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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure RO-2020-12/373 Updated – measures in Romania

Indemnity for technical unemployment

Îndemnizație pentru șomaj tehnic

Country Romania , applies nationwide
Time period Temporary, 15 March 2020 – 31 December 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g., short-time work)
Author Victoria Stoiciu (European Institute of Romania) and Eurofound
Measure added 08 April 2020 (updated 30 May 2022)
Related ERM support instrument

Background information

Under the Labor Code, during the suspension of employment upon the employer’s initiative, as a result of a temporary suspension or reduction of activity ('technical unemployment'), the affected employees are entitled to receive an indemnity of minimum 75% of their base salary, paid exclusive from the employer’s salary fund. By derogation from the above provisions, GEO 30/2020 provides that throughout the state of emergency instituted by the Decree on 15 March 2020, the indemnities due to the employees whose employment contracts were suspended as a result of the effects of COVID-19 will be borne, at least in part, from the unemployment insurance budget.

Content of measure

The indemnity borne from the unemployment insurance budget is of 75% of the base salary, without however exceeding 75% of the gross average salary established for 2020 (i.e. thus, the indemnity borne by the budget under these circumstances shall be maximum 75% of RON 5,429 (€1,100). Employers have an option, but not the obligation, to supplement the indemnity capped as mentioned above, so as to cover the difference – if any – to the minimum 75% of the base salary corresponding to the job position, insofar as the employers’ budget permits it. Employers shall benefit from state support in paying the indemnity within the limits described above.

if they interrupt their activity, entirely or in part, or if they reduce their activity as a result of the COVID-19 epidemic, throughout the declared state of emergency. In order to receive the indemnities for the employees suspended under the provisions of GEO 30/2020, employers shall submit by e-mail the payment request, to the local unemployment agency within the area of their registered office. The indemnity for technical unemployment is subject to tax and social contributions under the provisions of the Fiscal Code.

Updates

The following updates to this measure have been made after it came into effect.

07 April 2022

In April, the Government adopted the Government Emergency Ordinance 36/2022 which provides the payment of technical unemployment indemnity consisting of 75% of the monthly salary, but no more than 75% of the national gross wage to the employees working in companies whose activity has been directly or indirectly impacted by the armed conflict in Ukraine or/and the sanctions imposed to the Russian Federation. The measure applies until December 31 2022.

19 January 2022

In January 2022, the Government Emergency Ordinance 2/2022 has extended the application of the measure until 31 March 2022.

02 October 2021

In October 2021, the Government Emergency Ordinance has extended the application of the measure until 31 December 2021.

Therefore, until that date, for the period of temporary suspension of the employment agreement, at the employer's initiative, for reasons due to the effects of the coronavirus, the allowances to which employees are entitled are to be set at 75% of the basic salary for the position and paid from the unemployment insurance budget but not exceeding 75% of the national average gross salary.

03 June 2021

In June 2021, the GEO 44/2021 provided that persons which are obtaining revenues from copyright contracts solely and which interrupt/reduce their activity as a result of the state of emergency/state of alert are entitled to a indemnity of 41.5% of the national average gross wage for 2021. The measure is targeting workers from cultural/artistic sector. A number of approx 5,500 persons are expected to benefit of this measure. The measure is applied during the entire state of alert (on-going) and maximum 3 months after the end of the state alert.

04 December 2020

In December 2020, the application of the measure was extended until 30th June 2021.

Use of measure

Official data indicate that since a nationwide state of emergency, instituted by Presidential Decree No. 195/2020, was imposed on 15 March 2020, 1 million labor contracts have been suspended or ceased. Potentially, most of them could be covered by the provisions of GEO 30/2020. On the 2 April 2020, the first day when employers could submit the request for receiving the indemnity for technical unemployment, 5,800 companies have requested the state to fund the indemnity for about 70,000 employees. The Ministry of Finances, Florin Cîțu, declared that approximately 1 million employees with suspended contracts could receive the indemnity for technical unemployment.

Target groups

Workers Businesses Citizens
Employees in standard employment
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
Company / Companies
Public employment service
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The social partners have been consulted in the design of the measure. All trade union and employers organisations which are representative at national level have been consulted. The social partners came up with proposals for changes and improvements of the provisions of the measure, some of which were included in the final version of the legal acts.

Views and reactions

Representative trade union organisations and employers organisations have been consulted.

Sources

  • 21 March 2020: GEO 30/2020 (lege5.ro)
  • 30 March 2020: GEO 32/2020 (www.mmuncii.ro)
  • 04 December 2020: ORDONANȚĂ DE URGENȚĂ nr. 211 din 4 decembrie 2020 privind prelungirea aplicării unor măsuri de protecție socială adoptate în contextul răspândirii coronavirusului SARS-CoV-2, precum și pentru modificarea Ordonanței de urgență a Guvernului nr. 132/2020 privind măsuri de sprijin destinate salariaților și angajatorilor în contextul situației epidemiologice determinate de răspândirea coronavirusului SARS-CoV-2, precum și pentru stimularea creșterii ocupării forței de muncă (legislatie.just.ro)
  • 03 June 2021: ORDONANȚĂ DE URGENȚĂ nr. 44 din 3 iunie 2021 pentru modificarea Ordonanței de urgență a Guvernului nr. 132/2020 privind măsuri de sprijin destinate salariaților și angajatorilor în contextul situației epidemiologice determinate de răspândirea coronavirusului SARS-CoV-2, precum și pentru stimularea creșterii ocupării forței de muncă (legislatie.just.ro)
  • 02 October 2021: Government Emergency Ordinance 111/2021 (legislatie.just.ro)
  • 19 January 2022: GEO 2/2022 (legislatie.just.ro)
  • 06 April 2022: Government Emergency Ordinance no 36/2022 (legislatie.just.ro)

Citation

Eurofound (2020), Indemnity for technical unemployment, measure RO-2020-12/373 (measures in Romania), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/RO-2020-12_373.html

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