Romania To Exempt Cos Hiring Jobless People From Paying Social Security

Boc said the Government will temporarily exempt companies hiring jobless people from paying social security to help businesses and ease employment. He said the act will be adopted by the end of February.

Romania's unemployment rate hit a near seven-year high in January, at 8.1% from 7.8% in December, according to data released Monday by the country's employment agency ANOFM. Romania has 740,982 jobless people.

Last week, the Government last week passed an emergency decree allowing companies to put employees on furlough for three months throughout 2010 instead of slashing jobs. Employees put on furlough get 75% of their base wage, which is not subject to taxation, and employers don't pay social security during that period.

The Government said the furlough measure is needed to protect jobs, "as the effects of the economic crisis are estimated to last," and to avoid "losing" skilled workers in fields which have the potential to develop/expand once the economy recovers.

The Government earmarked 439.2 million lei (EUR1=RON4.1325), namely RON73.8 million from income tax and RON365.4 million from social security contributions, for furlough measures targeting around 200,000 employees. According to the Government, should the 200,000 people be laid off later, unemployment aid for nine months would amount to RON1.3 billion.

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