Private Government's "to do" list for labor market

Minister of Labor Marian Sarbu, together with business leaders and human resource consultants, met yesterday for the "Private Government" debate, and agreed on the government's anti-crisis measure "to do" list for the labor market, considering that employers are facing increasingly more difficulties in retaining their employees.

The priority list includes identifying solutions for lower social contributions as of 2010 for employers who maintain the number of jobs or create new ones, the formation of a ministerial workgroup to modify labor legislation, including the Labor Law, the clarification of certain inconsistencies in the ordinance that exempts technical unemployment from taxation, and the transfer of the process of changing profession to the private environment.

While the employers and the authorities agree in principle, the two sides have differing opinions about the speed with which action should be taken. The business environment requests creating solutions fast and applying these immediately, to limit the effects of the crisis, and the minister avoided any specific deadlines. Sarbu assured company owners that a solution to reduce contributions will be found in a few months for those who maintain the number of jobs or create new ones.

"I hope that within 2-3 months we will come up with a formula which will allow us, as of next year, to discuss a substantial cut in contributions for those who maintain or create jobs," the official indicated. "We need these measures now, not in a year's time," replied Maria Grapini, President of the Light Industry Employers Association (FEPAIUS).

Regarding the reduction in taxation for the work force, the Minister of Labor admitted that Romania is among the European Union countries with high labor taxation, but added that a cut in social contributions cannot be made effective from one day to next, without ensuring another source for the pension budget.

"If Romania had the possibility of taking out a €10-15 billion loan for 10-15 years to cover the pension fund deficit, we would lower social contributions by as much as one quarter," said the minister. The minister provided no details regarding the size of reductions in contributions paid by employers to the social security budget.

Business Standard