Eastern European countries, a significant proportion of those remunerated at the minimum wage were concentrated in industry – more than 30% in Bulgaria, Czechia, Croatia, the Slovak Republic, Poland, and Romania. Generally, small and medium-sized enterprises employ the vast majority of those remunerated at the minimum wage, but patterns differ at the level of member states. The impact analysis based on the EUROMOD microsimulation model reflects significant reductions in income inequalities for certain member states, especially in scenarios where the minimum wage is increased to 60% of the median wage (Czechia, Estonia, Spain, Luxembourg, Poland, and the Slovak Republic) or 50% of the average wage (Bulgaria, Estonia, Spain, Luxembourg, Poland, Romania, and the Slovak Republic).

**In Romania, the government sets the legally mandated minimum wage after non-binding consultation with trade unions and employer organizations; distinct minimum wage tiers apply to various sectors of economic activity.** Between 2019 and 2021, a higher minimum wage was applied for employees with tertiary education and at least one year of experience **.** The government's decision set the gross level of the minimum wage. The minimum wage applies to full-time and part-time workers, entitled to the minimum wage proportional to the working time (e.g., someone employed for 50% of the total time is entitled to a minimum wage equal to 50% of the minimum wage for full-time workers). The statutory level does not vary across regions, accounting for price differences or age groups. The minimum wage level is revised yearly, but this process is not based on any strict rules determining the new minimum wage level. However, the government has used macroeconomic indicators (productivity rate, inflation rate, wage growth) to substantiate the minimum wage increases over the last few years. Since 2019, three different minimum wage levels have been established. In January 2020, those in the construction sector were entitled to the highest level (3,000 RON gross per month) and additional fiscal benefits (lower taxation of labor income, as they were exempt from income tax, health contribution, and reduced social security contributions). Between 2019 and 2021, two different levels applied based on education for those not in the construction sector. Those with higher education<sup>2</sup> and a year of work experience received 2,350 RON; the remaining workers (non-construction, non-high education) received 2,230 RON monthly. These are equivalent to approximately 620, 485, and 460 euros per month.  As of 2022, the minimum wage for employees with tertiary education has been naturally eliminated, given that the government has not increased it. In this year, higher minimum wages were also stipulated for agriculture and food sectors.

**One important reform outlined in the Romanian Recovery and Resilience Plan involves establishing an objective minimum wage setting mechanism.** The law shall provide an objective mechanism and formula to determine the minimum wage level after consultation with social partners. The new mechanism should be consistent with job creation and external competitiveness.

> 2 Higher education is at least a bachelor’s degree (ISECED-6).

3