Emergency Ordinance no. 114/2018 published in the Official Gazette no. 1116 of 29 December 2018, through Chapter III – amending and completing some normative acts, provides important changes regarding wages in the construction industry. We consider that it is of huge importance to inform you of the following:

For the period between 1st January 2019 and 31 December 2019, in the construction industry, the minimum gross national salary guaranteed in payment, excluding bonuses, will be 3,000 lei per month for a normal average work schedule of 167,333 hours per month, representing 17,928 lei / hour;

Cumulative mandatory conditions for benefiting tax incentives include:

a. Companies active in the construction activity as defined in CAEN 41.42.43 – Section F – Construction and construction materials;

b. Employers’ turnover from the aforementioned activities is at least 80% of the total turnover, year to date, including the month in which the exemption does apply;

c. Declaration 112 on payment obligations, income tax and nominal evidence of insured persons is a declaration on own responsibility for the fulfillment of the conditions for the application of the exemption.

Tax exemption granted in the period 1 January 2019 to 31 December 2028:

3.1 Gross monthly earnings from salaries and assimilated to wages, made by individuals for whom the 10% tax exemption applies, are between 3,000 and 30,000 RON per month inclusive and are made on the basis of the individual labor contract;

3.2 The quota of social security contributions (pensions) 25% will be reduced by 3.75%, reaching 21.25%;

3.3 The quota of social health insurance contribution of 10% will not be due by the individuals, the employees are being considered as insured;

3.4 The labor insurance contribution will decrease from 2.25% applied to the calculation basis to 0.3375% of the calculation base according to the provisions of the Fiscal Code;

3.5 Employers are exempted from social security contributions (CAS) of 4% or 8%, normally due to special employment contracts, respectively to extraordinary conditions of employment.

We draw attention to the lack of clarity regarding to the implementation of the Emergency Ordinance no. 114, which may lead to different interpretations of the legislator’s will.