Romania – Employer of Record
Globalization Partners provides employer of record services for clients that want to hire employees and run payroll without first establishing a branch office or subsidiary in Romania. Your candidate is hired via Globalization Partners’ Romania PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our Global Employer of Record Platform™ and Global PEO service enables clients to run payroll in Romania while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Romania.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. Globalization Partners allows you to harness the talent of the brightest people in 150 countries around the world, quickly and painlessly.
Located in Southeastern Europe on the Black Sea, Romania is separated from Bulgaria by the storied Danube River. The country has a population of 20 million and its capital city of Bucharest is the 6th largest city in the EU.
When negotiating the terms of an employment contract and offer letter with an employee in Romania, it may be useful to keep the following standard benefits in Romania in mind:
Public Holidays in Romania
Romania celebrates 11 public holidays for which employees are given the day off, including:
- New Year’s Day
- Day After New Year’s Day
- Unification Day
- Labor Day
- Orthodox Easter Monday
- Orthodox Pentecost Monday
- Feast of the Dormition (St. Mary’s Day)
- Andrew’s Day
- National Day
- Christmas Day
- Second Day of Christmas
Bonus in Romania
The 13th month bonus in Romania is considered a gratuity and is not required by local law. Most employers offer performance based bonuses.
Working Hours in Romania
The standard work week in Romania consists of up to 8 hours per day, 40 hours per week. Working hours may not exceed 48 hours per week including overtime. Overtime is compensated by either additional time off within 30 days of the overtime work performed in lieu of pay, or at a rate of 75% pay above base salary.
Vacation in Romania
Employees in Romania are entitled to a minimum of 20 days off per year. Employees are also entitled to the following days off for personal reasons:
- Marriage: 5 days
- Marriage of an employee’s child: 2 days
- Death of a family member: days
Sick Leave in Romania
Employees are entitled to pay for up to 5 days of sick leave with a compensation of 75% of salary. The maximum duration of sick leave is 183 days or up to 18 months for serious illnesses. Compensation is provided by the state for sick leave exceeding 5 days.
Maternity/Paternity Leave in Romania
Pregnant employees are entitled to at least 126 days of maternity leave at 85% of their average salary during the previous 6 months; leave is paid by the National Social Security fund.
Fathers are entitled to 5 days off for paternity leave within the first 8 weeks of the birth. This can be extended to up to 15 days if they participate in childcare courses.
After the maternity leave has been taken, parents are entitled to up to two years of additional childcare leave at 85% of their average salary during the 12 months prior to taking the leave (this payment is capped at 6.8 times the reference social indicator.)
Parents caring for a disabled child up to 18 years of age or a chronically ill child up to 7 years of age are entitled to 45 days of paid leave for each disabled or ill child at 85% of the employee’s average salary during the previous 6 months (this payment is capped at 12 times the monthly minimum wage.)
Termination/Severance in Romania
The employer can set a probationary period in the employment contract of up to 30 days for operational positions or up to 90 days for managerial positions.
In the event of termination, employers must provide a notice period of at least 20 working days. This does not apply to the dismissal of a worker under a probationary period, a dismissal based on professional inadequacy, or a dismissal based on disciplinary grounds.
Employees must provide 20 days’ notice upon resignation or 45 days’ notice for managerial positions.
There is no legal obligation to make severance payments in Romania.
Taxes in Romania
Employers contribute 20.8% of the employee’s salary to the state social security fund, 5.2% to public health insurance, 0.85% for the medical leave and compensation fund, and 0.5% to the unemployment fund.
Employees contribute between 31.3% and 41.3% of their salary to the state social security fund, 5.5% to health insurance, 0.15%-0.85% for the medical leave and compensation fund, and 0.5% to the unemployment fund.
Health Insurance in Romania
Romania offers universal free healthcare, but often services need to be paid for up front and then reimbursed. Additionally, the quality of care in government facilities is not generally up to western standards, so employees may wish to purchase private health insurance.
Additional Benefits in Romania
Additional private health insurance coverage is typically not provided by employers.
Meal vouchers are a tax-free benefit commonly offered to employees in Romania.
Employment Contracts in Romania
The general rule in Romania is that employment contracts are executed for an indefinite duration. Individual employment contracts should be registered with the Employees’ General Register.
Fixed-term contracts are also allowed for a period of up to 12 months and can be extended for no more than 18 months.
It is legally required to put a strong, written employment contract in place in Romania, in the local language, which spells out the start date of employment; location of employment; and terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Romania should always state the salary and any compensation amounts in Romanian new leu rather than a foreign currency.
This information is provided as general accepted information and is not intended as advisory services.
Why Globalization Partners
Establishing a branch office or subsidiary in Romania to engage a small team is time consuming, expensive and complex. Romanian labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. Globalization Partners makes it painless and easy to expand into Romania. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Romania PEO and Global Employer of Record Platform provides you piece of mind so that you can focus on running your business.
If you would like to discuss how Globalization Partners can provide a seamless employee leasing or PEO solution for hiring employees in Romania, please contact us.