Romania

Table of Contents

Romania PEO & Employer of Record

WeHG affords an International PEO and global Employer of Record service in Romania to companies willing to enter the Romanian market or hire local/expat employees in this country.

The traditional approach requires establishing a subsidiary in Romania.  Although our solution allows you to start the operations in Romania within days, therefore, save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

Romania fast facts

Population, million: 19
Land area: 238,397 km²
Capital: Bucharest
Local currency: Romanian leu (RON)

GDP per capita:$ 12,813
GDP in currency:$ 248,624 billions

Romania is a state in South-Eastern Europe. Partially located in the northeastern part of the Balkan Peninsula. In the southeast, it is washed by the Black Sea. The country shares borders with Ukraine in the north, Moldova in the east, Hungary in the north-west, Serbia in the west, and Bulgaria in the south.

Federal labor and employment law applies to:

  • banking;
  • interprovincial and international transportation;
  • broadcasting;
  • telecommunications;
  • aeronautics; and
  • a few other limited areas.

Hiring, Negotiating and Doing Business in Romania 

Necessity of written employment contract

It’s claimed by the Romanian Labor Law to sign the employment contract only in writing and it has to be translated to the Romanian language (if you’re a foreigner). The contract should consist of minimum provisions, provided by the Law: 

  • A place of employment, 
  • Position/job description, 
  • Possible risks of the job, 
  • Holidays, 
  • Information about the salary and additional bonuses, 
  • Working hours and shifts description,  
  • Professional duties of the position,  
  • Parties description (identity information), 
  • Information about the company/employer (headquarters or domicile),
  • Important dates (when the contract becomes binding; type of contract: fixed-term or indefinite; trial period)

Additionally, the contract may also consist of non-competition, mobility, confidentiality, and so on.

Different forms of engagement: employment, contracting, work with private entrepreneur

There are such categories of workers legislated by the Romanian Law: 

  • Employees (the main type of co-work is subordination for receiving the salary). 
  • Self-employed persons (independent professional activity and specific qualification). 
  • Independent contractors (employed temporarily) 

To distinguish the categories these differences should be observed:

  • Independence degree
  • Contractual split between the parties
  • Liability of produced work
  • Place of the work and positions description

Romania Employment Contract

Types of employment agreements

The Romanian Law distinguishes two types of employment contracts:

  • Fix-term contract
  • Indefinite contract

As a measure of employee protection, in Romania, the employment contract can be concluded for an unlimited duration. In the case of a temporary or fix-term contract for a project-basis work, the maximum duration should be not more than 36 months and the maximum number of fix-term contracts – 3 continuous ones.

Romania Working Hours

Standard Working Hours

Under the Romanian Labor Code:

  • Shift Duration: 8 hours per day.
  • Working Week Duration: 40 hours per week.
  • Working Week with Overtime: Up to 48 hours per week.

For specific work activities, as stipulated through individual or collective negotiations, the working shift can extend to 12 hours. In such cases, a mandatory rest period of 24 consecutive hours is required after the shift.

Special Provisions for Young Workers

For students and workers under 18 years old:

  • Maximum Shift Duration: 6 hours per day.
  • Weekly Work Hours: Limited to 30 hours per week, with no overtime allowed.

Night Shifts

Night shifts cannot exceed 8 hours within a 24-hour period. Certain groups are restricted from working night shifts, including:

  • Workers under 18 years.
  • Pregnant women from 5 months of pregnancy onward.
  • Nursing mothers and those who have recently given birth.

Overtime

Employers must compensate overtime work with a minimum 75% increase in the regular hourly wage. Alternatively, employees may receive compensatory time off, as agreed upon in the individual or collective labor contract.


Vacation Leave in Romania

Employees in Romania are entitled to a minimum of 20 paid vacation days per year, according to the Labor Code. During the vacation period, employees receive their regular salary and may be eligible for additional holiday bonuses, as outlined in their contract or collective agreements.


Romania Maternity Leave

Female employees are entitled to 126 days of maternity leave if they have worked for at least one month in the preceding 12 months. This leave can be divided into:

  • 63 days before birth.
  • 63 days after birth.

During this period, women receive an allowance equal to 85% of their average gross salary over the last six months, fully covered by the National Social Security Fund.

Additional protections for pregnant employees and new mothers include:

  • Paid time off for prenatal medical checkups.
  • Up to 120 days of maternity risk leave, if medically recommended.
  • Nursing breaks during working hours.

Romanian Severance Laws

Notice Periods

Notice periods are mandatory for resignation and dismissal:

  • Resignation:
    • 20 working days for non-management positions.
    • 45 working days for management positions.
    • Immediate resignation is allowed if the employer fails to meet contract obligations.
  • Dismissal:
    • Generally requires 20 working days’ notice unless specified otherwise by a collective labor contract.

Severance Pay

Romanian labor law does not mandate severance payments for private-sector employees unless stipulated by individual or collective agreements.


Payroll and Taxes in Romania

Income Tax

Romania uses a flat income tax rate of 10%, applied to taxable income (gross salary minus applicable deductions).

Social Contributions

Mandatory contributions include:

  • Employee Contributions:
    • Social Security Contribution (CAS): 25% of gross salary.
    • Health Insurance Contribution (CASS): 10% of gross salary.
  • Employer Contributions:
    • Work Insurance Contribution: 2.25% of gross salary.

Payroll Management

Employers are responsible for withholding and submitting taxes and social contributions to Romanian tax authorities. Accurate payroll processing ensures compliance with local labor laws and tax regulations.


Health Insurance Benefits in Romania

Employees are entitled to sick leave paid as follows:

  • First 5 Days: Paid by the employer.
  • Subsequent Days: Paid by the National Social Security Fund (processed by the employer).

Additional Employee Benefits in Romania

Adoption and Parental Leave

  • Biological and adoptive parents are entitled to childcare leave of 1-2 years (or up to 3 years for a child with a disability).
  • The allowance during childcare leave is 85% of the parent’s average salary over the 12 months preceding the leave.
  • Fathers are entitled to 5 days of paternity leave, which can extend to 15 days if they complete childcare training.

General Market Benefits

Romania offers favorable conditions for businesses, including:

  • Low costs of labor and land.
  • Strategic EU membership and access to EU funds.
  • A 10% flat tax rate for individual income.

Public Holidays in Romania

Romania recognizes 15 public holidays annually, including:

  • New Year’s Day (January 1-2).
  • Easter (Orthodox calendar).
  • Labor Day (May 1).
  • Christmas (December 25-26).
    Additional holidays may vary depending on the employer or collective agreements.

Why Choose WeHireGlobally

Navigating payroll, labor laws, and tax regulations in Romania can be complex, especially for international companies. WeHireGlobally provides expert Employer of Record (EOR) and payroll management services, ensuring compliance and efficient workforce administration.

What We Offer:

  • Hassle-free onboarding of Romanian employees.
  • Management of payroll, taxes, and benefits.
  • Local compliance with Romanian labor laws.
  • Cost-effective solutions for hiring in Romania.

Partner with WeHireGlobally to simplify your expansion into Romania while minimizing cost and risk.

 

Frequently Asked Questions (FAQs) About Employment in Romania

1. What are the standard working hours in Romania?

In Romania, employees typically work 8 hours per day and 40 hours per week. Overtime is allowed but must not exceed 48 hours per week, including regular hours.

2. How is overtime compensated in Romania?

Overtime must be compensated with a minimum 75% increase in the regular hourly wage. Alternatively, compensatory time off may be provided, as agreed upon in the employment contract or collective agreement.

3. How much vacation leave are employees entitled to in Romania?

Employees are entitled to a minimum of 20 paid vacation days annually, though some companies offer additional days based on seniority or internal policies.

4. What is the income tax rate in Romania?

Romania applies a flat income tax rate of 10%, which is withheld from the employee’s gross salary by the employer.

5. What social contributions must employers and employees pay?

  • Employees:
    • Social Security Contribution (CAS): 25%.
    • Health Insurance Contribution (CASS): 10%.
  • Employers:
    • Work Insurance Contribution: 2.25%.

6. Are severance payments mandatory in Romania?

Severance payments are not mandatory under Romanian labor law unless specified in individual or collective labor agreements.

7. What maternity leave benefits are available in Romania?

Maternity leave is 126 days (63 days before and 63 days after childbirth). Employees receive an allowance equal to 85% of their average gross salary, paid by the National Social Security Fund.

8. Can fathers take paternity leave in Romania?

Yes, fathers are entitled to 5 working days of paternity leave, which can be extended to 15 days if they complete childcare training.

9. How are sick leaves paid in Romania?

  • The first 5 days of sick leave are paid by the employer.
  • Any additional days are paid by the National Social Security Fund, though the employer processes the payment.

10. Can employees work night shifts in Romania?

Yes, employees can work night shifts, but these cannot exceed 8 hours within a 24-hour period. Pregnant women, nursing mothers, workers under 18, and those recently giving birth are prohibited from working night shifts.

11. What notice periods are required for resignation or dismissal?

  • Resignation: 20 working days for non-management roles, 45 working days for management roles.
  • Dismissal: Typically requires 20 working days’ notice unless otherwise specified in collective labor agreements.

12. Is it mandatory to offer employees additional benefits in Romania?

Beyond statutory benefits like vacation leave, sick leave, and parental leave, companies often provide additional perks such as meal vouchers, private health insurance, or professional development opportunities to remain competitive in the labor market.

13. What are the public holidays in Romania?

Romania observes 15 public holidays annually, such as New Year’s Day, Easter (Orthodox calendar), Labor Day, and Christmas.

14. How can I simplify hiring and payroll in Romania?

Partnering with an Employer of Record (EOR) like WeHireGlobally ensures compliant hiring, payroll management, and administration, allowing your business to focus on operations while we handle the complexities.

Hannah Kohl
Author:
Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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