Romanian Cos Hiring Unemployed People Exempt From Social Security Contributions For 6 Mos

Romanian companies which in 2010 hire 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 on at least one year and the employer lays off no one.

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This is according to a draft emergency ordinance obtained by MEDIAFAX, which also points out that 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 in the Romanian labor market retain their severity in 2010, so additional measures are required to stimulate job creation. 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=RON4.1196) budget revenue from income tax, RON13.3 million from public social security and RON4.9 million from public health insurance.

The draft ordinance will be debated with workers' unions and employers' associations.

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