Employer of Record in Romania

Globally, an Employer of Record (EOR) acts as the legal employer for staff while the client company directs day-to-day work. The EOR handles contracts, payroll, tax, benefits, and compliance, removing the need for the client to set up a local entity.

Hiring in Romania is not as straightforward as in some other European markets. While the Employer of Record (EOR) model is widely promoted as a way for international companies to hire quickly without setting up a local entity, the legal framework in Romania adds an extra layer of complexity.

Under Romanian labour law, the only compliant way to deliver what most providers call “Employer of Record/EOR” is through the Temporary Agency Work framework. This means that the service provider must be licensed as a temporary work agency, employ the individual directly, and then assign them to work for the client company, which acts as the “user undertaking.”

For employers, this distinction matters. Without the proper licence, an EOR arrangement risks being treated as unlawful staff leasing or even misclassification. With the licence in place, however, the model can offer exactly what global businesses are looking for: the ability to put people on the ground quickly, pay them compliantly, and stay aligned with Romanian labour law.

Legal Framework for Talent Engagement in Romania

Romania’s Labour Code is clear on how workers may be engaged, and each model comes with its own legal and compliance obligations. Foreign companies considering Romanian hires need to align with one of the following recognised structures:

• Direct employment through a local entity (SRL): The most straightforward route, but it requires incorporation, tax registration, and ongoing statutory filings.
• Temporary Agency Work: The only mechanism that enables a third party to employ staff and assign them to a client company. The agency must hold a licence, guarantee equal treatment for the employee, and register contracts in the national ReviSal system.
• Independent contractor arrangements: Individuals may work as registered sole traders (PFA) or through micro-companies. This is lawful if the relationship reflects genuine independence, but any element of subordination or exclusivity risks reclassification as employment.
• Outsourcing and service contracts: A Romanian supplier may contract to deliver a defined service outcome with its own employees, provided control and supervision remain with the supplier, not the client.

These are the lawful pathways. Any arrangement that bypasses them, for example, an unlicensed “EOR” employing staff without recognition as a temporary agency, exposes both provider and client to compliance and tax risks.

Key Compliance Specifics in Romania

Employment in Romania is highly regulated. Contracts must be issued in writing and registered in the national labour authority’s system before work starts.

Since April 2025, companies have been required to use the new REGES-ONLINE platform instead of the older ReviSal system, with fines in place for late or missing registrations.

Pay must track statutory increases. The gross minimum wage was raised to RON 4,050 from January 2025. Equal-treatment rules also apply to agency workers, meaning their pay and core conditions must align with comparable direct employees at the user company.

Working time, overtime, public holidays, and paid leave are tightly regulated. Payroll requires strict monthly withholding and remittance of income tax and social security contributions.

Authorities in Romania also take a strict view of misclassification. If an individual engaged as a contractor is in practice working fixed hours, under close supervision, or exclusively for one client, the relationship can be reclassified as employment.

In such cases, back-dated taxes, contributions, and penalties may apply. A licensed agency or compliant EOR partner helps prevent these risks by aligning documentation and practices with Romanian law.

When Companies Turn to an EOR in Romania

Foreign companies usually look to an Employer of Record arrangement in Romania when speed and compliance are both priorities. Typical scenarios include:

1. Testing the market before incorporation
   A business may want to explore Romania’s labour pool or run pilot operations without committing to the costs and delays of establishing a subsidiary. A licensed EOR provides a way to employ staff legally while evaluating the market.
2. Hiring a single employee or small team
   Setting up a company for one or two hires is rarely cost-effective. The EOR model allows those staff to be on payroll and covered by Romanian labour law from day one, without entity setup.
3. Converting contractors into employees
   Romania’s labour inspectors are vigilant on misclassification. Companies relying on freelancers who in practice work like employees may need to transition them to compliant employment contracts. An EOR can make this switch without requiring the foreign client to create a local entity.
4. Employing expatriates
   Non-EU nationals require both a work permit and residence authorisation. These can only be secured through a recognised Romanian employer. An Employer of Record (EOR) in Romania with the correct licence can act as sponsor, handle the formalities, and place the expatriate with the client company.
5. Project-based or time-limited work
   Temporary projects in Romania may require a workforce for months rather than years. The agency model allows compliant short-term deployment, with contracts aligned to project timelines.
6. Multi-country expansion
   Where Romania is just one of several new markets, a Global EOR can centralise compliance and payroll while applying the Romanian framework locally. This avoids fragmented local arrangements and ensures consistent documentation.

Key Risks and Pitfalls for Foreign Employers

• Unlicensed Providers: A major pitfall is partnering with a provider that claims to offer "EOR" services but lacks the required temporary work agency license. In Romania, the compliant EOR model operates under this specific license. Without it, the employment arrangement is not legally recognized, exposing both the foreign employer and the worker to significant liabilities. The EOR provider, as the legal employer, must be authorized to act as a temporary work agent for the arrangement to be valid.
• Worker Misclassification: Romania's labor authorities are vigilant about distinguishing employees from independent contractors. A worker is likely to be considered an employee if the client has direct control over their work, sets their schedule, and provides the tools or equipment. Misclassifying such a worker as a contractor to avoid taxes and benefits is a serious offense. If caught, the foreign employer may be liable for back taxes, social contributions, and fines, as the relationship will be retroactively reclassified as a compliant employment contract.
• Non-registration of Contracts: All individual employment contracts in Romania must be registered with the national electronic system, REGES-ONLINE, no later than the day before the employee's start date. This is a mandatory and actively enforced requirement. Failure to register a contract on time is considered a form of "undeclared work" and can result in substantial fines for the employer. This is a critical administrative step that cannot be overlooked.
• Equal Treatment for Agency Workers: Under Romanian law, temporary agency workers, including those engaged through a licensed Employer of Record (EOR), are entitled to the same pay and working conditions as direct employees of the client company who perform similar work. This includes salary, bonuses, working hours, rest periods, and access to company facilities. The principle of equal treatment is a core tenet of Romanian labor law and is designed to protect temporary workers from exploitation. A compliant partner ensures that all compensation and benefits are benchmarked and aligned with local market standards.

These legal requirements are actively monitored and enforced by Romanian labor authorities. Partnering with a compliant, licensed provider is essential for navigating this landscape successfully.

How Acumen Supports Global Hiring in Romania

Acumen International enables foreign companies to hire in Romania without setting up a local subsidiary, while ensuring every step complies with national labour law. Our support covers the full cross-border employment cycle:

• Employment contracts and registration. We draft and file compliant agreements in REGES-ONLINE before work begins.
• Payroll and contributions. Monthly payroll runs, payslips, and statutory filings are handled in line with Romanian deadlines.
• Compliance oversight. We monitor legislative changes, including frequent revisions to labour and tax rules, and adjust employment terms accordingly.
• Immigration support. For expatriate staff, we sponsor work permits and residence authorisations, ensuring legal right to work before placement.
• Benefits and leave. We administer statutory benefits, paid leave entitlements, and, where required, supplementary packages.
• Risk management. Every assignment is documented to withstand inspection, reducing exposure to misclassification or licensing challenges.

This comprehensive hiring solution in Romania allows our clients to direct their staff day-to-day while Acumen assumes the role of legal employer. It provides a compliant, auditable solution for market entry, project-based teams, contractor-to-employee conversions, and expatriate hiring.