It is clear that after the adoption and publication of OG 16/2022, the number of part-time employment contracts has sharply decreased. The contracts are lost, even though various officials try to deny it, even concocting the false notion that all part-time contracts have become full-time.

First, the data do not support them. Only some contracts were converted to 8-hour contracts (see figures below, from the intertitle). For example, as we saw in the accounting groups, some employers who had several part-time employees kept only 1-2 who were transferred to full-time positions. The rest of the contracts were closed.

Those who have made the various correlations should consider that the increase in the number of full contracts also includes workers brought in from Asia, let’s not forget that we have a contingent of 100,000 this year. There are also those who came from Ukraine.

So things need to be seen in context.

This measure of over-taxation of part-time workers has already taken place in Romania. When the officials before the liquidation (in 2019) referred to the increase in staff contracts, they did not forget that in the meantime there was also the OUG (114), which identified construction contracts through means (ie employees do not pay income tax, health care contributions and level II). Practically, he was cut from menial work, so new contracts appeared. What was normal: when labor taxation is lower, it should be legalized).

So we now have two types of logic in Government (including PSD) that are opposites (ie things that are accepted and work):

1. A lower labor tax reduces undeclared work (as happened with construction sites and more recently with food and agriculture)

2. A higher tax on labor reduces undeclared work (as in the case of an inflated tax on part-time contracts)

The second is clearly false. On the contrary, it actually encourages the phenomenon. We also see such explanations in the economic literature. In addition to the economic literature, we even find them in 2 studies, one on the Treasury Department’s website and the other on the Department of Labor’s website. If they had “bothered” to read what they wrote, maybe we wouldn’t be facing the re-taxation of part-time workers.

The website of the Ministry of Labor, among other things, states:

“In Romania, there is a fairly large informal economy that can function as a valve in the event of an increase in the cost of labor – some of the low-wage workers can go fully or partially into the informal economy, a solution preferred by people who see themselves in a situation of losing their jobs. Undeclared work (and of course the informal economy) has negative consequences that affect macroeconomic goals, as well as the quality and productivity of work and social cohesion.”

On the website of the Ministry of Finance:

“…reducing the tax burden on low-income workers could remove the distortions that affect legal employment at relatively little cost in terms of lost personal income tax and/or CAS revenue”

How many part-time contracts were closed by Thursday

If we look at the number of closed part-time contracts for the first 4 days (August 1-4), we see a decrease of 44,515. According to ITM data, there was a drop of 4,583 on Thursday, August 4 alone.

However, let’s not forget that OG 16/2022 was published on July 18, and some employers started laying off people from those days (there are cases when 2-3 workers were left, transferred to full-time work, and the rest were laid off).

Unfortunately, we do not have the exact daily situation since July 18, but we do have monthly data for recent months.

So we see a decrease of 135,710 contracts (compared to the beginning of July, correlating with August 4 data).

How much has the number of full-time contracts increased: 101,955 (compared to the beginning of July in relation to the data of August 4).

If we look at the data from August 1 to 4, we will see an increase in full-time contracts by 27,974. And this despite the fact that during the same period 44,515 part-time contracts were closed

* It should be noted that part-time contracts will still be closed, some with notice.

* As I said above, the 101,855 is not all former part-time contracts, as the authorities are trying to tell us, for the reasons stated in the first part of the article.

In 1-2 months, we will probably get wind, therefore, new budget figures, from which it will be seen that budget revenues have not decreased, or increased in the field of contributions, for example. If so, things are taken out of context.

They will not tell us otherwise. For example, some of those who could provide objects (construction, agriculture and food industry) will no longer be able to do so, also thanks to OG 16/2022. This is due to the fact that for this year the staff turnover criterion is taken into account, and in some months many people do not fulfill it. So, for the same gross, employees will receive either less money, or more (because in some months they pay taxes, and in others – not). Some do not meet the criteria even this month, so the effect is immediate. Until now, no one has paid (except contributions to pension level 1).

One thing is certain, officials will continue to deny and say that all part-time contracts are now full. This is what happens when you take things out of context, look at the budget, see more money and jump to conclusions while ignoring other data.

Photo source: DreamTime.com

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