Designing an Employee Contract in Romania

Designing an Employee Contract in Romania

When hiring employees in Romania, businesses must navigate a unique set of rules and requirements. Designing a compliant labor contract is crucial to ensure smooth operations and avoid potential disputes. The most critical consideration is adhering to the Romanian Labor Code (Law No. 53/2003), which outlines the specific conditions and obligations for both employers and employees.

This guide will walk you through the essential elements of drafting a labor contract, the required information to include, and how to avoid costly mistakes that could result in penalties or the automatic conversion of fixed-term contracts to indefinite contracts.

What are the Types of Employment Contracts in Romania?

  1. Individual Employment Contract (Permanent Contract)
  2. Fixed-Term Contract
  3. Part-Time Contract
  4. Temporary Agency Work Contract
  5. Internship Contract
  6. Apprenticeship Contract

Employers may also consider Employer of Record (EOR) services to facilitate compliant hiring in Romania without establishing a local entity.

What are the Key Conditions for an Employee Contract in Romania?

1. Written Contract Requirement
  • A written contract must be signed at least one day before the start date (Article 16, Labor Code).
  • Backdating is not possible.
  • Contracts must include key information on employment terms and conditions, as outlined in the Labor Code.
2. Medical Check Requirement
  • Employees must undergo a medical check before starting employment.
3. Types of Contracts and Probation Periods
  • Permanent (Indefinite) Contracts:
    • Executive position: Max. 90 days probation.
    • Management position: Max. 120 days probation.
    • Disabled employees: Max. 30 days probation.
  • Fixed-Term Contracts:
    • 0 to 3 months employment: Max. 5 workdays probation.
    • 3 to 6 months employment: Max. 15 workdays probation.
    • Above 6 months employment: Max. 30 workdays probation.
    • Management position: Max. 45 workdays probation.
4. Duration and Renewal of Contracts
  • Indefinite contracts are the standard form of employment in Romania.
  • Fixed-term contracts are only permissible in specific situations (e.g., for a project of quantifiable duration or to handle temporary increases in workload).
  • Fixed-term contracts can only be renewed up to three times within a 36-month period.
5. Notice and Termination Requirements
  • Notice must be given at least 5 days before the expiry of a fixed-term contract.
  • If notice is not given, the fixed-term contract will convert to an indefinite contract.
  • Termination by mutual agreement is recommended to avoid legal disputes.

What Information Must Be Included in a Labor Contract in Romania?

Required InformationDescription
Employer DetailsCompany name, address, and legal representative information.
Employee DetailsEmployee’s name, address, and ID number.
Contract DurationStart date and type (indefinite, fixed-term) of the contract.
Job DescriptionRole, responsibilities, and work location.
Work Hours & LeaveHours of work, vacation entitlements, and break times.
Salary DetailsSalary amount, payment frequency, and bonuses (if applicable).
Social InsuranceConfirmation of employer contributions to social insurance.
Health and SafetyProtection from occupational hazards and description of working conditions.

What Leave and Benefits Are Employees in Romania Entitled To?

1. Annual Leave
  • Minimum Leave: 20 workdays per year.
  • Leave can be carried over to the following year but must be used within 18 months.
  • Leave entitlement increases with tenure in some companies.
2. Public Holidays
  • Employees are entitled to 12-15 public holidays per year.
3. Other Leave Types
  • Paternity Leave: 10 to 15 days.
  • Maternity Leave: 126 days (63 days before birth, 63 days after birth), paid at 85% by social insurance.
  • Parental Leave: 2 years (3 years if the child is disabled).
  • Sick Leave: Minimum of 5 days, with entitlement to social security benefits after the 6th day.

What Are the Risks of Failing to Comply with Romanian Labor Contract Requirements?

1. Automatic Conversion to Indefinite Contract
  • If a fixed-term contract is renewed more than three times or if no termination notice is given, it will automatically convert to an indefinite contract.
2. Penalties for Non-Compliance
  • If a written contract is not signed before the start date, employers may face fines and penalties under the Labor Code.
3. Risk of Employee Claims
  • If the employer breaches the probation period, notice, or termination requirements, the employee may claim damages.

How Can Globaine EOR Services Help?

Globaine PEO offers end-to-end support for compliant hiring in Romania. Here’s how Globaine can support your business:

1. HR Compliance
  • Drafting and managing employment contracts to ensure compliance with Romanian regulations.
2. Payroll Management
  • Processing payroll, ensuring correct tax contributions, and managing social security payments.
3. Onboarding Support
  • Ensuring smooth onboarding processes, including medical checks and employment contracts.
4. Local Expertise
  • Our local HR specialists have extensive knowledge of Romanian labor laws and can provide expert guidance.

 

Frequently Asked Questions (FAQs)

There are six main types of contracts in Romania: permanent, fixed-term, part-time, temporary agency work, internship, and apprenticeship contracts.

Yes, but they must establish a local entity or use an Employer of Record (EOR) to comply with Romanian labor laws.

Probation periods vary depending on the position:

  • Executive roles: Max. 90 days.
  • Management roles: Max. 120 days.
  • Disabled employees: Max. 30 days.

If a fixed-term contract exceeds 36 months or is renewed more than three times, it automatically converts to an indefinite contract.

Globaine PEO offers end-to-end hiring solutions in Romania, from drafting employment contracts to payroll processing, tax compliance, and onboarding.

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