Employment Laws in Romania

Main Sources of Employment Law in Romania

The Romanian Labor Code serves as the primary source of employment law, encompassing rules about working hours, vacations, notice periods, and grounds for termination. The laws are also influenced by directives from the European Union, given Romania's membership in the bloc.

Moreover, Romania has specific laws addressing health and safety at work, trade union activities, social dialogue, and collective bargaining agreements. Employees' representatives are often involved in these discussions to ensure fair working conditions. Further legal guidance comes from court decisions and practices, often used to interpret and implement the existing laws or labour code.

Employment Contracts in Romania

Employment contracts, often referred to as employment agreements, are the cornerstone of any working relationship in Romania. As defined by the Labor Code, each employment relationship must commence with an individual employment contract. This contract, usually a part of broader employment agreements, is mandatory and forms the basis of the legal relationship between the employer and the employee.

Formal Requirements

The Labour Code emphasizes that employment agreements must be made in writing. The written form is not just a mere formality but a requirement with significant legal implications. Failing to adhere to these requirements can result in severe penalties, as we can see from the implications for misclassification of independent contractors.

Essential Terms of the Contract

Employment contracts (employment agreement) must specify certain mandatory aspects. These include:

• Job Description: Clear description of the role and responsibilities of the employee. This ties directly to the employee's position.
• Workplace: The physical location where the work is to be performed. For remote employees, this could be their home or any place they choose to work from.
• Salary Details: The amount of remuneration, or basic salary, and the date of payment.
• Working Hours: The regular working hours per day and per week, not exceeding 48 hours per week.
• Contract Start Date: The date from which the contract and employment relationship begins.

These details are essential and must be agreed upon by both parties before starting the work. They set clear expectations and provide legal safety for both the employee and employer. All the employees are entitled to understand these terms in their employment agreements. You can find a more detailed explanation of these in this sample letter of agreement between employer and employee.

Contract Types

Romanian law recognizes different types of contracts based on their duration:

• Indefinite term contracts: These contracts do not have a fixed expiration date and continue until either party chooses to terminate the contract. Termination can occur with prior notice and in accordance with the Labour code.
• Fixed-term contracts: These contracts are made for a specified duration and end when the agreed-upon maximum period is over.

Choosing the right type of contract is essential, as it significantly influences the management of legal risks and the termination process.

Minimum Employment Terms and Conditions

While employers and employees in Romania have the freedom to negotiate the minimum employment terms and conditions, they are still subject to the basic provisions and cannot be less than the stipulations of Romanian employment law. The Romanian Labour Code in Romania governs the working conditions and Collective Agreements required to establish an employment relationship in the country.

Minimum Wage

While the negotiation of the monthly wage or salary is determined by the negotiation agreement (individual employment contract)between the employer and employee, employers in Romania cannot pay anybody below the minimum wage or minimum gross salary. The minimum salary for tech roles or jobs that require the employee to have a higher education is approximately 573 USD.

Maximum Working Hours

According to the Labour Code, the standard work hours is 40 hours per week and 8 hours daily. In some cases, the work hours per week can be extended to 48 hours per week, of which the additional hours is calculated as overtime hours.

Overtime

Employees below 18 years of age are excluded from overtime work. In Romania, the overtime hours is paid by the paid-off hours during the next 60 days and cannot be less than 75 % of the employee's base salary.

Mandatory Leaves in Romania

Romanian labour law safeguards a variety of leave entitlements for employees. These leaves not only secure the same rights of the workers but also contribute to creating a work-life balance conducive to productivity and personal well-being. It's essential for employers, particularly those running remote teams, to familiarize themselves with these legal entitlements to ensure compliance and avoid potential disputes or penalties.

Annual Leave

Every employee in Romania is legally entitled to a minimum of 20 working days of annual leave. Employers must grant this leave in the calendar year it is due and cannot replace it with financial compensation unless the employment agreement is terminated before the employee has taken their full leave. This mandatory leave allows employees to recharge, contributing to increased productivity and job satisfaction. For more on this, you may refer to the details provided in this guide.

Maternity Leave

Maternity leave is another critical aspect of the Romanian employment agreement. The country is committed to supporting families by providing a total of 126 days of paid maternity leave, contributing to the well-being of the mother and the newborn. This is further supported by Romania's commitment to free healthcare, making it an attractive destination for working parents.

Paternity Leave

In addition to maternity leave, fathers are entitled to a period of 5 days of paid paternity leave after the birth of a child. If the father attended prenatal medical classes, this leave can be extended by an additional ten days under the employment agreement.

Medical Leave

Romanian employment laws also provide provisions for paid medical leave. The amount and duration of compensation during medical leave depend on the employee's position and medical condition and are subject to the approval of a medical expert. To ensure legal compliance when dealing with medical leaves, employees are entitled to present a medical certificate. Employers may consider referring to this article on common legal troubles.

Childcare Leave

In the event of a child falling ill, Romanian individual employment agreements allows for an employee to take paid time off to provide care. This right is extended until the child reaches the age of 7, or 18 for children with disabilities, in accordance to the applicable collective labour agreement.

Termination of Employment

Employment termination is a critical aspect of Romanian labor laws that every employer should be well versed with. The conditions of termination, including clauses for dismissed employees and employees dismissed, are defined and regulated by the Romanian Labor Code, and often outlined in an employment agreement.

There are several reasons why an employment relationship can come to an end in Romania. These include mutual agreement, dismissal for reasons related to the employee's person or for reasons not related to the employee, expiration of the employment contract's duration, resignation, retirement, or death. Certain situations may involve a temporary employee, which would have its unique conditions outlined in the employment agreement.

To help protect both parties during this transition, the employer may refer to the agreement letter. This agreement, often prepared with close reference to internal regulations and collective labour agreement, can provide guidance on essential procedures such as determining the minimum gross salary during the notice period.

Retirement or Death

In the unfortunate event of an employee's death, the employment contract is terminated immediately. In the case of retirement, the employee usually informs the employer about their decision in advance to facilitate a smooth transition.

Anti-discrimination Laws

The Governmental Ordinance (GO) no. 137/2000 governs the anti-discrimination legal provisions in Romania. The Labour Code also makes provisions that protects employees against discriminatory practices of any kind in the work place. Hence, it's imperative to avoid such HR compliance mistakes.

Ensure Compliance in Romania with Skuad

Staying compliant with Romania's employment laws not only enables your organization to avoid unnecessary fines and penalties but also ensures you build an efficient global remote team.

Skuad's Employer of Record platform enables organizations to compliantly hire and onboard independent contractors and employees in over 160 countries, including Romania. Skuad ensures your organization stays above legal challenges anywhere across the globe.

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FAQs

What is the employer tax in Romania?

The employer tax in Rominia is at a 10% flat rate. This tax includes the employee's salary, bonuses, and other benefits.

What are the normal working hours in Romania?

The standard working hours is typically Monday to Friday, from 9 am to 5 pm. Also, Romania operates a 40 hours per week and 8 hours per day work period.