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Romania: Support measures for employees and employers in force as of June 1, 2020

Emergency Government Ordinance no. 92 of May 28, 2020 has been published in the Official Gazzette no. 459, of May 29, 2020 (“EGO 92/2020”). The ordinance institutes active support measures for employees and employers in the context of the epidemiologic situation generated by the spread of the SARS-CoV-2 coronavirus. The act also modifies other legislation.

The Government has decided on the following support measures from June 1, 2020:

I. Employees who have benefited from technical unemployment in the context of the SARS-COV-2 pandemic and whose employment relationships are maintained after employers resume work will be entitled to receive payment of salary from their employer for three months. The payment is calculated at 41.5% of basic salary for their position, but not more than 41.5% of average gross earnings established by the State Social Insurance Budget Law No. 6/2020.

In order to benefit from this measure, employers must maintain employees' employment relationships until December 31, 2020, with two exceptions: seasonal workers and where termination occurs for reasons not attributable to employers. Furthermore, this measure only applies when individual employment agreements have been suspended for at least 15 days during the state of emergency or alert.

Individuals working under labour agreements under Law No.1/2005 on the organisation and functioning of co-operative societies also benefit from the new regulation.

Employers that are companies operating in several business areas, at least one of which is under restrictions set by law, may choose either to pay wages, or continue paying technical unemployment state indemnification from June 1, 2020 until the lifting of restrictions.

II. Employers will be reimbursed as to 50% of employee wages but no less than 2.500 lei, for hiring a certain category of persons between June 1, 2020 and December 31, 2020, for 12 months for each employee hired full-time for an indefinite duration. The category of persons covered by this provision includes persons over 50 whose employment was terminated for reasons not attributable to them during the state of emergency or alert, and that are registered with Local Employment Agencies as unemployed.

III. Employers hiring people aged between 16 and 29 for an unlimited period by the end of the year will also benefit from this measure.

The support measure applies, under the same conditions, for employment of Romanian citizens whose employment was terminated by dismissal for reasons not attributable to them. These employment relationships are those between Romanian employees and foreign employers that take place abroad.

Employers who opt for employment support in any of the above categories must maintain employment relationships for the next 12 months after expiry of the 12 months’ support.

Employers who terminate employment agreements before the obligation deadline falls due must reimburse Employment Agencies in full. Reimbursement consists of the total amounts received for each employee whose employment relationship has been terminated, in addition to reference interest of the National Bank of Romania applicable at termination date.

The following will not benefit from the support measures: employees of public institutions and authorities, employees of companies that are in bankruptcy, in dissolution, in liquidation, or whose activities have been suspended or restricted for reasons other than preventing the spread of the SARS-CoV-2 coronavirus.

IV. The Government ordinance also extends the grant of technical unemployment compensation from June 1, 2020, without interruption, until the restrictions are lifted, for business areas involving maintained restrictions aimed at preventing and combating the effects of the COVID-19 pandemic.

We hope this information was useful. We are available for any clarifications necessary. Thank you.

bnt Gilescu, Văleanu & Partners team

 

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