The net average wage in the construction sector stood at 2,763 lei (EUR582) in February 2019 and the gross wage at RON3,810.
The rise comes as a result of the Emergency Ordinance 114/2018, passed at the end of last year. One of the stipulations thereof was the mandatory gross minimum wage of RON3,000 for construction workers, which means an about RON2,352 net minimum wage.
“We used to pay almost RON3,000 wage before that already, so we don’t have much higher payroll costs now. Out of more than 600 employees, we only needed to give a raise to 20,” says Mircea Bulboaca, owner of builder CON-A, which posted EUR97 million revenue in 2018.
In comparison, the nominal net average wage stood at RON2,933 in February 2019, 6% higher than in the construction sector.
Ordinance 114/2018 also includes exemption from payment of social security taxes for employers in January 1, 2019 – December 31, 2028, a cut of the social security tax paid by employees by 3.75% and a gross minimum wage of RON3,000 for construction workers. To be eligible for this, companies must meet three requirements : operate under one of the NACE codes mentioned in the Ordinance, derive at least 80% of their revenue from operations under one of those NACE codes and payment of gross wages or gross wage-like incomes of RON3,000 to RON30,000 per month.
“We have been seeing a greater workforce stability compared with last year. We even had several employees who returned to us at the beginning of the year after having worked in construction in Italy for a while. Wages may have played a part in this.”
Construction wages in Italy and Spain start at EUR1,000.
The step was designed to help invigorate a sector that suffered in 2017.
“We gave the raises as of January 1. The net wage rose by more than 30% on average and the gross wage by 12% to 15%. We meet all the requirements of the ordinance,” says Nicolae Neag, chief commercial officer of brick maker Siceram in Sighisoara.(EUR1=RON4.7507)
(English version by Loredana Fratila-Cristescu)