Romania - Employer of Records service

If you are embarking on expanding abroad where you have not incorporated a legal entity yet, you will need our in-country Employer of Record (EOR) services to be able to hire employees fast and in a compliant manner. We make hiring an easy, effective and highly cost efficient experience and take on the burden of all administration. 

Your candidates get hired by Coberon Chronos’ PEO legal entity in accordance with local Labor Laws and can be onboarded in days by signing an employment contract we can provide in Romanian. The employed is eligible and assigned to work with and on your company’s behalf exactly as if he or she were your employee in-country. We prepare the monthly salary, benefits and allowances payroll based any timesheet provided and we calculate all expense reimbursement costs too.

Employment At a Glance

Hiring in Romania

In Romania there is an ascending trend which confirms that the business sector is doing well and that there is a continuous need for labor force in this country. Even more gratifying is the fact that primarily there seems to be a need for young laborers, more than 86% of employers saying they are mainly interested in hiring “Juniors” (up to 3 years of experience) and specialists who have at least 3 years of employment. Moreover, 82% of respondents said they intend to integrate within their organizations people who have not yet finished their studies, either through internships or through various exchanges and/or trials.

 

Employment contract in Romania

In Romania, an employment contract is required by law. It must identify the employee and the employer, the job location and its registered address. It must also include a job description, details of any job-specific risks (if any) and the date of the start date, the actual commencement date of the contract. Additionally, the following should be specified:

  • the amount of annual leave to which an employee is entitled,
  • the base salary, any other elements included in the remuneration, the frequency of salary payments,
  • normal working hours (in hours/day and days/week)

Any collective employment contract regulates the employee’s working conditions too.

Individual employment contracts are registered with the Employees’ General Register at the Office of the Labor Inspectorate. An employer is obligated to the employee with a copy of their employment contract, which has been signed by both parties and registered with the Local Labor Inspectorate.

Fixed-term individual employment contracts may be drawn up for a period of up to 12 months. Such a contract may be extended for no longer than 18 months. If a fixed-term employment contract has been suspended, the fixed-term contract expires as soon as the causes of the suspension cease to exist. If there are any changes to an employment relationship, the employer must notify the employee in writing of these changes. In addition, the employer is obliged to notify the Local Labor Inspectorate within five days.

Probationary period

A probationaryl period can apply for an indefinite employment contract.

Trial periods cannot surpass:
  • 90 calendar days for administrative positions
  • 120 calendar days for executive positions.
Trial periods for short term contracts may be agreed upon so long as they do not surpass:
  • 5 work days for a contract less than 3 months;
  • 15 work days for a contract of 3-6 months;
  • 30 work days for a contract longer than 6 months;
  • 45 work days for a contract longer than 6 months for employees occupying a management position.

 

Health Services And Insurance in the Romania

Romania offers benefits of an universal healthcare system. The state finances the primary, secondary and tertiary healthcare. Public health campaigns are independently financed by the Government of Romania. The Ministry of Health of Romania is required to manage and supervise the public healthcare sector.

The access to healthcare is guaranteed by Article 34 in the Constitution of Romania, which specifies that the state is obliged "to guarantee the sheltering of healthcare".

Every citizen of Romania is entitled to cost-free, unrestricted medical procedures, as established by a physician. Citizens of the European Union have the right to a free emergency medical assistance based on their EU health card.

Pension Plans in the Romania
 
Employers' pension contributions amount to 20.5% of gross earnings (higher for workers in risky/dangerous occupations), employees' contribute 9.5% and the self-employed carry the full contribution rate themselves.
 
Contributions have to be paid for income up to five times the national monthly average, which was RON 1,077 (EUR 307) in/since 2006. Early retirement is possible from five years prior to normal retirement, provided that the employee's contribution record exceeds the required time period by 10 years or more. Pension benefits are indexed to inflation and adjusted quarterly if prices have increased by at least 5% on an annual basis.
 

Public Holidays and Vacation in Romania

In each calendar year, an employee is entitled to receive paid annual leave of at least 21 working days (in accordance with the Natural Collective Agreement 2003). Public holidays and statutory non-working days do not count towards the annual leave. For part-time employees, the annual paid leave must be granted proportionally to the time actually worked.

Employees working on jobs affect their health and handicapped employees are entitled to an extra 3 days of paid annual leave. Employees under 18 years of age are entitled to a minimum of 24 working days of annual paid leave, in accordance with the Natural Collective |Agreement for 2003. An enhanced entitlement to annual leave may also be provided for in any other applicable collective bargaining agreement, staff rules or employment contracts.

  • Jan 01, 2017 - New Year's Day
  • Jan 02, 2017 - New Year's Day Holiday
  • Jan 24, 2017 - Unification Day
  • Apr 17, 2017 - Orthodox Easter Monday
  • May 01, 2017 - Labor Day
  • Jun 05, 2017 - Orthodox Whit Monday
  • Jun 26, 2017 - Flag Day
  • Jul 29, 2017 - National Anthem Day
  • Aug 15, 2017 - The Assumption of Mary
  • Nov 30, 2017 - Saint Andrew's Day
  • Dec 01, 2017 - National Day
  • Dec 25, 2017 - Christmas Day
  • Dec 26, 2017 - Christmas Day Holiday
 
13th month salary in Romania
13th month salary is not mandatory in Romania.

 

Bonus payments in Romania
Salaries may be paid upon a monthly, daily or hourly basis, depending on the type of work performed by the employee. There is a mandatory minimum wage per month 320 EUR/1450 RON (it may increase year by year). Usually, IT and pharmaceutical firms grant the highest bonus payments.

 

Sick Leave in Romania

In the case of a temporary inability to work due to illness or injury, the employee must obtain a medical certificate to this effect, granting a number of days of medical leave. Please note that “ordinary” medical leave may not exceed 14 days. For extensions of a 14 day period, employees must obtain special certificates from specialised medical commissions.

During the period of sick leave (generally not longer than 6 months) the employee is entitled to receive sick pay on the basis of his average salary during the preceding 6 months, but not less than 75% of such amount (depending on the type of sickness). The sick pay is granted by the employer for a number of days (depending on the total number of employees) and afterwards by the public social health insurance budget.

Maternity/Shared Parental Leave in the Romania
People who have worked for 12 months before the date of birth of their child can benefit either from:
  • a leave of one year, as well as a monthly compensation equivalent to 75% of the average net income over the last 12 months. Compensation may not exceed 3,400 RON/month (about 800 EUR/month). People who have chosen this option also benefit from a bonus of 500 RON / month for 12 months when they return to work.
  • a leave of two years, as well as a monthly compensation equivalent to 75% of the average net income over the last 12 months. In this case the compensation cannot surpass 1,200 RON per month (about 305 EUR/month).

The second parent can either request one month of leave. Compensation and leave are suspended for the other parent for this month and the first parent will have the choice of taking an unpaid leave or coming back to work. Or this worker must inform the Labor Inspectorate that he or she will not opt for the one month leave a minimum of 60 days prior to the baby's first birthday. The leave of the first parent and the compensation is reduced by one month in this case.

 

Termination of the Employment Contract and Severance in Romania

An employer may dismiss an employee only on grounds specifically permitted by statute, which include gross or repeated misconduct, poor performance, medical incapacity and redundancy.

Employers must give employees statutory minimum notice where the dismissal is on grounds of redundancy, poor performance or medical incapacity, while employees must give notice of resignation in most circumstances. Employees are protected from dismissal on certain grounds (such as unlawful discrimination) and at various times, usually when the employee is on leave for particular reasons. Before dismissing an employee on grounds of misconduct, the employer must follow a statutory disciplinary procedure.

Before dismissing an employee on grounds of poor performance, the employer is required by law to follow an evaluation procedure. For a dismissal on redundancy grounds to be lawful, the employee's job must have been eliminated for reasons unrelated to the employee, based on a "real and serious" cause, and the elimination of the job must be genuine.

Before dismissing an employee on grounds of poor performance or medical incapacity, the employer must offer him or her any vacant position compatible with the employee's vocational training and work capacity.

An employee's employment contract is terminated automatically on the date that he or she reaches the standard retirement age and has the minimum contribution record required for a state retirement pension. Romanian employment law makes no provision for severance payments for employees working in the private sector (except for the minimum notice period that applies).

Severance payments are generally provided for in the applicable collective labour agreements.

Employment Taxes in Romania

In Romania the income tax is 16%, as provided by the Tax Code.

Social contribution rates and the amount of other taxes are set each year by the Romanian State Social Insurance Budget Law and the Romanian State Budget Law.

For social insurance contribution based on the working conditions:

  • 31.3% for normal working conditions, of which 10.5 % for individual contribution and 20.8% for the contribution payable by the employer;
  • 36.3 % for difficult working conditions, of which 10.5 % for individual contribution and 25.8 % for the contribution payable by the employer;
  • 41.3 % for special working conditions, of which 10.5 % for individual contribution and 30.8% for the contribution payable by the employer,

For health insurance the contribution is:

  • 5.5% for individual contribution;
  • 5.2% for the contribution payable by the employer;
  • 0.85 % for the contribution on holidays and health insurance benefits;

For the contribution to the unemployment insurance budget both parties are taxed as following:

  • 0.5 % for individual contribution;
  • 0.5 % for the contribution payable by the employer;
  • from 0.15 %  to 0.85 % for the contribution of insurance for work accidents and occupational diseases, differentiated by risk class, under the law, due by the employer;
  • 0.25 % for the contribution to the Guarantee Fund for salary payment, paid by the employer.

For employment income, a personal deduction is allowed to Romanian tax residents , depending upon level of the individual’s monthly gross income and the number of dependent persons.

Mandatory social security contributions are generally allowed for deduction for the purpose of calculating the Romanian income tax due.

Also, employees’ contribution to qualifying voluntary pension plans and employee’s private health insurance contributions/medical subscriptions are deductible for income tax purposes up to EUR 400 per year each contribution.

 

Why Coberon Chronos

Hiring a small or large number of employees in Romania can be time consuming, expensive and complex without the extensive knowledge of the local Labor Code but mostly to apply it to the best practices.

Coberon Chronos can help your business to hire your candidates, handle all the hiring administration and payroll and ensure that you’re in compliance with local labour laws, without the burden of setting up a large office or subsidiary abroad in a rush.
Our Global Employer of Record and PEO services lets you focus on running your key business in a new country.
If you have an immediate EOR needs or just wwant to discuss how CoberonChronos can provide a seamless temporary workforce or PEO solutions for hiring employees in Romania, please contact us at sales@coberonchronos.com.

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