Public sector reform

Higher salaries under a leaner and more transparent system: Moldova introduces new public pay system

On 1 December 2018, the Government of Moldova introduced a new unitary pay system in the public sector. The aim of this reform was to make the public pay system simpler, more transparent, and fairer. The ILO together with German GIZ and the European Union provided technical assistance and played a critical role in facilitating the process leading up to the adoption of the new law.

News | 04 December 2018

There were three main problems concerning public sector pay in Moldova calling for a revision of the public sector pay system. First, the amount of salary was too low for those in the lower wage scale. Second, the difference in salary between the lowest and the highest scales was very high. Third, the salary level of those engaging in a similar type of work with the same level of responsibility differed by the institution because there had been no unitary pay system in the public sector since the independence of the country. 

The new public pay system will be simpler and will guarantee annual increases.  Furthermore, the difference of the salary scale between the lowest and the highest will be reduced from 33 to 15 grades. At the same time, no one in the public sector will have a lower salary than MDL 2,000 (approximately 103EUR). The lowest monthly salary in the public sector amounted to MDL 1 200 (cca 62EUR) whereas the highest monthly salary was about MDL 27,000 (cca 1,392EUR) for the judges. The public sector comprises about 185,000 employees (200,000 positions) and over 100,000 employees (55% of total) receive the salaries between MDL 1,200 and MDL 2,380.

The reform will also boost the salary increases of lower-paid public sector workers such as employees in the health and education sectors. For example, a medical assistant who received an average of MDL 2,806 will now receive MDL 5,220 monthly and the average wage of child care workers will increase by 109%--from MDL 1,454 to MDL 3,042. As a consequence of the public sector pay reform, more than 8,000 people working as in the education sector will benefit from the wage increase of nearly 90%.

Prime Minister Pavel Philip said at the press conference introducing the new system that the right formula to remove the budgetary imbalance was identified. He said “Until now, we had separate laws for different structures, and there was no fairness. Now, we have a unitary law, which will eliminate the chaos from the salary system”.

The cost of implementing the reform is estimated at MDL 3.95 billion (cca 204 million EUR) from the period of 2019 to 2021. By 2021, it is expected to increase by 30% of the average monthly salary of the employees financed from the state budget and over 55% of average monthly salary of those financed from the local budget.