- Overview: Romania
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in Romania
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Romania Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Romania, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Romania and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Romania.
Hiring and Firing Workforce in Romania Guide
With the central location of Romania, political-social stability, fast growing IT market and membership of EU which has opened many opportunities including accessibility to huge market base and relatively cheap, but highly qualified workforce, the country has become a good point of attraction for businessmen who wish to expand their businesses in CEE region. That said, there are a few formalities that are required to enjoy the advantages of doing business in Romania and these include familiarizing and complying with the labor laws of the country, as well as attracting, employing and retaining eminently suitable labor force for your business. These as ever, can be a daunting task!
Acumen International, a global Professional Employer Organization (PEO) has designed a workable solution that can help you work through the long involved processes of doing business in Romania.
# Employment Contract
As a statutory prerequisite for employment relationship in Romania, a contract of employment must be drawn up in writing, registered with the Labor Inspectorate and signed by both parties of employment. An employment contract must include the necessary information about the employer and employee, job description, including the workplace address, location and possible risks, contract commencement date, working hours, remuneration package (time and frequency), annual leave entitlements and applicable collective agreement. A fixed-term contract may have up to 12 months duration and be extended two times up to 36 months. A contract can be modified after it has been concluded, but on condition that the employer must give the employee a written notice about the intended changes and the Labor Inspectorate (within the space of 5 days). The medical check before concluding the employment contract is mandatory.
# Minimum (Statutory) Employment Rules and Regulations in Romania
Hours of work
Employees in Romania have a 5-day week to work on an 8-hour per day basis and a 40 hour per week basis. Saturdays and Sundays are not considered as workdays, hence must be given to the employees as their weekly rest. Working night shift (between 10 p.m. and 6 a.m.) is permitted.
Employees with definite and indefinite contract may be placed on probation. For definite contract, the probation can last till 5 days if it’s a contract of less than 3 months duration, till 15 days if it is 3-6 months contract, 30 days for more than 6 months contract and 45 days for employees of managerial positions who have more than 6 months contract. Probationary period for an employee with an indefinite contract can last till 90 days for administrative workers and 120 days for those with executive functions.
Romanian Labor Code allows 12 public holidays: New Year’s Day, Day after New Year’s Day, The first and second days of Easter, Labor Day, Dormition of the Theotokos, Saint Andrew’s Day, National Day and Christmas. Employees who hold different religious beliefs other than Christianity, and whose religious sects are recognized by the state have the right to extra 2 days off for each of the 3 holidays set by their religion.
In addition to the public holidays, employees have the right to receive at least 20 working days of annual paid vacation. Employees on annual leave are entitled to receive a pay (within 5 days prior to the start of the leave) that must not be less that their basic wage plus bonuses and other permanent benefits ordinarily entitled to them. Annual leave must be taken within the given year and cannot be compensated in money unless at the termination of the employment contract.
Pregnant women are entitled to 126 days maternity leave paid at 85% of their average salary over the last 12 months. This leave may be granted both before and after birth. However, at least 42 days of maternity leave must be taken after giving birth. A male employee with new baby has the right to take time off during the first month, 5 days within the first 8 weeks of the baby’s arrival. Parental leave can be taken up to 24 months with the allowance at 85% of their net salary over the previous12 months. It is obligatory for parents to share 1 month out of the 24 months allowed; if this month is not taken up by the other parent, the Parental leave is shortened, with a loss of benefit payment for that month. Employees on maternity leave cannot be terminated until the end of the period.
Employees participating in the social insurance system and have contributed as required are eligible for a maximum period of 183 days of paid sick leave. The duration of temporary disability indemnity may be higher for special diseases (tuberculosis, cancer, some cardiovascular diseases). Sick leave benefit must be paid at a rate of 75% or 100% of the employee’s average salary for the last 6 months, depending on the type of disease and how it occurs.
Under law, the total working hours an employee can work in an average week must not exceed 48 hours including overtime. Here average week is calculated over a four months period. Employers are obligated to compensate for overtime at a premium rate of at least 75% of base pay or a paid time off within 60 days of working overtime.
State minimum salary
As at 1st Jan. 2018, the monthly minimum wage is 1900 lei ($498) per month; else 11.4 lei ($2.92) per hour for a full-time schedule of 168 hours per month.
Employers are obligated to give their employees a 20-day notice of termination prior the D-Day of termination. Upon termination, employees must be paid in cash for any unused leave entitlement earned during the period of service. Employees may be paid a severance pay if it is clearly provided for in the employment contract or the collective agreement.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Romania by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any requirement to set up a legal entity first or thereafter.