Essential Guide to Hiring Employees in Romania

Romania, classified as a high-income economy by the World Bank, is a beautiful and picturesque European country. The country had a growing GDP of 248.09 billion USD in 2021, showing financial growth yearly. Another factor making Romania a top destination for international businesses is its workforce. With a population of 19.2 million, and a literacy rate of 98.9%, Romania has the best to offer for every kind of business and industry. 

Companies can hire from Romania and use a skilled and talented workforce. However, companies must follow local rules and labor codes while hiring. In this article, you will learn how to hire employees in Romania. 

Things To Know Before Hiring in Romania

Romania’s vast talent pool and can provide international businesses with the right workforce. However, to hire employees in Romania, it is critical to understand the laws and regulations of the land. These norms are discussed below:

Employment contracts: In Romania, drafting employment contracts in the Romanian language is mandatory. Depending on the requirement, contracts can be indefinite, fixed, part-time, or temporary. The contracts should include  the following details: 

1. Identification of employer and employee
2. Workplace
3. Date of commencement
4. Job description
5. Risks associated with the job
6. Criteria for assessing the hired employee
7. Working hours
8. Total holidays
9. Basic salary
10. Other monetary compensation
11. Pay date and frequency
12. Probation period
13. Reference in case of any collective agreements

Working hours

• Employees usually have a normal workday of 8 hours and 40 hours a week.
• Weekly rest periods should be at least 48 hours; Saturdays and Sundays are usually considered rest periods.

Overtime

• Any additional hour added to a typical workday of 8 hours is considered overtime. 
• Overtime in Romania is capped at 8 hours per week.
• Instead of overtime, employers are usually required to provide additional time off, granted within 60 days of the overtime. 
• If additional time off is not granted, overtime should be compensated at a rate of 175%.
• Furthermore, any work done on public holidays is considered overtime and should be compensated as payment or additional time off.

Minimum wage

• The minimum wage in Romania is set at RON 3,000 every month. 
• It varies based on seniority, education experience, skills, etc. 
• Furthermore, after 24 months of employment, the employer should raise the minimum wage for any employee.  

Sick leave and pay: 

• Sick leave can only be taken for a maximum of 183 days yearly. 
• Sick pay rates are either 75%, 85%, or 100%, based on the type of illness.
• The first five sick leaves are covered by an employer, following which the Romanian social security reimburses the employer. 

Taxes

Employers and employees are required to pay taxes in Romania in the following scheme: 

Social security

The social security scheme in Romania helps maintain several social welfare schemes like sick pay, health insurance, and pension. Both employers and employees contribute to social security in the following ways: 

Maternity leave

• Maternity leave lasts 126 days in Romania. 
• Out of these, 63 of which should be taken before and after the baby’s birth, respectively. 
• Taking at least 42 days of maternity leave after a child’s birth is mandatory.  
• In case of any risk to the mother’s or baby’s life, maternity leave can be extended under maternal risk leave. 
• The Romanian social security scheme pays 85% of an employee’s salary during maternity leave.
• In case of maternal risk leave, an employee is entitled to 75% of her usual salary.

Paternity leave

• Fathers are granted ten paid paternity leave days in Romania. 

Parental leave

• After the end of maternity leave, either one of the parents has the option to take parental leave till their child is two years old.
• In the case of a disabled child, parental leave can be taken till the child is three years old. 
• Parents receive 85% of their usual pay as a monthly allowance during parental leave.  

Annual leave

• Usually, 20 days of paid leave is allowed every calendar year. 
• However, 23 paid annual leave days exist for employees working under dangerous conditions.  

Public holidays

In total, there are 15 public holidays in Romania. 

Notice period

• It is mandatory to issue written dismissals to the employees for the record. 
• Employees who resign are required to serve a notice period of 20 days. 
• For individuals holding managerial positions who wish to resign, the notice period is 45 days.

The Cost of Hiring an Employee in Romania

Recruitment and selection in Romania may vary from one industry to the next. Companies looking to hire staff in Romania must handle these costs to conduct a smooth hiring process. The following are some of the major costs of hiring in Romania:

• Posting job advertisements
• Screening candidates (either through internal staff or through a third party)
• Hiring a legal aid
• Hiring a translator for daily operations
• Paying salaries
• Paying for additional compensation and benefits
• Taxes and social security contributions

What Does a Company Need to Hire Employees in Romania?

Companies can hire through an employer of record (EOR) or establish their physical presence to hire employees in Romania. They require the following documents while hiring employees in Romania:

• Articles of association
• Complete memorandum
• Certificate of good standing
• Minimum share capital amounting to 40 Euros
• Name of company’s shareholders and directors
• Registered offices
• Fiscal registration documents
• Operational Romanian bank account

Various Options For Hiring Employees in Romania

Companies can use one of the following two ways to conclude employee recruitment and selection in Romania:

• Establishing a subsidiary: This option is ideal for businesses willing to establish a physical presence in Romania. This will require a lot of paperwork and is certainly a time-consuming process. 
• Through an EOR: An employer of record (EOR) is the perfect choice for businesses that wish to streamline their hiring process without spending too much time or resources. In this option, an EOR will take on all the responsibilities of hiring employees in Romania, complying with the local laws. 

The Steps to Hiring in Romania

Recruitment and selection in Romania vary depending upon the company’s hiring process and policies. The steps to hiring in Romania are as follows: 

• Step 1: The first step is advertising vacant positions in newspapers or online job portals such as Ejobs, CarieraNoua, and BestJobs.
• Step 2: Once you receive a substantial number of job applications and CVs, you can go through each and shortlist the suitable candidates. 
• Step 3: The next step is to conduct interviews, which can be done through a phone call, video call, or in person. You can ask candidates questions about their skills, educational background, professional experience, etc. However, it is best to steer clear of too many personal questions or any kind of discriminatory question. 
• Step 4: The final step is to select the best candidates based on their interview performance and other qualities. Subsequently, you can move forward with onboarding and training the selected candidates.   

Let Multiplier Be Your EOR Platform in Romania

As one of the European Union’s leading countries, Romania is a hotspot for businesses to hire employees and start operating. However, it is mandatory for businesses hiring staff in Romania to do so under Romanian law and norms. Therefore, partnering with an EOR like Multiplier can help smoothen the process. At Multiplier, we aim to simplify the global process of hiring. Therefore, we help enterprises by hiring the best talent in Romania and providing a robust infrastructure to help manage all those employees. Furthermore, we provide SaaS-based solutions that help streamline the process of hiring employees in Romania even more. There is no requirement to establish a subsidiary, and you can focus more on testing new markets.