Romania updates medical leave tax rules and vacation compensation laws

New regulations in Romania will affect thousands of citizens receiving various forms of medical leave. Starting in August, certain categories of individuals will be required to pay a 10% Health Insurance Contribution (CASS) on their benefits. This expansion of the CASS application includes maternity leave, sick leave for common illnesses or non-work-related accidents, quarantine, isolation, and benefits for caring for a sick child or a patient with oncological conditions.

While the gross benefit amount does not decrease by 10%, the contribution is calculated based on the benefit amount. Notably, benefits granted under legislation regarding work accidents and occupational diseases remain exempt from this contribution.

In a separate legal development, the High Court of Cassation and Justice (ÎCCJ) has issued a mandatory ruling regarding unused vacation days. The court established that an employee's right to monetary compensation for unused leave does not automatically expire after the 18-month carry-over period if the employer cannot prove they provided a real opportunity for the employee to take the leave. This decision, published in the Official Gazette, is now binding for all Romanian courts.