When expanding your business into Romania, consider partnering with an Employer of Record (EOR). A Romanian EOR takes on all employment-related responsibilities, ensuring compliance with local labor laws. This includes managing payroll and tax obligations, allowing your company to maintain operational control while offloading administrative tasks.

While the opportunity to tap into Romania's talent pool is enticing, it's essential for companies to navigate the local rules and labor codes when hiring employees. This is where a Romania Employer of Record (EOR) or Professional Employer Organization (PEO) can be invaluable.

Many of Romania’s labor laws are different from those in the USA, UK, Singapore, etc. For example, mothers can take maternity leave for a total of 126 days. In comparison, countries like the US, mention no laws offering mandatory  federal paid maternity/paternity. Secondly, trade unions play a significant role, and collective bargaining agreements at sectoral levels can set standards for working conditions. While trade unions are influential in many European countries, their power and reach in countries like the US, India, Singapore have diminished over time.

Partnering with a Romania EOR/PEO like Gloroots simplifies the process of onboarding local talent. By having a trusted partner manage payroll, taxes, and compliance with local employment regulations, companies can ensure smooth and hassle-free operations in Romania.

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The cost of Romania EOR/PEO services varies based on factors like employee count, service scope, and project complexity. Typically, it involves a monthly fee per employee or a percentage of their salary. Additional charges may apply for extra services or customization. For detailed pricing information, please visit our website.

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Key Metrics For Foreign Employers 

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Romania is a popular choice for international employers due to its low taxes and skilled workforce. Its strategic location connects Europe and the Middle East, making it great for importing and exporting. Corporate taxes are among Europe's lowest, and payroll tax obligations for employers are minimal. Romania's EU and NATO memberships offer advantages like lower trade costs and access to vast markets. The government has simplified labor laws to attract more businesses, but it's essential for employers to understand these regulations before starting operations in Romania.

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The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Romania.

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Source: The Global Talent Competitiveness Index 2023

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Romania.

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Imagine you're an employer in Romania, and you have workers. Sometimes, employers make a mistake by not correctly deciding if a worker is an employee or something else like a freelancer. This is called "misclassification."

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When you misclassify, you might not give your workers the right benefits or protections they should have. It can create legal problems.

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But here's the good news: If you work with a PEO/EOR in Romania, they can help you get this right. They'll make sure you follow the rules, classify your workers correctly, pay them accurately, and give them the benefits they should have. This way, you can focus on your business, and they'll handle the employment stuff.

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What truly makes Romania an enticing destination for international businesses is its remarkable workforce.With a population of 19.2 million and an impressive literacy rate of 98.9%, Romania offers an ideal environment for a wide range of businesses and industries. 

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Employment contract

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In Romania, labor regulations require a written employment contract that outlines important details. While there's no specific template, every contract should include:

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1. Names and addresses of the parties involved.

2. Workplace location and details.

3. Job description complying with labor laws.

4. Performance criteria and goals.

5. Start date.

6. Employment duration (indefinite or definite).

7. Compensation, including overtime and benefits.

8. Payment schedule.

9. Work hours and vacation entitlement.

10. Job-related risks.

11. Notice period and relevant terms.

12. If applicable, trial or probationary period duration.

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Get an overview of what you need to know when hiring in Argentina.

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Working time

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In Romania, labor laws specify that a standard workweek consists of five eight-hour days, totaling no more than 48 hours per week. Part-time employees, on the other hand, are required to work a minimum of ten hours per week, which equates to two hours per day. 

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For individuals under the age of 18, their daily work hours are capped at six hours, and they are not allowed to work more than 30 hours in a single week.

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Employers are obligated to maintain records of each employee's daily work hours, including the start and end times of their shifts. These records must be made available to labor inspectors upon request.

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Overtime

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Employees in Romania are permitted to work a maximum of 48 hours each week, which includes any overtime hours. 

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Overtime work, which goes beyond the standard eight hours per day or 40 hours per week, must be compensated with paid time off within 60 calendar days following the day where the employee worked overtime.

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If providing paid time off is not feasible, employers must compensate employees for overtime by adding a benefit, which should not be less than 75% of their basic wage, adjusted for the overtime hours worked.

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Please note that after working a 12-hour day, employers must grant a 24-hour rest period. 

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Overtime is not allowed for workers under 18 years of age, part-time employees, and pregnant employees who are medically unable to work regular hours due to health reasons.

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Public Holidays

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The country observes 15  public holidays employees can take as paid days off.

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Minimum Wage

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Starting from January 1, 2023, the minimum gross base wage in Romania has been raised to RON 3,000 per month, assuming a standard working schedule averaging 165.333 hours per month, which translates to RON 18.145 per hour.

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It's important to note that the minimum gross wage set for each country does not include any additional payments or supplements. Also, beginning on January 1, 2023, employees can only receive the minimum gross base salary for a maximum period of 24 months. After this period, employers are obligated to increase the salary for these employees.

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Annual Leave

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Employees have a legal entitlement to receive up to 20 days of paid annual leave each year, and this entitlement is adjusted based on the duration of their employment. Employers are obligated to provide employees with their vacation allowance at least five working days before the leave period begins.

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If, for any reason, an employee cannot utilize all or part of their annual leave within the current calendar year, the employer must carry over the unused leave to the first half of the following year. However, if the employee remains unable to take the accrued leave (e.g., due to long-term illness), the employer must grant the unused leave with the employee's consent within 18 months, starting from the year following the one in which the vacation days were earned.

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Paid Sick Leaves

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According to the labor code, employees who are part of the pension and social insurance system and have met their required contributions are eligible for sick leave for up to 180 days within a single year, with the possibility of a 90-day extension.

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During the initial five calendar days of sick leave, the employer is responsible for providing compensation, but only for working days. Starting from the 6th calendar day onward, the FUNASS (Unique National Fund of Health Insurances) fund takes over the sick leave payment.

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The sick pay amount ranges from 75% to 100% of the average monthly income earned over the previous six months, depending on the type of illness. To qualify for sick pay, the employee must furnish a medical certificate from a doctor.

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Maternity leaves

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A pregnant employee is eligible for 126 days of paid maternity leave.

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Maternity leave comprises two segments: prenatal leave, which requires at least 63 days to be taken before the expected due date, and postnatal leave, covering the remaining 63 days after childbirth. The specific days allocated to each period are determined by the employee's doctor and documented in the official medical certificate of maternity.

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Maternity benefits, amounting to 85% of the calculation based on the average monthly gross wages of the employee in the six months before maternity leave commenced, are provided by the FUNASS (Unique National Fund of Health Insurances). Additionally, employees have the right to take leave to safeguard their own and their child's health and safety. This maternal risk benefit is entirely covered by the Unique National Fund of Health Insurances and equals 75% of the average gross earnings over the last six months. Maternal risk leave complements maternity leave.

To request this leave, the employee must submit a formal request to the employer and provide a medical certificate from the doctor regarding the child's health condition.

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Paternity leaves

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Fathers or partners who actively participate in caring for a child are eligible for 10 days of paid leave, regardless of whether the child is born within or outside of marriage or adopted. This leave period extends to 15 days if the employee completes an infant care course. Paternity leave can be taken within the first eight weeks following the child's birth, and it requires a written request to the employer, along with the child's birth certificate.

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The paternity leave benefit is financed from the employer's salary fund and is considered taxable income for the employee.

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In the unfortunate event of the mother's death during childbirth or maternity leave, the child's father is entitled to specific benefits:

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a) An allowance equivalent to what the deceased mother would have received as maternity allowance, if the father hasn't completed the necessary insurance period for medical leave benefits.

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b) A maternity-related allowance determined by the father's income if he meets the requirements for medical leave benefits.

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These allowances are covered by the employer's salary fund where the father is employed.

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‍Tax and Social Security contribution:

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Employee Income tax

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Termination 

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The process of ending employment differs depends on: 

• the type of contract
• the reason for termination; and 
• the terms specified in the employment and collective agreements

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Individual employment contracts can be terminated in several ways:

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• According to legal regulations
• With the agreement of both parties
• In accordance with the terms and conditions outlined in the law

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Employers can terminate employment contracts for reasons related to the employee (like disciplinary actions due to professional inadequacy) or reasons not linked to the employee (such as job elimination).

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Severance Pay

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Romania does not have a legally mandated severance pay requirement unless it has been specified in a collective agreement.

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Notice Period

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In the event of an employee being dismissed, the notice period in Romania is a minimum of 20 working days, and this applies to all positions, regardless of the type of employment contract.

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Employees also have the option to terminate their employment by resigning, provided they give advance notice. For non-management positions, the notice period is a maximum of 20 business days, while for management positions, it is 45 business days.

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Probation period

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The length of the probationary period in Romania is determined by the specific role and is specified in the employment contract. Typically, probation periods last for 90 calendar days but can extend to 120 calendar days for employees in managerial or supervisory positions.

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Expanding globally involves complex compliance challenges. Gloroots simplifies this for you. Our experts handle cross-border employment and payroll compliance, from contracts to payments, so you can focus on talent screening. Enjoy a stress-free global hiring experience for both you and your employees. Contact our experts to kickstart your global hiring campaign in Romania today.

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Our promise is a stress-free global employment experience for both you and your employee.

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Contact our experts today to kickstart your global hiring campaign.

Expanding your team involves recruiting the right talent at the right time and for the right roles. In Romania, achieving this requires setting up a local entity to handle compliance, payroll, taxes, and benefits management, which can be complex due to intricate employment regulations.

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That's where Gloroots's global Employer of Record (EoR) service comes in. With Gloroots, you can delegate the heavy lifting of payroll, tax, benefits, and compliance, allowing you to prioritize what matters most to you: your employees and your company's growth.

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