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Global employment briefing: Romania, January 2018

  • United Kingdom
  • Employment law

31-01-2018

Recent changes to Romanian employment relations are as follows:

Stricter regime with regard to identifying and sanctioning undeclared labor

Changes made to the Romanian Labor Code (Law 53/2003) form August 2017 clarify the definition of undeclared labor, which is now deemed to include:

  • hiring an individual without previously concluding an individual employment contract, in writing, the day before it starts;
  • hiring an individual without transmitting the employment report to the General Register of the Employees, no later than the day before it starts;
  • performance of work when an employee’s individual employment contract is suspended; and
  • performance of work outside the working hours set under the employee’s part-time individual employment contract.

The fines for offences regarding undeclared labor have been increased to RON 20,000 (approx. EUR 4,500). However, use of undeclared work is no longer a criminal offence (the former rules provided that having more than five workers without a registered contract amounts to criminal offence).

As well as a fine, the Labor Inspectorate may sanction the employer by suspending its activity. An employer may resume work only after payment of the fine and after providing proof that it has remedied the deficiencies that led to the suspension.

New rules for concluding employment contracts, changes to contracts and records of daily working hours

Also as of August 2017, the following new rules apply:

  • The employer must keep a copy of its employees’ individual employment contracts at the worksite where such employees perform their work.
  • Any changes to the individual employment agreement must be concluded prior to the relevant amendment taking effect (previously the rule was that the change had to be concluded within 20 days from the date of the amendment).

The employer must keep records reflecting the daily worked hours of each employee, highlighting the exact work schedule (i.e. the start and end of the work day). Such records may be subject to the labour inspectors’ control whenever so required.

Gross minimum wage increased to RON 1,900 (EUR ~408) per month

As of 1 January 2018, the minimum gross national guaranteed salary has been increased from RON 1,450 (EUR ~311) per month to RON 1,900 (EUR ~408) for an average of 166 hours for full-time work.

Changes to the salary taxation regime

Starting from 1 January 2018:

  • income tax is lowered from 16% to 10%;
  • employees bear the entire burden for social security contributions, which has now been set at a total of 35% of gross salary for normal working conditions. Prior to the change, the total social security contribution of 37% was split between the employee (16%) and the employer (21%).

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