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Hiring in Romania

When negotiating terms of an employment contract and offer letter with an employee in Romania, it may be useful to keep the following in mind.

Employment contracts in Romania

In general, the individual employment agreement is established as an indefinite term. Nevertheless, it can also take the form of a fixed-term agreement in the following circumstances:

• Replacement: When an employee’s contract is temporarily suspended (except during a strike) and another professional is hired to fill the position temporarily.
• Temporary changes: When there is a temporary increase or structural change in the employer’s activities that requires additional team members.
• Seasonal work: For jobs that are seasonal in nature, where employment is needed during specific times of the year.
• Legal favor: When a legal provision is enacted to support specific categories of unemployed individuals for a temporary period.
• Pre-retirement: To employ someone who will meet the age-based retirement conditions within 5 years from their employment start date.
• Mandate-based: To hire an individual for a specific position within a trade union, employers’ organization, or non-governmental organization for the duration of their mandate.
• Retired individuals: To employ retired individuals who are legally allowed to receive both a pension and a salary.
• Other legal cases: In situations explicitly stipulated by the law or for the completion of particular types of work, projects, or programs.

An employer and employee cannot sign more than 3 consecutive fixed-term contracts. Also, fixed-term contracts and any extensions cannot exceed a period of 36 months. After this period, the agreement is considered a permanent contract.

In accordance with the Romanian Labour Code, all types of individual employment contracts must be documented in writing, in the Romanian language, or in dual-language, and require the mutual consent of both employer and employee. Prior to the commencement of the employment relationship, it is the employer’s responsibility to conclude the individual employment contract and register it with the employees’ electronic program (ReviSal).

Working hours in Romania

The standard workweek in Romania consists of up to 8 hours per day, 40 hours per week. However, a full-time employee may be required to perform overtime, and can amount to a maximum of 8 hours per week. Overtime is compensated with paid time off within the next 90 calendar days after it’s performed. If compensation through paid time off is not possible within the 90 calendar days, the additional work will be paid to the employee the following month, which can be no less than 75% of the basic salary.

Holidays in Romania

Romania celebrates the following public holidays for which employees are given the day off:

• New Year’s Day and the day after
• Epiphany (starting in 2024)
• Saint John the Baptist Day (starting in 2024)
• Day of the Union of the Romanian Principalities
• Easter and Easter Monday
• Labor Day
• Children’s Day
• Pentecost and Whit Monday
• Dormition of the Mother of God
• Saint Andrew’s Day
• National Day of Romania
• Christmas Day and the day after

Vacation days in Romania

The minimum duration of annual leave is 20 working days. However, the employment contract, or applicable collective bargaining agreement (CBA) may provide for a greater amount of annual leave.

According to the provisions of the Labor Code, in case of special family events, such as a funeral, employees have the right to additional paid days off. The law does not impose a number of additional leave days, so this number can be established by the employer through the company’s internal regulations or through the applicable collective labor agreement.

Romania sick leave

Prospective employees must provide a medical certificate confirming their ability to work in order to be hired. If an employee is absent due to non-work-related medical reasons, they are entitled to sick leave, which can last up to 183 days per year. However, if it goes beyond 90 days, a social insurance doctor’s approval is needed. In some cases, it can be extended for another 90 days through a specific process.

Employees are usually required to give their employer a medical certificate no later than the 5th day of the subsequent month of their leave. In practice, employees should also inform their employer within 24 hours of obtaining the certificate, with exceptions for emergencies, quarantine, or isolation.

During sick leave, employees generally receive 75% of their average income over the last 6 months within 12 months of contributing to the social health insurance system. There is a cap on this allowance, equivalent to the gross minimum base salary for 12 months at the national level. Employers pay the allowance for the first 5 days of sick leave, and afterward, it’s covered by the public insurance scheme. During sick leave, the employment agreement is put on hold, and the employee cannot be dismissed.

Employees injured in work accidents also have sick leave entitlements. They typically receive 80% of their average gross salary over the 6 months before the injury. Employers pay for the first 3 days, and the rest is covered by the public insurance scheme. This sick pay can last up to 183 days per year, with the possibility of extension under certain conditions.

Parental leave in Romania

Pregnant employees are entitled to at least 126 days of maternity leave, which can be taken before or after childbirth. A minimum of 42 days must be taken after childbirth. During maternity leave, workers receive 85% of their average income over the past 6 months, capped at a national maximum.

Employers must protect pregnant, recently postpartum, or breastfeeding employees from health and safety risks. If the workplace can’t be adjusted or the employee can’t be relocated, they are entitled to maternal risk leave of up to 120 days per year. During this leave, employees receive an allowance from the state budget.

Non-birthing employees can take 10 working days of paternal leave in the first 8 weeks after a child’s birth, with normal salary rights. If they complete a special childcare course, they get an additional 5 days of paid paternal leave.

Health insurance in Romania

Romania offers universal free healthcare, but services often need to be paid for upfront and then reimbursed. Employees may opt to purchase private health insurance.

Romania supplementary benefits

Supplemental benefits, such as meal vouchers, gym memberships etc., are not required by law, but such provisions will enhance your talent retention efforts.

Bonuses

A 13th-month bonus in Romania is considered a gratuity and is not required by local law. Most employers offer performance-based bonuses.

Termination/severance in Romania

Employers can set a probationary period in a permanent employment contract of up to 90 calendar days for non-management positions or 120 calendar days for management positions. Probationary periods for fixed-term contracts may be negotiated, provided they do not exceed:

• 5 working days for a contract lasting less than 3 months
• 15 working days for a contract lasting 3-6 months
• 30 working days for a contract lasting longer than 6 months for workers in non-management positions
• 45 working days for a contract lasting longer than 6 months for workers in management positions

During the probationary period, the employment contract can generally be terminated by either party with simple written notice, without any notice period.

An employer is legally allowed to terminate an employee’s contract in the following circumstances:

• Disciplinary reasons: When the employee has engaged in severe or repeated misconduct, violating either the company’s disciplinary rules, the terms of their individual employment contract, the applicable collective labor agreement, or internal company regulations.
• Custody or house arrest: If the employee is in custody or under house arrest for a period exceeding 30 days.
• Physical or mental unfitness: If the competent medical authorities confirm that the employee is physically or mentally unfit to perform their job.
• Poor performance: Termination may occur due to consistently inadequate job performance.
• Redundancy: If the employer needs to reduce the workforce due to business needs such as downsizing or restructuring.

There is generally a strict procedure to be followed when dismissing an employee. In addition to the required procedure, employers must provide a minimum notice period of 20 working days when termination is due to redundancy (layoffs), poor job performance, or when the employee is physically or mentally unfit for work.

If there are longer notice periods specified in a collective bargaining agreement, then employers must abide by those.

Paying taxes in Romania

Contributions on salaries are cumulated at 47.25%. Employers contribute 2.25% to work insurance. Employees contribute 25% of their salary to the state social security fund, 10% to health insurance, and 10% tax on income from wages.

Why G-P?

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