Romanian Cos Hiring Jobless People Exempt From Paying Social Security For Six Mos

Romania’s Government on Tuesday approved a decision whereby companies hiring in 2010 people who have been unemployed for at least three months will be exempt from paying social security contributions for the new employees for six months, as long as the new workers are kept for at least one year.

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Prime Minister Emil Boc said Tuesday that one of the conditions to benefit from social security exemptions is that these people haven't worked for the company that hires them over the past six months, to prevent abusive layoffs.

According to the draft emergency ordinance regulating the matter, the exemption will not be granted to firms which have employed these people before in the past year, or to employers who fill the positions left vacant after sacking employees.

The ordinance explains the exemption is needed because the effects of the economic crisis on the Romanian labor market remain harsh in 2010, so additional measures are required to stimulate employment. The document warns that the crisis could cause the high level of unemployment "to continue and turn into long-term unemployment and inactivity."

The six-month contribution exemption, together with the employee being kept on for a year, is estimated to result in an additional 14.4 million lei (EUR1=RON4.1224) budget revenue from income taxes, RON13.3 million from public social security and RON4.9 million from public health insurance.

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