Looking for an employer of record in Moldova? Here’s what you need to know

The Republic of Moldova presents a compelling opportunity as businesses look to expand into Eastern Europe increasingly. The country not only offers a skilled and multilingual workforce, but it is also a strategically positioned gateway between the EU and CIS markets. 

Typically, companies may consider using a Moldova employer of record; however, it may not be permitted as per local regulations. So, companies can use a workforce management platform.

Navigating the Republic of Moldova’s tax obligations, local labor legislation, and employment compliance can be overwhelming for foreign companies. Seeking assistance from platforms like Payoneer Workforce Management simplifies these processes. 

Right from legally employing workers on behalf of businesses to supporting payroll, employment contracts, and local compliance under Moldovan law, Payoneer Workforce Management helps streamline the process while you can focus on accelerating market entry. 

Learn how Payoneer Workforce Management can help, and what employment in Moldova involves. 

How to hire employees in the Republic of Moldova

There are three ways to engage talent in the Republic of Moldova. They are as follows:

1. Setting up a legal entity in the country
   • Setting up a legal entity in Moldova facilitates direct hiring in the country. 
   • The business has to register with the Public Services Agency (PSA). 
   • Post-registration, the PSA records the new entity in the State Register of Legal Entities. 
   • Once done, the company has to register for taxes with the State Tax Service, open a bank account, and obtain all necessary licenses. 

For more information, you can refer to the government sources.

However, the process of setting up a legal entity is time-consuming and involves heavy expenses as well. However, the business organization has direct control over the operations. 

2. Hiring independent contractors
   • Employers can hire independent contractors or freelancers in the Republic of Moldova for specific projects with a limited timeline. 
   • Independent contractors have to register as sole proprietors at the Public Services Agency to remain compliant in the country. 
   • Contractors also have to register with the State Tax Service of the Republic of Moldova for tax identification. 

However, if the contractors do not meet the legal definition of an employee, businesses may be subject to misclassification penalties.

3. Workforce management platforms
   • If you want to engage and manage talent in the Republic of Moldova, you can try using the workforce management platforms, such as Payoneer Workforce Management. 
   • This platform not only helps you onboard and pay employees in the Republic of Moldova, but it also offers support for employment contracts, payroll management, benefits, tax and regulation compliance, and more. 

How to onboard employees in the Republic of Moldova

Onboarding employees in Moldova involves compliance with local labor laws, registering with local authorities, and handling tax obligations. The key official procedures are typically managed through the National Employment Agency (ANOFM) and the Bureau of Migration and Asylum. 

Here are some official onboarding requirements and documents:

• A written employment contract in the local language (Romanian)
• Registration of the employee with the necessary state authorities
• National Identification Number (CNP), a valid passport or identification card, bank account details, and residence permit (for foreign nationals). 
• There should be a proper device setup and technical support so that the employee can work efficiently. 
• The new employee will have an orientation session to familiarize themselves with the onboarding process, understand the company policies, and learn the new responsibilities. 
• There are introduction sessions with the new team members and seniors. 

A workforce management platform helps you understand the onboarding process in the Republic of Moldova, payroll management, social security contributions, employment contracts, and compliance with local labor laws and regulations. 

Pay employees in the Republic of Moldova

Employers must pay employees in the Republic of Moldova on the last working day of the month. The payment is done in Moldovan Leu (MDL).

The minimum wage in the Republic of Moldova is set at 5,500 MDL. 

Income tax, public health insurance and social security 

For a compliant payroll in the Republic of Moldova, employers have to manage income tax, public health insurance and social security obligations. 

Income tax

Individual income tax is at a flat rate of 12%. The employer cost is 24% of the employee’s gross salary. 

Public health insurance

• It is mandatory in Moldova to contribute to the Public Health Insurance Fund.
• The contribution rate is 9% of the gross salary. It is typically split equally between the employee and the employer (4.5% each). 
• The contribution to public health insurance offers access to a wide range of medical services in the country. This includes specialist care, general practitioner consultation, hospitalization, emergency services, and prescribed medications. 

Social security contributions

• 24% mandatory contributions to social security. Out of this, 18% is by employers and 6% is by employees. 
• The social security contributions fund the State Social Insurance Budget, which provides the following benefits:

• Temporary incapacity benefits
• Pensions 
• Unemployment benefits
• Family and child benefits
• Workplace accident and occupational disease insurance
• Death grant, and more

Payoneer Workforce Management is a unified, all-in-one platform, offering a single dashboard to manage the global workforce. 

For a detailed employment cost breakdown, you can use our employee cost calculator.

Employment laws in the Republic of Moldova

The Labor Code of the Republic of Moldova (No. 154/2003) primarily governs the employment laws in the country. This covers working hours, leaves, contracts, and termination rules and regulations. 

Working hours in the Republic of Moldova

Full-time contract employees in the Republic of Moldova work 40 hours weekly, which is 8 hours a day for 5 days a week. 

Overtime

Employees are entitled to overtime hours in the country. The overtime hours are limited to 120 hours per year. However, this is extendable to 240 hours with employee consent. 

The rate of overtime is as follows:

• 150% of the salary for the first 2 hours after regular hours on working days
• 200% of the salary on national holidays and weekends

Probation period 

Probation periods vary depending on the employment contract period.

• Indefinite contracts – The employment contract must mention a standard probation period. If not, there is no probation period for the employee. 
• Usual durations

• Definite-term contracts

Minimum wage in the Republic of Moldova

The minimum wage in the Republic of Moldova is 5,500 MDL. 

The wages are subject to increase. Employers should regularly check the official government website for updates. 

Employment contracts in the Republic of Moldova

There are different kinds of employment contracts in the Republic of Moldova. 

They are as follows:

• Name of the employer/employee
• Contract type and date of commencement of contract 
• Job title and responsibilities
• Probationary period
• Salary
• Bonuses 
• Working hours and overtime
• Leave entitlements 
• Benefits
• Termination with notice period and severance pay
• Tax/Social Security

Leave policy in the Republic of Moldova

In the Republic of Moldova, employees are entitled to various kinds of leave, including annual leave, sick leave, public holidays, maternity and paternity leave, and many more. 

Annual/earned leave

Employees are entitled to a minimum of 28 calendar days of paid annual leave, excluding public holidays. The leaves can be taken in parts. However, one part must be at least 14 days. 

Sick leave

An employee is entitled to 210 days of sick leave in the Republic of Moldova. 

For the first 15 days of the leave, the employer pays at a rate of 75% of the average.

From day 15 to day 210, the state social insurance pays at a rate of 80% of the average. 

Public holidays

There are 11 public holidays in the Republic of Moldova. They are as follows:

• New Year’s Day
• Orthodox Christmas
• International Women’s Day
• Orthodox Easter and Easter Monday
• Commemoration Day
• Labor Day
• Victory Day
• International Children’s Day
• Independence Day
• National Language Day (Limba Noastra)
• Christmas Day

Maternity leave

A female employee in the country is entitled to 126 days of paid maternity leave (70 days pre-natal and 56 days post-natal). The payment for the period is made at 100% of the regular wage by the National Social Insurance House (CNAS). 

Paternity leave

Fathers are entitled to 15 calendar days of paid paternity leave in the Republic of Moldova. The leave must be taken in the first year after the birth of the child. The payment for the leave is made from the state social insurance budget. 

Childcare leave

After the end of the maternity and paternity leave, either of the parents can take parental leave. The state social insurance pays the leaves as per the duration.

Compassionate leave

Employees in the Republic of Moldova are entitled to compassionate leave on various grounds. 

• 3 days of compassionate leave in case of the death of an immediate family member (child, parent, spouse, in-laws, etc.)
• 1 day in the death case of a relative who is not an immediate family member

Wedding leave

Employees are entitled to 3 days of wedding leave in the country. 

Work permit in the Republic of Moldova

A work permit is an essential document authorizing non-Moldovan nationals to work in the Republic of Moldova. Work permits are typically required for non-EU/non-Swiss/non-EEA citizens. 

The National Agency of Employment of the Ministry of Economy grants the work permit. To obtain a work permit, the employee has to submit a permit application form and provide all other relevant documents along with a color photograph with the right dimensions. 

For accurate information, employees and employers must check the official government resources to comply with local regulations and understand specific details. 

Background check in the Republic of Moldova

Some employers in the Republic of Moldova carry out background checks before hiring an employee. Criminal background checks in the country can be obtained officially through the Public Services Portal. 

Employers must consult local regulations before performing background checks in Moldova.

Employment termination in the Republic of Moldova

When an employee is under an indefinite individual employment contract, it can be terminated under the following clauses:

• In conditions beyond the control of the parties (Labor Code art. 82, 305, and 310) or by a written agreement of the parties (art. 82-1)
• At the initiative of one of the parties (art. 85 and 86)

The fixed-term employment contract terminates on the expiration date of the contract. However, on expiration, if neither of the parties has requested its termination and the employment relationship continues, the contract is expected to be extended for an indefinite period. 

Notice period

The notice period in the Republic of Moldova depends on the type of termination:

• There is no notice period if the employee is in the probation period.
• If the termination is on mutual agreement, the notice period can be negotiated.
• If the termination is on redundancy, the employee has to serve a 2-month notice period. 

Severance pay

Similar to the notice period, if the termination is on mutual agreement, the severance pay is negotiated. However, if it is due to redundancy, 1 month’s salary is to be paid as severance. If the employee doesn’t find a job in 3 months, the employer has to cover the unemployment for the 2nd and 3rd months. 

Company registration in the Republic of Moldova

Businesses can register a company in the Republic of Moldova for permanent presence or to penetrate the local markets in the country.  The business has to register with the Public Services Agency (PSA). Post-registration, the PSA records the new entity in the State Register of Legal Entities.  Once done, the company has to register for taxes with the State Tax Service, open a bank account, and obtain all necessary licenses. 

Workforce management platforms such as Payoneer Workforce Management enable engagement of talent in over 160 countries without having to set up a legal entity in the country. 

PEO in the Republic of Moldova

A Professional Employer Organization (PEO) in the Republic of Moldova supports payroll functions and HR works. However, this requires having a legal entity in the country. 

However, workforce management platforms like Payoneer Workforce Management act as a legal employer for the local team in the Republic of Moldova. As there is no need for a legal entity, it offers a better choice for companies that are new to the Moldovan market. 

Explore Payoneer Workforce Management’s services in the Republic of Moldova

Payoneer Workforce Management helps companies engage talent in the Republic of Moldova, along with supporting employment contracts, payroll management, onboarding procedures, taxation, benefits administration and more. 

Know more about Payoneer Workforce Management. Book a demo now!

FAQs

1. What are the standard working hours under Moldovan Labor Law?

The standard working hours under Moldovan Labor Law are 40 hours per week. An employee works for 8 hours daily, for a 5-day work week. 

2. What are some of the mandatory leave benefits for employees in the Republic of Moldova?

Some mandatory leave benefits for employees in the Republic of Moldova include annual paid leave, sick leave, public holidays, maternity and paternity leave, compassionate leave, wedding leave, and more. 

3. Is there a leave carry-forward policy in the Republic of Moldova?

Yes, employees in the Republic of Moldova can carry over all the unused days to the following year. In case an employee ends the employment contract, the unused days will be paid out. It is mandatory to pay for the unused vacation days. 

4. Are employees eligible for overtime hours in the Republic of Moldova?

Yes, overtime hours in the country are limited to 120 hours/year. This is extendable to 240 hours with the employee’s consent. The compensation is 150% of the salary for the first 2 hours after regular hours on working days. For weekends and national holidays, the compensation is 200% of the salary. 

5. What is the language used for employment contracts in the Republic of Moldova, and what is the currency used?

The official state language in the Republic of Moldova is Romanian (Moldovan). The employment contract must be written in this language. The official currency of the country is the Moldovan Leu (MDL).