Hiring guide in Romania

What should I know about hiring in Romania?

Legal framework

Types of employment contracts

Typically, contracts in Romania are set for an indefinite duration, but the Labour Code allows fixed-term contracts under certain conditions. These conditions include temporary replacements for employees on leave, addressing fluctuations in business activity, seasonal work, and hiring individuals close to retirement age or retired and working part-time.

Fixed-term contracts can also be used for specific projects, programs, or employment-promotion initiatives aimed at the unemployed. When establishing fixed-term contracts, specific details must be included. The contracts must be in writing and clearly specify the duration of the agreement. The standard maximum duration for such contracts is 36 months.

Content of an employment contract

An employment contract’s basic terms and conditions include identifying both parties involved and specifying the designated workplace. The location of the employer’s main office is also stated, along with the job classification and description based on official national occupation classifications or similar systems. Performance evaluation criteria, job-specific risks, and the contract commencement date are outlined.

The duration is specified for fixed-term or temporary agency contracts. The contract includes details on entitlement to annual leave, termination notice period and conditions, and a breakdown of basic pay and additional compensation components, with information on the frequency and method of payment. Normal working hours per day and week are defined, including provisions for overtime and shift work, if applicable.

Download a free employment contract for Romania through Native Teams.

Oral, written or electronic employment contracts

According to the Romanian Labour Code, all employment contracts must be written in Romanian and mutually agreed upon by both the employer and the employee.

Probationary period

Indefinite-term employment contracts in Romania allow a maximum probationary period of 120 calendar days for managerial roles and 90 calendar days for other positions. For fixed-term contracts, the probationary period varies based on the contract duration: 5 working days for contracts under 3 months, 15 working days for contracts lasting 3 to 6 months, and 30 working days (or 45 for managerial roles) for contracts exceeding 6 months.

Working hours

According to the Labour Code, full-time employees in Romania are generally required to work 8 hours per day and 40 hours per week. However, if their employment contract, collective agreements, or internal rules allow it, employees can work a 40-hour week in fewer than five days.

Shifts over 12 hours must be followed by a mandatory 24-hour rest period. The total weekly working time, including overtime, should not exceed 48 hours on average over a reference period, with exceptions possible through collective agreements and with measures in place to protect employee health and safety.

Employees under 18 are restricted to working 6 hours per day and 30 hours per week. The minimum employment age is generally 16, though exceptions are made for 15-year-olds under specific conditions.

Breaks and night work

Every employee working at least 6 hours per day is entitled to a 30-minute break (pauza). This break is included in the daily working time, so it’s paid.

Employees are generally required to have a daily rest period of at least 12 consecutive hours. Plus, a minimum weekly rest period of 48 consecutive hours is usually granted, often on Saturday and Sunday.

Annual leave

All employees are entitled to at least 20 working days of paid annual leave, separate from public holidays and any additional days off specified in collective agreements. Employees in challenging, hazardous, or unhealthy roles, as well as individuals with disabilities and those under 18, are entitled to an additional 3 working days of annual leave.

Public holidays

In Romania, the national holidays, which are non-working days, include New Year’s Day, the 2nd of January, Epiphany, and St. John the Baptist’s Day, both public holidays starting in 2024. Other holidays are the Day of the Unification of Romanian Principalities, Labor Day, Good Friday, Easter Sunday, and Easter Monday. 

Additionally, Children’s Day, Pentecost, the Assumption of Mary, St. Andrew’s Day, National Day of Romania, Christmas Day, and the Second Day of Christmas are also observed as national holidays.

Salary

The statutory national minimum wage, set by the Government, applies to all employees and is updated annually. New employees may be paid the national minimum wage for up to 24 months, which, as of 2024, amounts to RON3,700.00 per month.

To calculate the salary and taxes in Romania, click here.

Sick leave

Employees who are medically certified as unable to work due to sickness or injury are entitled to sickness benefits, typically set at 75% of their average pay and capped at 12 times the National Minimum Wage. The maximum period these benefits can be claimed is generally 183 days per year.

Employers usually pay the benefit for the first 5 days of absence, after which the state social health insurance fund assumes responsibility. To qualify for sickness benefits, employees generally need to have been insured under the state scheme for at least 6 of the past 12 months.

In special cases, such as emergency surgery, contagious diseases, tuberculosis, or AIDS, employees receive sickness benefits at 100% of their average pay and are exempt from the six-month insurance requirement.

Parental and maternity leave

Working mothers are granted 126 calendar days. Out of this period, 42 calendar days, or six weeks, must be taken immediately after childbirth. Ideally, half of the leave should be used before childbirth and the other half afterwards, although there is flexibility as long as at least six weeks are taken postnatally.

Employees are not statutorily entitled to receive payment from their employer during maternity leave. However, if they have been insured under the state social health insurance scheme for at least six of the previous 12 months, they are eligible for a benefit set at 85% of their average pay, capped at 12 times the National Minimum Wage.

Upon completing maternity leave, employees have the right to return to the same or a similar job with identical working conditions. They are also entitled to any pay and condition enhancements that would have applied during their absence.

Methods of employment termination

Under Romanian law, employment contracts can be terminated automatically, by mutual agreement, or through notice from either party. Dismissals must be justified by valid and substantial reasons, which are classified into two categories: objective and economic grounds.

Employee termination can be due to the employee’s demise, retirement decision, prison sentence, expiration of a fixed-term employment contract, or other reasons.

Ordinary dismissal by employer

An employer may terminate an employee’s contract after any probationary period for reasons related to the employee’s conduct or performance or for reasons unrelated to the employee, such as redundancy.

For conduct-related terminations, grounds may include serious or repeated breaches of disciplinary rules specified in the employment contract, internal policies, or collective agreements, detention for over 30 days due to criminal charges, physical or mental incapacity preventing the employee from fulfilling job duties, or a lack of professional capability for the assigned role.

For the latter three reasons, the employer must provide written notification within 30 days, detailing the reasons, relevant facts, legal basis, contesting procedures, and court details.

An employer may terminate an employee’s contract due to position elimination for non-personal reasons. This can involve individual or collective redundancies, which require statutory notice periods.

Notice period and challenging the dismissal

Employers must notify employees in writing and under signature of their intention to terminate an individual employment contract. The notice period varies based on the circumstances of the termination.

For termination due to employer reasons, such as the liquidation of the business unit, cessation of the employer’s activity, or reduction in personnel, the employer must provide a notice period of at least 2 months. If the termination is due to the employee’s lack of suitability for the position or insufficient qualifications confirmed by an attestation commission, the required notice period is 1 month.

During the notice period, employees are entitled to at least 1 working day per week to seek alternative employment while still receiving their average salary to support their job search efforts.

Employers are not required to provide a notice period if the termination results from the employee’s breach of work obligations, such as gross misconduct or repeated violations.

Rights and obligations of unemployed individuals

Individuals must reside or legally live in Romania and be involuntarily unemployed in order to receive unemployment benefits. Their income must be nonexistent or fall below the authorised activities’ reference social indicator (RSI). They must be fit for work and fall within the age range of 16 to the statutory retirement age. Additionally, they must be available for recruitment, actively seeking employment, and registered at a territorial Employment Agency within their jurisdiction. 

Moreover, individuals registered at the territorial employment agency must have contributed to the unemployment insurance system for at least 12 of the 24 months preceding their application for benefits.

Unemployment benefits are calculated based on the RSI, the individual’s income from unemployment insurance, and their contribution period. As of January 1, 2023, the RSI value is RON 525.5. The monthly benefit amount depends on the contribution period and the type of unemployed person. 

For those insured under the unemployment insurance system for at least one year, the benefit is 100% of the RSI (RON 525.5). Graduates aged 16 or above who cannot find employment within 60 days of graduation receive 50% of the RSI (RON 262.75) for six months. Additional percentages, ranging from 3% to 10%, are added to the benefit for individuals with longer contribution periods. The duration of benefits ranges from six to 12 months, depending on the individual’s contribution period.

Severance pay

There’s no specific statutory framework mandating severance payments. Still, the Labour Code specifies that employees dismissed for reasons unrelated to their performance are entitled to assistance in finding new employment and may be eligible for compensation.

For dismissals due to operational reasons and dismissals by mutual agreement, the law permits the possibility of severance pay, depending on legal provisions or the terms outlined in applicable collective agreements. If such provisions are absent, there is no legal requirement for severance pay.

Prohibition of competition

Employers and employees can choose to include a non-competition clause in their employment contract either at the start of employment or during its term. The employer must provide the former employee with a monthly allowance during the restriction period.

For the clause to be valid, it must clearly state the prohibited activities, identify the entities the employee cannot work for, define the geographical scope of the restrictions, specify the minimum monthly allowance (at least 50% of the employee’s previous gross monthly wages), and set a reasonable duration, usually not exceeding two years post-termination.

Confidentiality clauses are also common, preventing the disclosure of certain privileged information obtained during employment. Both parties are liable for damages if they breach this clause, and the specifics of the confidential information should be outlined in the contract, internal policies, or relevant collective agreements.

In the event of a dispute, both the employer and employee must attempt to resolve the issue amicably and in good faith. They may include a conciliation clause in the employment contract, allowing disputes to be resolved through mediation by an impartial external consultant, such as an employment lawyer. If conciliation fails, either party can escalate the matter to court.

Remote working policy

Employees can request contract changes to accommodate remote work for health reasons, parental duties, or family care responsibilities. Employers can’t impose remote work as a disciplinary action.

During emergencies, teleworking arrangements can be implemented with the employee’s consent, allowing for work duties and location adjustments.

Health and safety at home

Employers have a range of occupational health and safety (OHS) responsibilities, including assessing and mitigating risks related to work equipment, chemical substances, and workplace layouts. They must designate competent personnel, provide first aid measures, and facilitate access to occupational health services as mandated by the law.

Furthermore, employers are responsible for disseminating information about OHS risks and preventive measures and providing necessary training to employees.

Intellectual property rights

The rights typically belong to the employer for inventions created as part of an inventive mission assigned by the employer. However, if the employer is a public research institution, the rights may belong to the employee according to contractual agreements. 

Inventions created outside of an assigned inventive mission initially belong to the employee. The employer can claim these rights within four months of being notified about the invention unless a longer period is specified in the employer’s internal regulations.

Employee data privacy

Employees must provide explicit consent for their data to be processed, ensuring that this consent is freely given, specific, informed, and unambiguous.

Under GDPR and Romanian law, employees have various rights, including the right to access their data, correct inaccuracies, erase data (right to be forgotten), restrict processing, and object to processing. They also have the right to data portability and can lodge complaints with the National Supervisory Authority for Personal Data Processing (ANSPDCP).

What are the advantages of hiring employees from Romania vs other countries?

One of the most significant benefits is cost efficiency. Romania provides a cost-effective labour market where salaries and operational costs are generally lower than in Western European countries and the United States.

Romania also has a well-developed IT sector and telecommunications infrastructure. The country is known for its advanced technological capabilities and fast internet speeds, making it an attractive destination for tech-based roles.

Finally, the Romanian government supports business growth through various initiatives, including tax incentives for IT professionals and subsidies for new businesses. As a member of the European Union, Romania offers the benefits of operating within the EU framework, including ease of trade and regulatory alignment.

Why use Native Teams for hiring in Romania?

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• No paperwork: We will handle all the necessary paperwork for you.
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• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.