Hire in Romania

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Last updated at November 22, 2022

Currency

Romanian Leu (RON)

Capital

Bucharest

Time Zone

GMT+2

Key Country Facts

Introduction

The political framework of Romania is a semi-presidential representative democratic republic. The prime minister is the head of government while the president represents the country internationally, signs some decrees and approves laws promulgated by parliament as well as nominations as head of state. Romania maintains a multi-party system, with legislative power distributed between the government and the two chambers of parliament: the chamber of deputies and the senate.

Area

Romania covers an area of 238,397 square kilometers and sits at the confluence of Central, Eastern and Southeastern Europe. The country shares borders with Bulgaria to the south, Ukraine to the north, Hungary to the west, Serbia to the southwest, Moldova to the east and the Black Sea to the southeast.

Climate

Romania’s climate is temperate and continental, offering four distinct seasons. There are some regional differences. In western sections (Banat), the climate is milder and has some Mediterranean influences while the eastern part of the country has a more pronounced continental climate.

Culture

Modern Romanian culture reflects largely Eastern European influences but also shares several similarities with other ancient cultures (e.g. Armenian). Political ideas, administration and law were modeled after France from the mid-19th century to World War I and, thereafter, by German culture. With the arrival of Soviet Communism, Russian was also widely taught during Romania’s socialist years.

Religion

Romania is a secular state and has no state religion. However, 81% of the population identify as Orthodox Christians belonging to the Romanian Orthodox Church. Other denominations include Protestantism (6.2%), Roman Catholicism (4.3%) and Greek Catholicism (0.8%). There is a small minority of Muslims, Jewish and atheists.

Official Language

Romanian is spoken as a first language by approximately 90% of the entire population while Hungarian is spoken by 6.2% of the population. Minority languages such as Ukrainian, German, Turkish and Vlax Romani are also spoken. English is spoken by 31% of Romanians and French is spoken by 17%.

Romania HR at a Glance

Employment Law

Employment law in Romania is primarily derived from the constitution, European Union legal instruments (e.g. EU law including treaties, regulations and directives), standards established by the International Labor Organisation), the Romanian Labor Code, legislation as well as government decrees, case law, collective labor agreements and individual employment contracts. 

Separate statutes (mainly laws and government ordinances) deal with matters such as parenthood-related leave and benefits, sick leave, maternity protection, temporary agency work and teleworking.

Romanian law governs parties to an employment contract in the below situations. It is not possible to elect an alternative jurisdiction to govern the employment in these scenarios: 

  • A Romanian employee is performing work within Romania. 
  • A Romanian employee is performing work abroad, for a Romanian employer, unless the legislation of the country where the employment contract is performed is more favorable.
  • A foreign citizen is performing work in Romania for a Romanian employer; 
  • The employee has acquired refugee status and is employed in Romanian territory.

Employment Contract

By default, the individual employment contract is an unlimited term contract. However, the individual employment contract may also be a fixed-term contract or part time if specified. 

Any category of individual employment contract must be concluded in writing, in Romanian and with both the employer’s and the employee’s consent. An employment contract not in writing is null and void.

Employment contracts must not contain provisions contrary to applicable collective agreements or provide for entitlements lesser than collective agreements. 

Collective bargaining contracts 

Trade unions, federations and confederations have additional rights in collective bargaining if they are deemed to be ’representative.’ This means they are independent bodies that meet the statutory definition of a trade union.

A collective agreement is a written agreement on pay, employment conditions and other rights and obligations arising from employment relationships between an employer or employers’ association. The agreement can also be made with a trade union representing employees or, in some cases, with elected employee representatives.

Collective agreements can be negotiated at single-employer or multi-employer level. There are two permitted forms of multi-employer agreement:

Industry-level collective agreements are signed by employers’ associations that employ more than 50% of all employees in the industry

Group-level collective agreements cover a number of employers in the same industry. They are signed by representative employers’ associations that need not employ more than 50% of all employees in the industry.

Alternatives for Employment Contract – 

Contracts for Services

The contractor must be able to provide the services independently and such an agreement cannot be entered into for the purposes of avoiding an employment contract.  If the contractor is deemed to be under the company’s control, he/she will be considered an employee.

Temporary Agency Work Contracts

Workers employed by an authorized temporary work agency are assigned to work temporarily for a client company to perform ‘precise and temporary’ tasks. The maximum length of an agency worker’s initial assignment with a client company is 24 months in Romania. This can be extended more than once but the total duration of an assignment must not exceed 36 months.

Management Contract

Directors/Managers of a limited liability company in Romania can be employed under a management contract. In joint stock companies, a management contract instead of an employment contract for management/directorship positions is mandatory. For management contracts, general commercial and civil law determines the contractual relationship.

Other contract types include part time, homeworking and teleworking contracts. 

**Teleworking Contracts **

A new law for teleworking was passed by the Romanian Parliament in 2018. The individual employment agreements of the employees performing teleworking must include specific provisions set out in the Teleworking Law: 

  • duration and/or days during which employee works in a workplace organized by employer
  • location where teleworking will be performed, as agreed by the parties
  • how hours worked will be recorded
  • schedule for the employer’s inspection and the method of inspection
  • responsibilities of the parties, including issues on labor health and safety
  • obligation of the employer to transport materials used or required by the employee
  • the employer must inform the employee on data protection matters
  • measures taken by the employer to avoid isolation of teleworker from other employees
  • conditions under which the employer covers costs related to the teleworking

The Teleworking Law also establishes specific obligations for employers: 

  • to make available the necessary IT/health and safety equipment (unless otherwise agreed)
  • to install, verify and maintain the necessary work equipment (unless otherwise agreed)
  • to ensure all the conditions are met and that employee is aware of information regarding health and safety in the workplace.

Apart from the right of the employer to regularly check the activity of the employee, the labor authorities as well as the trade union/representatives of the employees retain the right to quality the working conditions of the teleworker. 

Telework is possible only with the consent of the employee. The consent must be expressed in the employment contract or, in the case of an already existing employment contracts, in an addendum. 

Contract Terms

An employment contract in Romania must stipulate the following details:

  • the name and addresses of the parties
  • the place of work
  • the job description 
  • employer’s criteria for evaluating the professional activity of the employee
  • the job specific risks
  • the employment start date
  • the duration of the employment (for fixed-term or temporary contracts)
  • the duration of paid leave
  • notice periods and conditions for both dismissal and resignation
  • base salary, bonuses and frequency of payment
  • normal duration or work (expressed in hours per day and per week)
  • the applicable collective labor contract (if applicable)
  • the duration of the trial period (if applicable)

Fixed Term Contracts

Fixed-term employment is only permissible in Romania if it is justified by a reason. The following are the general circumstances where fixed-term employment is allowed:

  • temporarily replacing an employee whose contract has been suspended (unless the employee replaced is taking part in a strike) 
  • temporary increase or modification in the employer’s activity
  • seasonal activities
  • employing a person who, at the time of recruitment, is within five years of reaching official retirement age 
  • employing a retired person who is combining paid work with receiving a pension
  • specific project work
  • as part of employment-promotion programs for unemployed individuals

A fixed-term employment contract must be in writing and its duration must be stated. The maximum permitted duration of a fixed-term contract is 36 months. The same parties can enter into a maximum of three successive fixed-term contracts (with a gap between contracts of three months or less) with a combined duration of no more than five years.

If a fixed-term contract is concluded to replace an employee whose contract has been suspended, the term will end when the reasons for the suspension cease to apply (e.g. when an employee on maternity leave returns to work).

Pre-Employment Hiring Examination

An employee must produce a medical certificate confirming they are fit to perform their job before commencement of employment. The employment contract becomes null and void if this certificate is not produced. 

The employer is required to ensure candidates and employees have access to medical service throughout the execution of the individual employment contract. When in employment, as required by Article 186 of the Labor Code, a doctor must evaluate the employee’s ability to work. The costs of the medical examination are to be borne entirely by the employer. 

Probation / Trial Period

Employees may be subject to a probation period of up to 90 days and 120 days for executive/managerial positions. 

In the case of fixed-term employment contracts:

  • Contract duration < 3 months: 5 working days
  • Contract duration at 3 to 6 months: 15 working days
  • Contract duration > 6 months: 30 working days, 45 working days for managerial employees

During the probationary period, the employee enjoys the same rights and duties as other employees. The period also counts towards their length of service. Both employer and employee are entitled to terminate the contract, in writing, without any need to give notice or state a reason during this time.

Working Hours

  • The normal working week in Romania is eight hours per day and 40 hours per week. The normal work week is five days. 
  • An employee is entitled to at least 12 consecutive hours between two successive working days. In the case of shift work, the break must not be less than eight hours between shifts.
  • An employee is entitled to at least two consecutive days rest per week, generally Saturdays and Sundays. If there is a need for the employee to work on rest days, the employee must be given time off during the week or additional remuneration.
  • The maximum work time must not exceed 48 hours/week, including overtime hours. If the work week including overtime is greater 48 hours, the average number of work hours cannot exceed 48 hours/week averaged across a four-month period.
  • For certain activities, employer and employee can negotiate a period of more than four months but this cannot be more than 12 months.

Overtime

Any hours worked above eight hours per day or 40 hours per week are considered overtime. These hours must generally be compensated with time off in lieu. Employees cannot work more than eight hours of overtime per week.

Overtime must be compensated with paid time off within 60 days of its occurrence or at an overtime premium of at least 75% of base salary.

Suspension of Contract

The employment contract can be suspended temporarily in the below circumstances, with employment rights and obligations maintained even though employer does not have to pay remuneration:

  • maternity leave or sick leave
  • in quarantine
  • elected to a public office or full-time paid trade union position
  • taken into custody in relation to being charged with a criminal offense
  • needs an authorization or license to carry out their occupation but this has expired
  • vocational training leave

Notice Period

The notice period can be agreed by the parties in an individual employment contract or as provided in the applicable collective labor agreements. 

In the case of resignation, the notice period is a maximum of 20 working days for employees in non-management positions and 45 working days for management employees. 

An employee can resign without notice if the employer has failed to fulfill its contractual obligations.

During the notice period, the employee is entitled to receive his or her salary and all other statutory rights.

Notice period is not required when an employee is under probation and deemed to be unfit for the role.

Bonus

It is common for companies to offer their employees bonuses and benefits, based on the company’s profitability and employee’s performance. However, it is considered a gratuity and is not required by law. In some cases, these benefits are set out under collective labor agreements or employment agreements, in which case they can only be changed with the employee’s consent.

Termination

Terminations should be issued by the legal employer only.

An individual employment contract can be terminated in the following circumstances:

  • the death of the employee or the employer 
  • when the employee reaches the age of retirement
  • when the parties acknowledge, or a court rules, that an individual employment contract is null
  • for an employee who replaced an illegally dismissed employee (upon the reinstatement of the illegally dismissed employee)
  • when an employee is convicted for the execution of a custodial sentence
  • when consent, authorizations or permits required for the profession are withdrawn
  • at the expiration date of the individual employment contract (if there is a determined period)
  • at the employee’s initiative (by submitting his or her resignation;)
  • at the employer’s initiative, within the conditions stated by the law (employee’s misconduct or professional incapacity) or due to economic difficulties, technological transformations or activity reorganization. 

Terminations due to incapacity (professional, mental or physical) must be issued in writing within 20 working days after determining the reason for dismissal. The notification must state the reasons for the dismissal, the relevant facts, the law and the deadline for contesting the decision in court.

In these scenarios, there should be an assessment of the employee’s performance and aptitude. The employer must offer vacant positions in the establishment that are compatible with their professional, mental and physical capacity (or vocational training). If the employer offers the employee a suitable job, the employee has three working days to accept, failing which the employer may dismiss them. The dismissal notification must contain a list of the available jobs offered and the deadline for accepting.

An employee dismissed on grounds of medical incapacity is entitled to compensation. This amount is determined by the employment contract.

If the dismissal is connected to the employee’s misconduct, an investigation should be conducted within a six-month period from the date misconduct was committed. Non-compliance with these requirements can result in the termination being invalid. 

In the case of termination due to redundancies (economic difficulties, technological transformations or activity reorganization), the employer is required to give the employee statutory notice of dismissal and inform the employee 20 working days in advance. For such a dismissal to be valid, the position itself must be genuinely eliminated and not filled by another employee (or maintained under a different guise).

Payment in lieu of notice is not permitted as it violates an employee’s legal right to receive notice.

Employers may not terminate the employment contract in the following situations:

  • employees who are temporarily incapacitated to work (with evidence of a medical certificate)
  • employees on quarantine leave
  • if the employer has knowledge that a female employee is pregnant
  • during maternity leave, paternity, parental, adoption or care leave
  • during maternal risk leave
  • during annual leave

Redundancy / Severance Pay

There is no statutory provision for severance payments – except for the minimum notice period – but compensation may be provided for by employer’s internal regulations or collective bargaining agreements.

Post-Termination Restraints / Restrictive Covenants

Non-competition clause

A non-competition clause can be included in the employment contract, either when employment starts or during employment. The employer must pay the former employee a monthly allowance during the whole of the period when restrictions apply. In order to be valid, the non-competition clause must state:

  • the activities the employee is prohibited from carrying out
  • the third parties the employees cannot work for
  • the geographical area within which the restrictions apply
  • the monthly allowance (which must be at least 50% of previous gross monthly wages)
  • the duration of the restrictions (generally no longer than two years after termination)

Confidentiality clause

The employer and the employee agree not to divulge — during or after the employment relationship — certain information that they have become aware of during the employment relationship. The information concerned should be stipulated in the employment contract, in the employer’s internal rules or an applicable collective agreement. If either party breaches the clause, they are liable for damages caused to the other party.

Tax and Social Security

Personal Income Tax

Romania applies one of the lowest personal income taxes applicable at the level of the European Union (EU). It is only 10%. Employers are required to deduct the income tax due on employees’ pay and remit it to the tax authorities.

Income tax payment is exempted for IT and R&D employees, employed persons with disabilities or workers in specific seasonal activities (tourism and food services). 

Salary, allowances, bonuses, awards and benefits in cash and in kind are considered taxable income. 

There are pre-tax allowances for childcare, education and other key expenses. 

The employer must pay monthly contributions and income tax for its employees. The company is also liable to remit a set of monthly social contributions due on the 25th day of the following month for which the payroll is processed.

Contributions and Income Tax Employee Contribution (%) Employer Contribution (%)
Income Tax* 10.0 NA
Health Insurance Contribution 10.0 NA
Social (Pension) Insurance Contribution 25.0 0.0**
Work Insurance Contribution*** NA 2.25
TOTAL 45 2.25

*people with disabilities and employees in areas (e.g. information technology, construction) are exempt from paying any income tax

**4% for particular working conditions and 8% for special working conditions, 0% for normal working conditions

***this funds sickness benefits, unemployment insurance and occupational accident/illness insurance

The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.

Social Security

All employed and self-employed persons with a residence permit must pay social security contributions (pension and health insurance), as required by fiscal legislation, in order to become insured.

Employees

Salary Payment

The employer must pay the employee their wages at least monthly, with the date of payment set by the employment contract. Wages must be paid to employees by direct bank transfer or in cash.

Payslip

Employers are not required to provide itemized payslips to employees, though this is common practice.

When wages are paid, the employee will receive his or her payslip via email as proof of payment, as agreed upon in the employment contract.

Timesheets / Record Keeping

Employers must keep a record of the daily hours worked by each employee and include the calculation for all contributions of the employer and employee as well as the tax on income.

These records must be made available for inspection by the labor authorities at each workplace.

Annual Leave

  • Romanian employees are entitled to a minimum 20 days of paid annual leave. This must be taken as one unbroken period of at least 15 working days and the rest can be taken according to how the employee requests it.
  • Annual leave must generally be taken within the year earned. However, under the terms of a collective bargaining agreement, unused leave can be carried over to the end of the following year
  • Employees cannot forfeit their right to paid annual leave.
  • The following groups of employees will be entitled to at least three extra days of annual leave each year: the disabled and blind, employees under 18 and those working under heavy, hazardous or harmful conditions.

Sick Leave

  • Employees are entitled to be paid for up to five days of sick leave with a compensation of 75% of salary. The maximum period of sick leave is 183 days or up to 18 months in the case of a serious illness. Compensation will be provided by the state for a sick leave period exceeding five days.
  • Employees who are absent from work because of an illness or an injury are generally entitled to receive the sickness benefit, set at 75% of their average pay, for up to 183 days per year. The employer pays the benefit for the first five days of absence and then the state social insurance fund takes over.

Care Leave

Employees may generally take up to 45 days of leave per calendar year for the below circumstances. These may be extended in certain cases of surgery or contagious disease:

  • a sick child less than 7 years of age
  • a child with a serious illness less than 16 years of age
  • a child with a disability less than 18 years of age

During this leave to care for a sick child, employers do not need to pay the statutory entitlements but the employee is entitled to a benefit set at 85% of their average pay (if they have been insured with the state social health insurance scheme for at least six of the past 12 months).

Compassionate & Bereavement Leave

  • Marriage: five days
  • Marriage of an employee’s child: two days
  • Death of a spouse, child or parent: three days
  • Death of a sibling or grandparent: one day
  • Moving house: five days
  • Female employees undergoing IVF: three days per year
  • COVID-19 vaccination: one day
  • Employees with children less than 18 years (or less than 26 years in the case of children with disabilities) receiving COVID-19 vaccination: one day

Maternity & Parental Leave

Maternity Leave

  • Working mothers are entitled to take 126 calendar days (18 weeks) of maternity, of which 42 calendar days (six weeks) must be taken immediately following the birth. The pregnant employee must inform the employer of the impending maternity leave in a timely manner. 
  • In principle, half the leave entitlement should be taken before the birth and half after. However, the employee may choose a different distribution as long as at least six weeks are taken immediately after the birth. During maternity leave, employers do not need to pay the statutory entitlements but if the employee has been insured with the state social health insurance scheme for at least six of the past 12 months, they are entitled to a benefit set at 85% of their average pay. This applies up to a maximum of 12x the National Minimum Wage. 
  • Upon returning to work from maternity leave, employees are entitled to undergo a reintegration program lasting at least five working days.
  • If the child is stillborn or dies during the postnatal leave period, the employee is entitled to the full period of maternity leave and benefit. If the mother dies during childbirth or during the postnatal leave period, the remainder of the leave and benefit entitlement may be transferred to the child’s father.

Paternity Leave

  • Employees who are fathers and are covered by the social insurance system are entitled to paid paternity leave in the 8 weeks after the birth of their child. The standard entitlement is 10 working days.
  • If the employee has completed a recognised parenting class, they are entitled to an additional 5 working days (i.e. total = 15 working days of paid paternity leave) for each newborn child.

Parental Leave

  • Employees who are parents are entitled to take parental leave in the period up until their child’s 2nd birthday (or 3rd birthday if the child has a disability). Mothers cannot take parental leave until their maternity leave ends. 
  • This entitlement applies only to employees who have earned taxable income for at least 12 months in the two years before the child’s birth. While both parents can take parental leave, if eligible, only one parent can take leave at any time. If both parents are eligible to take parental leave, each parent must take at least one month’s leave during the first year. Otherwise, one month’s leave entitlement is lost. 
  • During parental leave, employers do not need to pay the statutory entitlements but employees are entitled to a social insurance benefit set at 85% of their average pay. Parents may receive a supplement as an incentive if they return to work at least partially for a certain period before the end of their parental leave.
  • Parental leave and benefit is available to adoptive parents in the same way as biological parents. This is offered in addition to Adoption Leave. 
  • Parents of children with a disability may take a form of extended parental leave, known as leave to care for a disabled child, after the child’s third birthday (when parental leave entitlement ends) until the child reaches the age of seven years. During this unpaid leave, employees are generally entitled to receive a flat-rate social insurance benefit.

Adoption Leave

  • Employees (and their spouses) who adopt a child are entitled to take adoption leave for up to one year if they are covered by the social insurance system. This begins from the date that the adoption is officially approved by a court. During adoption leave, employers do not need to pay the statutory entitlements but the employee is entitled to a social insurance benefit set at 85% of their average pay.
  • Employees (and their spouses) who are seeking to adopt a child are entitled to a maximum of 40 hours paid time off per year to attend the meetings and evaluations for adoption.

Other Pregnancy/Breastfeeding Provisions

  • If a pregnant employee is medically certified as being unable to perform her full working hours for health reasons, she is entitled to reduce her hours by 25% without loss of pay.
  • Pregnant employees are entitled to up to 16 hours of paid time off per month to attend antenatal medical consultations and examinations (if these can be held only during working hours).
  • Employees who are breastfeeding are entitled, up until the child’s first birthday, to two paid one-hour breaks each day for this purpose. Alternatively, the employee can choose to reduce her normal daily working time by two hours without loss of pay.

Leave when Educational Activities are Suspended

  • The employer is required to grant employees paid days off throughout the 2021-2022 school year in which the physical presence of children in educational activities is limited or suspended provided certain conditions are met (e.g. the activity of the employee cannot be performed via telework or the other parent does not receive paid days off).
  • The allowance paid under the above conditions is 75% of the basic salary corresponding to one working day. A maximum of 75% of average gross income per day can be reimbursed from the state budget.

Public Holidays

There are 15 official public holidays per year in Romania.

Employees required to work on a public holiday are entitled to a day off in lieu within 30 days. If the employer is unable to grant the day off, the employee is entitled to double pay for the work performed on the public holiday.

Benefits to the Employee in Romania

Statutory Benefits

The Romanian pension scheme is based on a system with pension points. There are five types of pensions in Romania:

 

  • standard retirement (old age pension)
  • early retirement 
  • partial early retirement 
  • disability and 
  • survivor’s pension

The amount of old age pension is calculated on the basis of the contribution period, the level of income that was used to calculate social insurance contributions and the value of a pension point. Since September 1, 2019 the value of a pension point is 1265 Romanian lei.

To receive old age pension, Romanian citizens and foreigners with permanent residence permit in Romania must meet the below conditions:

  • They must have contributed for at least 15 years to the pension scheme. 
  • The standard retirement age is 63 years for women and 65 for men

Thanks to the international agreements and conventions which Romania has established with other nations, all social security rights from the public sector can be transferred to the country in which citizens establish their residence or domicile.

Romania has had a pension system based on three pillars, until February 2020 when a fourth Pillar was introduced:

  • 1st Pillar – This pillar is mandatory and administered by the state. Social pensions paid by taxpayers are used to pay for standard public pensions.
  • 2nd Pillar – This pillar is mandatory for persons less than 35 years of age and voluntary for persons 35 to 45 years of age. This is privately administered and constituted by transferring a percentage of an individual’s social insurance contribution. Benefits are based on individual contributions and investment earnings.
  • 3rd Pillar – This pillar is voluntary, and privately administered. Contributions are deductible from income tax and cannot exceed 15% of the contributor’s gross salary. 
  • 4th Pillar (implemented February 2020) – This pillar can be implemented by each employer and comprises contributions of the employer and the employee. This cannot exceed one-third of employee gross salary

Other Typical Benefits

  • private healthcare
  • additional vacation days
  • mobile phone
  • laptop
  • travel expenses reimbursement

Visas and Foreign Workers

General Information

EU and EEA citizens have unrestricted access to the labor market in Romania and do not require work permits. An EU citizen staying for more than three months in Romania will be required to ask Immigration Romania to issue a residency card.

For non-EU and non-EEA citizens, in addition to the general conditions required under the Labor Code, an appropriate visa (business visa or employment visa) from the National Authority for Foreigners and a work permit from the National Office for the Movement of Employees are required. The work permit is issued for a one-year period. The number of working permits issued every year is limited and is determined by government decision. Employers must prove that they have made an effort to recruit a Romanian for the role.

When hiring foreign citizens, business visas are usually issued to foreigners who are members of management or supervisory boards of Romanian companies. These non-EU foreigners must apply for either a short-term or long-term business work permit.

There are special work permit schemes for groups such as highly skilled workers, intra-corporate transferees, seasonal workers and trainees. Permits for highly skilled workers have a duration of up to two years and are renewable. However, holders of these permits must be paid at least double the average national wage.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Day January 1st
2. New Year Holiday January 2nd
3. Union of the Romanian Principalities January 24th
4. Orthodox Good Friday April 22nd
5. Orthodox Easter Sunday April 24th
6. Orthodox Easter Monday April 25th
7. Labour Day May 1st
8. Children’s Day June 1st
9. Orthodox Whit Sunday June 12th
10. Orthodox Whit Monday June 13th
11. Assumption Day August 15th
12. Feast of Saint Andrew November 30th
13. Great Union Day December 1st
14. Christmas Day December 25th
15. Second Day of Christmas December 26th

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