COUNTRY

Romania

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Currency

lei (RON)

Located at the intersection of central, eastern, and Southeastern Europe, Romania has a population of 19 million. The official language is Romanian. Agriculture and industrial sectors have historically been the centerpiece of the Romanian economy; however, in recent years it has begun exploring ways to diversify its economic base.

Written Agreements

Employers are obliged to conclude individual employment contracts in writing. If the contract has not been concluded in written form, the presumption is that it has been concluded for an indefinite term, and the parties can give proof of contract provisions and work performed through any other elements of proof.

The contract must include information on working conditions, hours, wages, length of notice, trial period, etc.

Restrictive covenants, such as non-compete clauses, confidentiality clauses, mobility clauses, etc., are valid only if they are put in writing. Employers must provide the employee with a monthly compensation, which is negotiated but must be at least 25% of the employee's salary. The non-competition clause can extend up to 6 months post-termination for executive positions and management positions for up to 2 years if explicitly stated in the contract.

Oral Agreements

It is mandatory to conclude written employment contracts in Romania. There are no guidelines on oral contracts. If the contract has not been concluded in written form, the presumption is that it has been concluded for an indefinite term, and the parties can give proof of contract provisions and work performed through any other elements of proof.

Implied Agreements

It is mandatory to conclude written employment contracts in Romania. There are no guidelines on implied contracts.

The standard length of the working time is 8 hours per day and 40 hours per week. For employees who are not yet 18 years of age, the length of the working time is 6 hours per day and 30 hours per week. The maximum legal length of the working time must not exceed 48 hours per week, including overtime work. When work is done in shifts, the length of the working time can be extended to over 8 hours per day and over 48 hours per week, provided the average number of working hours, as calculated for a maximum period of 3 weeks, does not exceed 8 hours per day or 48 hours per week.

All employees have the right to paid annual leave. The minimum annual leave is 20 days. Employees working in dangerous or harmful conditions, or those who are disabled or blind are entitled to 3 additional days of annual leave. The actual length of annual leave is determined in the applicable collective agreement or individual employment contract. Annual leave is granted in proportion to the work performed in a year.

Annual leave must be taken in the year for which it was granted. Collective agreements can stipulate certain conditions under which the leave can be transferred to the following year. Employees who are unable to use their leave in full due to work are entitled to transfer unused leave to next year.

During their annual leave, employees receive an annual holiday allowance that cannot be lower than the total value of wages for that period. It must be paid at least 5 days before the beginning of the annual leave.

Employees are eligible to paid sick leave for a maximum of 183 days in a period of 12 months, starting from the first day of illness. Employer is responsible for paying benefits for the first 5 days. The Single National Health Insurance Fund pays sickness allowances after that. Benefits are paid at the rate of 75% of the normal wages of the employee.

Female employees who have worked for at least 1 month in the last 12 months are entitled to paid maternity leave of 126 days - 63 days before and 63 days after delivery. The minimum mandatory duration of maternity leave is 42 calendar days after delivery. Employees must submit a medical certificate to their employer for availing this leave.

Maternity allowance is paid by the Single National Health Insurance Fund of Romania at the rate of 85% of the employee's average wages, provided the employee has paid 6 months of contributions in the last 12 months.

Romania grants paid paternity leave of up to 5 days to employees insured with the state social security system. This leave must be taken within 8 weeks of childbirth, justified by the child's birth certificate. Paternity leave allowance is equal to the salary corresponding to that period. Employees who are under mandatory military service have the right to 7 days of paternity leave. If the father has obtained the certificate of graduation from the childcare course, the duration of paternity leave is increased by 10 working days. In case of a mother's death during childbirth or during maternity leave, the remaining leave is transferred to the father.

Minimum Wage

The national minimum wage corresponds to the normal work schedule of 8 hours per day and 40 hours per week. It is applicable to full-time, part-time, and temporary employees.

Beginning July 1, 2024, the monthly minimum wage increased to RON 3,700 (Romanian lei) or RON 22.024 per hour for a full work schedule of 168 hours per month.

Salary must be paid at least once a month. Salaries are established through individual and/or collective negotiations between the employer and employees or their representatives.

Overtime, Holiday & Vacation Pay

The maximum work time for an employee is 48 hours per week, including overtime. Overtime work is compensated with time off paid in the next 60 days after the work has been performed. If time-off is not feasible, then a supplementary wage must be paid according to collective labor, and must not be lower than 75% of their basic wages.

Employees who are required to work during public holidays must be granted time off in lieu during the next 30 days or a wage increase of at least 100% of their regular wages.

During their annual leave, employees receive an annual holiday allowance that cannot be lower than the total value of wages for that period. It must be paid at least 5 days before the beginning of the annual leave.

Notice Period

Employees who are dismissed for being medically or professionally unfit for the job or other business-related reasons have the right to a notice of at least 20 working days. In case of collective redundancies, a minimum notice of 30 days is required. No notice is required for terminating a contract during the trial period.

The notice for termination must be given in writing and must contain the reasons for dismissal, term of notice, criteria for establishing the priority sequence in case of collective dismissal, list of available positions in the company for hiring. If during notice period, the contract is suspended, the term of notice shall be suspended accordingly.

Severance Benefits

In Romania, severance pay is not mandatory in all cases but is required in situations of collective dismissals. The minimum amount and calculation method are not specified by law and depend on collective bargaining agreements or individual employment contracts.

Pension

Romania has a contribution-based social security scheme for its residents. This scheme covers retirement benefits. Private sector and public sector employees are compulsorily insured. The standard retirement age is 65 for both men and women (for women, it will increase in stages until it reaches 65 in 2035). The minimum contribution period is 15 years while the full contribution period is 35 years. Persons working in difficult conditions are eligible for retirement at a lower age.

Monthly pension amount depends on the number of years of contribution and national average wage. Employees and self-employed persons under the age of 35 years are also required to contribute to mandatory individual accounts. The amount of contributions in these accounts is paid as a lump sum at the time of retirement.

Only employees contribute to social security for retirement benefits, employers contribute for employees working in difficult and very difficult working conditions.

Dependents/Survivors Benefits

In Romania, the survivor's pension is granted to eligible children and the surviving spouse when the deceased was either a pensioner or met the conditions for obtaining a pension.

Children are entitled to a survivor's pension up to the age of 16 or until the age of 26 if they are enrolled in a form of education recognized by law until their studies are completed. Children with disabilities are also entitled to a pension if the disability occurred before the age of 16 or before the age of 26 while studying.

The surviving spouse is entitled to a lifetime survivor's pension at the standard retirement age if the marriage lasted at least 15 years. If the marriage lasted between 10 and 15 years, the pension amount is reduced by 0.5% per month or 6% per year for each year under 15 years of marriage.

The amount of the survivor's pension is established as a percentage of the average annual score achieved by the worker, depending on the number of entitled dependents, as follows:

  • 50% - for a single dependent
  • 75% - for 2 dependents
  • 100% - for 3 or more dependents

Invalidity Benefits

The mandatory social security insurance covers disability benefits for insured persons. The invalidity pension is available to those who have not reached the standard retirement age and who have lost all or at least half of their work capacity due to work accidents and occupational diseases, neoplasms, schizophrenia and AIDS, and common diseases and accidents unrelated to work. Contribution requirements vary depending on the insured's age when the disability began.

The amount of disability pension depends on the number of years of contribution and degree of disability. In case of disability due to work accidents or occupational diseases, employers must pay for medical treatment and rehabilitation. Employees are also entitled to disability pension.

Only employees contribute to social security for retirement benefits, and employers contribute for employees working in high-risk and very high-risk conditions.

  • Local Laws & Regulations

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