conditions, especially the adequacy of the minimum wage, in order to ensure a decent standard of living. If the normal work schedule is, according to the law, less than 8 hours a day, the minimum gross hourly basic wage is calculated by relating the minimum gross basic wage guaranteed in payment to the average monthly number of hours, according to the approved legal work schedule.

The provisions of the Labor Code provide that an employee may benefit from the minimum gross basic salary guaranteed for a maximum period of 24 months, established by Government decision. After the expiry of this period, the basic wage must be higher than the guaranteed gross minimum wage.

All the rights and obligations provided by law, in relation to the basic gross minimum guaranteed basic salary, are determined on the basis of the level of the latter. The employer has the obligation to provide the employees with a gross basic monthly gross wage at least equal to the guaranteed gross minimum wage.

By Directive (EU) 2022/2041 of the European Parliament and of the Council, the adequate minimum wages in the European Union have been regulated in the European Union, establishing the minimum criteria for determining the adequate minimum wage by each Member State. These include the general level of wages, how they are distributed and the rate of increase. Many Member States have not finalized the transposition of this directive into national law, but Romania has transposed the directive by Law 283/2024.

For example, Denmark has asked the Court of Justice of the European Union to strike down this directive on the grounds that it directly affects wage-setting in the Member States, is in breach of the principle of attribution of competences and has acted in breach of Article 153 (5) TEU.

If employers do not grant employees the minimum gross basic salary established by normative act or at the minimum wage level established by the applicable collective labor contract, they will be sanctioned with a fine from 3.000 lei to 5.000 lei for each person found to be in non-compliance with these legal provisions, without exceeding the cumulative amount of 200.000 lei.

Author: Atty. Felicia Cioflan