Employing in Romania
An Overview of Employing in Romania
Social Security Systems
The Romanian Social Security System covers the following circumstances: maternity, retirement, sickness, invalidity, death and unemployment.
Everyone in Romania who pays social security contributions is entitled to public healthcare.
It is common for larger companies to offer private healthcare as part of the employment benefits package.
The employer’s cost consists of 2.25% applied to the gross salary towards work insurance (plus bonuses or additional benefits)
- Social (Pension) contribution 25% (applied on the gross salary)
- Health insurance contribution 10% (applied on the gross salary)
- Income tax 10% (applied on the gross amount minus the 2 above contributions)
In Romania, when men reach 65 and women reach 63 they are entitled to pension, provided that they have accumulated at least 15 years of service and are not currently employed.
Holiday & Leave
Contract of Employment
There is a requirement for a fully executed original contract prior to the start date, one copy is held by the employer and the other one by the employee. It is mandatory to provide a contract in Romanian language. At PEO Worldwide we provide with the contract in English and Romanian.
The law for using electronic signature in the labour contracts was issued in May 2021 requiring both parties to have an advanced electronic signature, provided by a recognized provider. At TopSource Worldwide, we continue to provide with original contracts (wet signed) in Romania. Before onboarding, the employee must undergo medical examination by a labor doctor.
The probationary period in Romania has a maximum of 90 calendar days (or 120 days for management positions).
For temporary contracts, the probationary period varies according to the length of the contract, between 5 and 30 days.
The standard working hours are 8 hours a day or maximum of 40 hours a week. Hours of work need to be recorded by law.
Overtime is permitted, but is limited to 48 hours per week. The average amount of overtime cannot exceed 48 hours per week over a period of 4 months.
Overtime is compensated by free time or by payment of at least 175%. (200% for official days off).
The employment can be terminated:
- Upon contractual end date, for fixed-term contracts.
- By resignation from the employee.
- Upon agreement between parties, on the date both parties agree.
Termination from the employer:
- Due to redundancy/position not being required in the company: it needs to be strongly documented and the position cannot be covered/replaced in future.
- Dismissal: If the employee is no longer suitable due to the below reasons:
– Low performance, sustained by the documentation of annual/periodical valuation of personnel
– Serious or repeated disciplinary offences
– Juridical issues (arrested)
– Medical reasons that impede the employee from performing the role duties
During probation period, each party can interrupt the contract under the condition of giving notice equivalent to one day to the other party.
After probationary period, the employer who wishes to terminate the employment needs to provide with 20 working days’ notice, or 45 working days for managing positions.
The standard notice period for resignations after probation period is 20 working days, or 45 working days for managing positions.
There is no severance pay provisioned by the law.
Keen to engage an EOR in Romania? At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey
To find out how we can help your business with our employment solutions, contact us today.
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