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Article | Global News Briefs

Romania: Proposed four-day workweek, pension contribution change

By Anca Moldovan | March 23, 2022

Romania is considering a four-day workweek option for employees with employer approval; employee pension contribution set to increase to 4.75%.
Health and Benefits|Work Transformation|Retirement|Benessere integrato

Employer Action Code: Monitor

Several countries are experimenting with or considering implementing a four-day workweek. In general, this has taken one of two forms: 1) pilot projects (in Iceland, Spain and Scotland) that reduce working time in select companies to 32 to 36 hours per week, spread over four days, without a reduction in salary; and 2) a proposed ‘labor market deal’ in Belgium (Proposals would introduce option of a four-day workweek) that would provide for the option to condense the statutory 38-hour five-day workweek into four days. In Romania, a recent proposal to amend the labor law would introduce a four-day workweek arrangement similar to that proposed in Belgium.

In an unrelated development, the Romanian government recently adopted an emergency ordinance that will raise employee contributions to individual pension accounts from 2024, offset by a reduction in the level of employee contributions for the general insurance program under social security.

Key details

Four-day workweek

  • The labor law would be amended to allow the “normal” workweek of up to 40 hours to be distributed over four days (up to 10 hours each day), when mutually agreed upon by the employer and employee. The proposal aims to enable parents to spend more time with their children and to increase productivity.

Employee pension contribution

  • Currently, 3.75% of earnings are diverted from employees’ Pillar I social security contribution (25% of earnings) to Pillar II individual pension accounts, which are compulsory for employees under age 35 and voluntary for employees age 35 to 45. This diversion rate will increase to 4.75% from January 2024, and the net social security contribution rate will correspondingly fall to 20.25%.

Employer implications

The four-day workweek proposal will be debated first in the Senate, but the final decision will be made by the Chamber of Deputies. The proposed amendments to the labor code to implement four-day workweeks are fairly concise and state only that mutual consent would be required. This implies that employers would be under no obligation to introduce a four-day workweek if the amendments are approved, although it may become common by market practice.

The increase in contributions to individual private pension accounts has no financial impact on employers, since all social security and individual pension contributions are paid by the employees, with the exception of workers compensation; however, the measure will reduce financing for social security and social security pension entitlements for employees participating in the individual account system. The measure has been enacted as one of the milestones in the EU recovery and resilience plan for Romania, which had to be met by March 31, 2022.


Anca Moldovan

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