Employment contracts in Romania are either indefinite or for a fixed term. Indefinite contracts are favored; fixed contracts are normally only allowed for project-based work or other work that is for a limited duration. A fixed-term contract may not exceed 36 months and may be renewed up to two times, but the employment agreement is automatically converted into an indefinite contract after a third renewal or after 36 months.

Employment contracts must be in writing and in the Romanian language. They must be signed before the employment relationship begins, and the employer must register the agreement with the General Register of the government labor inspectorate using its electronic system (known as REVISAL) before employment starts. The contract must state:

• the identification details of the employer and the employee, and the employer's headquarters location,

• the employee's work location or their ability to work in different places if there is no fixed workplace,

• how travel and insurance costs will be handled if the employee will travel or work in more than one location,

• the employee’s job function under the official Classification of Occupations in Romania (Clasificarea Ocupatiilor din Romania) and a job description,

• how the employer will evaluate the employee’s performance,

• any risks of the job,

• the date work will begin and the length of employment if the contract is a fixed-term or temporary contract,

• the amount of annual leave,

• the employee’s base salary, the pay period and the form of payment,

• any other compensation separate from the base salary,

• working hours, expressed either in hours per day or hours per week,

• the conditions for overtime and its compensation,

• the notice periods and other rules for terminating the contract,

• rules regarding the use of electronic signatures,

• information about any collective bargaining agreements that apply to the employment,

• the employee’s rights employer-provided training, and

• the employer's contributions to the employee’s medical insurance, pension, and any other benefits.

The minimum statutory gross wage is 3,300 RON.

According to Romania law, the work week is limited to no more than five eight-hour days and a maximum of 48 hours per week. Part-time workers must work a minimum of ten hours per week, two hours per day. For employees under 18, work is limited to six hours a day or 30 hours a week.

Employers must keep a record of the daily work hours performed by each employee, highlighting the start and end hours of the working program, and shall present such records to the labor inspection control when required.

Overtime

Employees are allowed to work a maximum of 48 hours per week including overtime. After working a 12-hour day, employers must give a 24-hour rest period. Work performed outside the standard eight hours per day, 40 hours per week must be compensated with paid hours off during the 60 calendar days after the overtime has been performed. If the compensation with paid time off is not possible, the overtime shall be paid to the employee by adding a benefit that must not be lower than 75% of the basic wage, pro-rated to the overtime performed.

Workers under 18 years of age, part-time employees, and pregnant employees who are unable to work normal working hours for health reasons are not permitted to work overtime.

Common Benefits

Meal vouchers- one per worked day for a maximum amount of RON 15.18 per voucher. The monthly number of meal vouchers granted cannot exceed the number of working days. The meal vouchers are subject only to income tax.

Gifts – includes gift vouchers and holiday gifts. These are non-taxable if the value for each individual person does not exceed 150 RON.

Cultural vouchers – amounts that do not exceed 150 RON per month, or 300 RON if they are offered on occasion. These vouchers are subject only to income tax.

Holiday vouchers– can be granted by the employer only if in the previous year the fiscal results indicate profit at a maximum amount of six minimum gross wages guaranteed in payment. The holiday vouchers are subject only to income tax if granted according to the law.

Transportation to and from work- non-taxable benefit in kind (it is not subject to taxation in Romania).

Private Health granted by the employer- non-taxable benefit in kind in the limit of 400 EUR per year. The amount exceeding this cap is subject to income tax and social charges.

Private Pension granted by the employer- non-taxable benefit in kind in the limit of 400 EUR per year. The amount exceeding this cap is subject to income tax and social charges.

Developmental courses – also includes training offered by the employer related to the work performed by the employee. This is not a taxable benefit as per local law provisions.

Phone and Internet allowance – between 100 to 200 RON per month

Under the labor code, employees covered by the pension and social insurance system who have made required contributions are entitled to sick leave of up to 180 days within one year with a possible 90-day extension.

The first five calendar days are provided by the employer for working days only. From the 6th calendar day, the FUNASS (Unique National Fund of Health Insurances) fund supports the payment of sick leave.

Sick pay is equivalent to 75% to 100% of the average monthly income during the previous six months, depending on the category of illness. The employee is required to provide a medical certificate from the doctor.

Maternity Leave

A pregnant employee is entitled to 126 days of paid maternity leave.

Maternity leave consists of two periods, prenatal leave, which is the period where a woman must take a minimum of 63 days before the expected due date, and postnatal leave, where the employee must take the remaining 63 days after the birth of the child.

The actual days across the two periods are stipulated by the employee’s physician and reported in the official medical certificate of maternity.

The maternity payment is paid by the FUNASS (Unique National Fund of Health Insurances) at a rate of 85% of the calculation based on the average of the employee’s monthly gross wages during the six months before the maternity leave started.

In addition, employees are entitled to take leave to protect their own and their child’s health and safety. The maternal risk-benefit is completely supported with funds from the Unique National Fund of Health Insurances. The amount of benefit is 75% of the average gross earnings over the last six months.

Maternal risk leave is complementary to maternity leave. In these cases, the employee is required to write a request to the employer and provide a medical certificate from the doctor for the child’s sickness.

Paternity Leave

The father/partner, who effectively participates in a child’s care is entitled to 10 days of paid leave, irrespective if the child is born of marriage, out of wedlock, or adopted; this leave increases to 15 days if the employee participates in an infant care course. The possibility to benefit from paternity leave is during the first eight weeks after the birth of the child, based on the written request addressed to the employer. The employee is legally required to provide the birth certificate of the child.

The paternity leave allowance is paid from the employer’s salary fund and is included in the taxable income of the employee.

In the case of the death of the child’s mother during childbirth or during maternity leave, the child’s father is entitled to the following benefits, as the case may be:

a) an allowance equal to the maternity allowance due to the deceased mother if the father does not complete the insurance period to benefit from the right to medical leave.

b) a maternity-related allowance granted in accordance with the father’s income, for the case when he fulfills the insurance period to benefit from the right to medical leave.

This allowance is borne from the salary fund of the employer where the father works.

Parental Leave

After maternity leave, one of the parents is eligible for childcare leave of two month (parental leave) until the child reaches two years of age (three years of age in the case of disabled children), provided that the employee has contributed to tax during the past year of employment.

The employee is entitled to receive a monthly allowance from the appropriate Romanian authorities amounting to 85% of the average regular salary received in the last 12 months before childbirth. The employee is legally required to provide the written request from the employee, the birth certificate of the child, and a declaration that the other parent is not on maternity leave. Monthly allowance for children born from twin, triplets or multiples is supplemented by 50% starting with the second child.

Employees are entitled to up to 20 days of paid annual leave by law per year pro-rated with the worked period. Employers are required to pay employees their allowance at least five working days before the leave starts.

If the employee cannot take all or part of the annual leave entitlement within the calendar year, the employer must carry over the outstanding annual leave to the first six months of the following calendar year, however, if the employee is still unable to take the leave entitled (e.g. due to long-term sickness), the employer must grant the unused leave with the employee’s consent within 18 months, starting with the year following the one when vacation has been accrued.

Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, which must be approved between the employer and employee.

Employees are entitled to up to three days of paid bereavement leave in the case of the death of a direct family member. In these cases, the employee is required to provide the death certificate and a request from the employer.

Employees are entitled to five days of paid wedding leave and two days of paid leave in case of the wedding of an employee’s child. In this case, the employee is required to request the employer to go on leave and after the wedding, provide the wedding certificate.

Public holidays that fall on the weekend are usually lost.

Date Day Holiday

1 Jan 2024 - Monday - New Year’s Day

2 Jan 2024 - Tuesday - New Year Holiday

6 Jan 2024 - Saturday - Epiphany

7 Jan 2024 - Sunday - Synaxis of St. John the Baptist

24 Jan 2024 - Wednesday - Union of the Romanian Principalities

1 May 2024 - Wednesday - Labor Day

3 May 2024 - Friday - Orthodox Good Friday

6 May 2024 - Monday - Orthodox Easter Monday

1 Jun 2024 - Saturday - Children’s Day

24 Jun 2024 - Monday - Orthodox Whit Monday

15 Aug 2024 - Thursday - Assumption Day

30 Nov 2024 - Saturday - Feast of Saint Andres

1 Dec 2024 - Sunday - Great Union Day

25 Dec 2024 - Wednesday - Christmas Day

26 Dec 2024 - Thursday - 2nd Day of Christmas

Romania has universal healthcare. There are also private clinics and providers. Some employers provide private health insurance as an employee benefit.

The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination.

Individual employment contracts can be terminated by means of

• By law

• By mutual consent of the parties

• By either party of the employment contract within the terms and conditions provided by the law

Employers may terminate employment contracts by dismissal for reasons related to the employee e.g. poor performance (with a PIP in place), professional inadequacy as a disciplinary sanction) or for reasons not associated with the employee e.g. job cancellation.

It is common to terminate using a Mutual Termination Agreement (MTA).

Notice Period

Notice period in the case of an employee dismissal is a minimum of 20 working days for all jobs regardless of the employment contract.

Employees may also terminate their employment agreement by resignation with prior notice of a maximum of 20 business days for non-management positions and 45 business days for management positions.

Severance Pay

There is no statutory severance pay in Romania unless conditions have been set in a collective agreement.

Probation Period

The probationary period in Romania is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are 90 calendar days increasing to 120 calendar days for an employee in a managerial/supervisory position.

Employer Payroll Contributions

2.25% - Unemployment Insurance

4.00% - Social Security (pension) contribution

*Under special conditions

6.25% - Total Employment Cost

Employee Payroll Contributions

25.00% - Pension

10.00% - Health Insurance

35.0% - Total Employee Cost

Employee Income Tax

0% - 0-5000 RON monthly

10% - above 5,000 RON monthly

Payroll Cycle

In Romania, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last working day of the month.

13th Salary

There is no statutory requirement for a 13th salary payment in Romania

Authority Payment Paid To Due Date Method

Social insurance contribution (CAS) - Contributia pentru asigurari sociale (CAS) - 25th of the following month - Treasury

Social health insurance (CASS) - Contributia pentru asigurari sociale de sanatate (CASS) - 25th of the following month - Treasury

Unemployment Insurance (CAM) - Contributia asiguratorie pentru munca (CAM) - 25th of the following month - Treasury

Revenue Tax - Impozit pe veniturile din salarii sediu - 25th of the following month - Treasury

National Solidarity Fund - Contributia la bugetul Fondului National de solidaritate - 25th of the following month - Treasury

Wages Income tax - Impozit pe veniturile din salarii Punct de lucru - 25th of the following month - Treasury

EU citizens wishing to work in Romania should apply for a registration certificate from the Romanian Office for Immigration for a stay of more than 90 days. Non-EU citizens need to obtain a residency permit if the stay is longer than 90 days.

Foreign workers must obtain work authorization from the Romanian Office for Immigration via an application from the employer. Employers must prove that they are a legitimate business in Romania and that they have made every effort to recruit a Romanian national to fill the role.

They must also ensure that the proposed employee is suitably qualified, having had suitable education and training, for the role.

There are several types of work permits that may be applied for and subsequently completed and submitted to the General Inspectorate of Immigration by the employer:

Work permit for permanent workers: For foreign employees who have an indefinite or fixed-term employment contract.

Cross-border worker: A foreign employee who is from a country that borders Romania and has an indefinite or fixed-term employment contract.

Highly qualified worker: A foreign employee that has obtained a highly skilled job in Romania. The term of employment must be for at least one year.

Most work permits are valid for one year, however, permits for highly skilled workers are valid for two years.

The standard VAT rate is 19%.