Looking for an Employer of Record in Romania? Here’s what you need to know

Romania’s labor laws apply to any organization hiring in the country. Many companies typically work with an Employer of Record (EOR) to hire and manage international teams, but using an EOR in Romania may not be an applicable option.

A Temporary Work Agency, like Payoneer Workforce Management, offers a streamlined approach for businesses to seamlessly build, manage, and pay global teams in Romania. 

Speak to the team today or keep reading to learn what’s required to hire and pay employees in Romania.

How to hire employees in Romania

Organizations have three best practice options for hiring remote workers in Romania.

1. Set up a local entity: A local entity is a formally registered legal presence, like a subsidiary or branch, that enables you to hire and pay employees in Romania directly, but it comes at a cost. This route requires administrative effort, time, and financial investment, and may not appeal to businesses that want to scale fast.

2. Hire independent contractors or freelancers: If your work is short-term or project-based, you can deploy flexible hires like contractors or freelancers and minimize administrative effort. This route isn’t viable for permanent staff, however, and misclassifying an employee as a contractor or freelancer can lead to serious legal issues and penalties.

3. Hire employees through a Temporary Work Agency: This is an agile way to hire employees in Romania without a local entity. This route is typically simpler than registering a legal presence in Romania.

It may not be possible to use an Employer of Record in Romania, but Payoneer Workforce Management can offer assistance as a Temporary Work Agency in Romania.

How to onboard employees in Romania

A productive work relationship starts with a good onboarding process. Your Temporary Work Agency may help deliver a swift, seamless, and satisfying onboarding process. This typically involves:

• Payroll and benefits setup: Local employees should be properly registered for payroll and enrolled in all required benefits, in accordance with regional standards.
• Equipment delivery and setup: Ensure the new hire receives the appropriate devices and technical configuration needed to perform their work smoothly from day one.
• Onboarding orientation: Arrange an introductory session during the first week to walk the new employee through company policies, onboarding procedures, and the expectations of their role.
• Team and stakeholder introductions: Allocate time for the local hire to meet their immediate team members and key colleagues across the broader organization.

With localized support in 160+ countries and territories, we make it easier for your business to onboard, pay, and manage employees and contractors, while meeting local compliance requirements.

Pay employees in Romania

Local labor law dictates that companies must pay employees in Romania using Romanian Leu (RON). In Romania, payroll runs monthly, and employees are paid on the last working day of the month.

Minimum wage in Romania is RON 4,050 per month. Annual or 13th-month bonuses are not required by law, but performance bonuses are common practice and generally awarded around the Christmas period.

Employees typically pay income tax at a flat rate of 10%, although there are some exceptions to this rule. Employers must contribute towards mandatory public health insurance and social security (including pensions).

Companies usually use an EOR, in Romania however, a temporary work agency can help.

Payoneer Workforce Management’s unified all-in-one platform gives you a single dashboard to manage the entire global workforce. Onboard talent quickly and securely with localized contracts and payroll.

Employment laws in Romania

In Romania, full-time work is typically 40 hours per week, and the maximum legal working hours must not exceed 48 hours per week, including overtime. This overtime work should be compensated with either paid time off within the next 90 days or an additional payment that cannot be less than 75% of the base salary for the time worked.

Part-time work includes 2, 4, and 6-hour shifts per day for 5 days per week, or 10, 20, or 30 hours per week. 

As per Romanian law, probation periods must not exceed 90 days for executive-level positions or 120 days for management positions.

Minimum wage in Romania

Employers must pay employees a minimum wage in Romania. The legal minimum wage is RON 4,050. 

The government may typically make changes to the minimum wage in Romania based on economical situations. 

Organizations may check government websites or partner with a Temporary Work Agency to understand the legal pay requirements.

Employment contracts in Romania

EU law typically asks that a written contract or equivalent written statement outlining the terms of employment is provided to employees on or before the day they start work.

The following should be confirmed in writing as close to the start date as possible:

• Names of the employer and the employee
• Place of work 
• Job title and role, plus a brief description of tasks
• Start date
• Contract duration
• Salary and remuneration
• Work schedule

The following information may also have to be confirmed in writing, before the employee begins engaging with responsibilities:

• Details of any training provided
• Vacation leave allowance
• Collective agreements governing work conditions
• Social security agreement

Employees can be hired under several categories in Romania, including permanent employees, trainee workers, seasonal workers, highly qualified workers, and more. The employment category must be stated in all necessary work permits and other authorization documents. 

Check government websites or discuss your specific needs with a Temporary Work Agency like Payoneer Workforce Management. We’ll help you onboard talent quickly and securely with localized payroll services.

Leave policy in Romania

Romania sets minimum levels of leave that employers must give their employees, including vacation time, public holidays, sick leave, and more.

Leave type	Mandatory quota
Public holidays	17 public holidays
Vacation leave	20 business days minimum, with unused leave carried forward for 18 months
Maternity leave	126 days minimum
Paternity leave	5 working days, plus an additional 10 working days for childcare courses (15 working days total)
Childcare leave	2 years from the birth of the child and 3 years in the case of disability
Sick leave	183 days within 1 year, with a possible extension of 90 days
Bereavement leave	3 days

Work permit in Romania

For information regarding work visas and permits in Romania, employers may check government websites and seek expert advice before offering non-native, non-EU, and non-EEA citizens a role that’s based in Romania.

Background check in Romania

Background checks are a common hiring practice in many countries. 

This check, performed before an employee is hired, can look at employment history, references, education, social media presence, and criminal record. Organizations must disclose what they’ll be checking and may get consent from any potential hire before running the check.

Employment termination in Romania

In Romania, certain scenarios are deemed valid grounds to terminate an employment contract.

These include:

• Employee resignation
• Mutual agreement between the employee and the employer
• Termination during probation
• Termination by the employer due to misconduct, performance issues, absence without leave, etc

Each scenario has its own procedural requirements and, in some cases, notice periods or additional steps must be observed.

Termination outside of the above scenarios may be deemed unfair dismissal, leading to legal issues for the employer. Termination is a complicated process and must be handled delicately on a case-by-case basis.

Notice period and severance pay

The notice period for fair dismissal within a probation period is 20 working days. 

After probation, employers must provide a minimum of 20 working days’ notice to terminate a contract. This cannot be modified.

If it’s the employee who is giving notice (i.e., in the case of resignation), 45 working days’ notice should be provided. While this is mandated by law (53/2003 of the Labor Code), the 45-day minimum can be modified if both parties agree. In practice, many notice periods end up being 20 days.

Notice periods should be clearly stated and agreed upon in the employment contract. The maximum notice period employers can ask from employees is 20 days for executive-level positions and 45 days for management.

Severance pay is not a legal requirement in Romania.

Company registration in Romania

If you plan to hire a large team in Romania, establishing a local entity could make sense. Company registration gives you full operational control and more of a presence in the country. The application process requires numerous forms and declarations, listed on the Ministry of Justice website. 

However, using a Temporary Work Agency like Payoneer Workforce Management is a streamlined way to onboard and engage talent, particularly for companies looking to hire fast and stay agile. Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Global PEO in Romania

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of an EOR, in Romania however, companies can use a Temporary Work Agency like Payoneer Workforce Management. Our platform helps manage HR and admin processes for companies without a local entity. This can be invaluable for international companies seeking Romanian talent.

Payoneer Workforce Management services in Romania

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

With our unified platform, you can get support with:

• Onboarding and offboarding local talent
• Payroll and taxes
• Guidance with navigating local labor laws
• Employment contracts, timesheets and more

Book a demo today.

FAQs

1) Are EORs legal in Romania?

Typically, it may not be legal to use an Employer of Record in Romania. However, a Temporary Work Agency like Payoneer Workforce Management offers a streamlined approach to onboarding local talent. We assist you in mitigating compliance risks and help you set up localized benefits as per local laws and requirements.

Expand in 160+ countries, including Romania, without setting up a local entity.

2) How much does it cost to hire Romanian talent?

Employer costs are roughly 4.25% of an employee’s annual salary (up to USD 60,000). The total cost can vary depending on the employee’s salary and other local factors. Try our cost calculator tool to get an estimate for your needs.

3) Why hire Romanian talent through a Temporary Work Agency?

A Temporary Work Agency like Payoneer Workforce Management allows you to onboard and pay employees across the globe in 70+ currencies, without setting up a local entity. Get in touch for details.