Employer of Record in India
An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Romania – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Romania worth checking out!
Romanian leu – RON
Salary is usually paid on a monthly basis, on the last day of the month.
The minimum gross salary per month for full time work is RON 2,550.00 (January 2022)
An Overview of Employing in Romania
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.
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).
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.
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
Holiday & Leave
The holiday entitlement starts on the hire date of the employee. The minimum holiday entitlement is 20 working days per year. It is common practice to provide with at least 21 working days. If the holiday is not taken within 18 months after accrual, the days are forfeited. The employee continues to receive the regular wages (inclusive of any bonus if applicable) while on leave.
Employees required to work on public holidays should be granted time off in lieu within 30 days, or financial compensation equal to no less than 100% of their basic salary.
The salary continues to be paid during sickness, under the condition of providing a medical certificate.
The payment is between 75%-100%, dependent on the illness for a maximum of 180 days/year.
The first 5 days are paid by the employer; any subsequent days are covered by the employer who will then be entitled to a refund from the state upon application. The reimbursement period is between 6 months and 3 years.
Employees are entitled to 126 days of medical leave for pregnancy (out of which at least 42 days are after birth). This is paid initially by the employer but reimbursed by the state, within 1 to 3 years. During maternity leave, the employee will be entitled to 85% of the gross salary and taxed, but exonerated of the 10% health contribution.
Mothers are entitled to request up to 2 years to stay at home with the child (paid by the State). The employee receives 85% of the net salary, capped at 8500 RON (as of June 2021). Upon returning to work, the employee is protected and cannot be dismissed within 6 months of returning to work.
The employee is entitled to 5 days-off paid by the employer within the first eight weeks of the child’s birth, or 10 days if the father proves that he attended a parenting course, which is officially recognized.
Romanian Labour Laws stipulate that one parent may take up to 2 years’ childcare leave following the birth of a child.
Additional Leave Entitlements
Employees are entitled to paid leave on the following occasions:
- Marriage of the employee – 5 days
- Birth of the child – 5 days
- Marriage of the employee’s child – 2 days
- Death of spouse, child, parents, parents in law – 3 days
- Death of grandparents, brother, sister – 1 day
- Blood donation – 1 day
- Leave for studies – maximum 10 days (if the employer has not offered training courses once in 2 years)
These days off are paid by the employer and should be provisioned in the internal regulation of the company.
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.