Romania: Government subsidies for employers

In the context of COVID-19 and following the presidential decree declaring a state of emergency, the Romanian government issued emergency ordinance no. 30/2020 (hereinafter “EO 30/2020”) by which technical unemployment will be subsidised from the state budget through the Workforce Agency, this from the unemployment fund. EO 30/2020 was published on 21 March 2020 in the Official Gazette and entered into force on the same date.

The ordinance provides that the state will bear 75% of employees’ gross monthly salary, but no more than 75% than the average national wage, which is LEI 5,429 (approximately EUR 1120).

Consequently, the maximum amount covered by the state will be LEI 4,070 (approximately EUR 840). Nevertheless, in order for the employees to benefit from the said state financial support, the following alternative conditions must be met:

1. all the employers directly affected by the measures taken following presidential decree no. 195/2020 whose activities are partially or totally closed (restaurants, coffee shops, bars, other food and beverages activities – except for deliveries, drive-in and room service); in order to access the subsidy employers are required to hold an emergency certificate issued by the Romanian Ministry of Economy, Energy and the Business Environment as provided by the Presidential Decree.
2. employers whose activities are reduced due to the effects of the COVID-19 epidemic and have no financial ability to pay all the salaries of their employees. In such a case, the employers can benefit from the payment of the indemnity for a maximum of 75% of the employees who have active employment agreements at the date of entry into force of EO no. 30/2020. Moreover, in order to benefit from the said state financial support, the employers have to submit an affidavit (standards provided by EO no. 30/2020) by e-mail to the competent territorial Workforce Agency in which the employer declares that the company’s revenues have decreased in comparison to the month the declaration is filed by at least 25% of the revenues registered for the period January to February 2020 and cannot financially sustain payment of the salaries.

The support referred to above is subject to taxation and payment of mandatory social contributions in accordance with the provisions of the Romanian Tax Code. The retention and payment of the taxes and social contributions is done by the employer out of the compensation received from the unemployment fund. Payment of the state financial support will be made within 30 days from the time the documentation is filed.