Romania Employee Benefits
Happy and satisfied employees make your businessthrive and lead to even better profits. However, the specific benefits for employees in Romania might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labor contracts for employees in Iceland including local benefits.
When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few.
What are the Employee Benefits in Romania?
Benefits and entitlements in Romania are generally covered by the Labor Code. Foreign companies hiring employees must comply with legislation which provides safeguards and guarantees for the workforce, while also detailing the responsibilities of employers. Improved terms can be applied by collective agreements at industry or company level as well as by contracts. However, absolute minimums apply to such as:
- Paid vacations
- Working hours
- Termination, severance, and notice periods
- Sick leave
- Maternity allowances and benefits
The responsibilities of foreign companies reach further than simply complying with tax, social security, and payroll regulations. Failure to comply with specific regulations applying to benefits and entitlements runs the risk of fines and sanctions. It is vital that employers have a firm grasp of what is guaranteed for their employees, as this will affect the employer-employee relationship.
What Compensation Laws exist in Romania?
Romania’s Labor Code covers most aspects of employment regulations relating to compensation and entitlements. The Romanian Constitution also protects individuals against such as harassment or discrimination at work, gender equality and equal rights in terms of pay. European Union Directives, such as the General Data Protection Regulation (GDPR), can also apply. Disputes are dealt with by regional tribunals or appeal courts.
In addition to the Labor Code, the following are also likely to apply:
- The Labor Union Law
- The Fiscal Code
- The Companies Law
In Romania it is vital for employers to be up to speed with responsibilities to their staff over benefits, compensation, and minimum requirements. Do not take the risk of paying penalties or facing sanctions for ignoring these responsibilities.
Minimum compensation and entitlements cover such as maternity and paternity leave, sick leave, termination, severance, overtime, paid vacations, notice periods and probation.
- Maternity, Paternity, Parental Leave: Maternity leave of 126 days includes a mandatory 42 days post-natal, but generally 63 days are taken equally before and after the birth. Benefit is 85% of average salary over the previous six months for the 126 days. Fathers receive a minimum five days paid paternity leave within eight weeks of the birth at 100% salary. Parental leave is for two years from the birth if the employee has contributed to social insurance and had taxable income for the previous 12 months. Benefit is 85% of average salary over the previous 12 months
- Sick Leave: Entitlement is up to 183 days a year but can be extended and is up to 18 months specifically in the case of tuberculosis. Employees receive from their employer 75% of their average salary over the previous six months. Compensation can be 100% if the individual needs surgery or has a contagious disease
- Minimum Wages: In January 2022 the minimum for full-time employees was increased to RON 2,250 per month (€515, US$566), equating to RON 30,600 (€6,184, US$6,795) a year. Employees in the construction sector stayed at a monthly minimum of RON 3,000 (€606, US$666), the same as before January 2022
- Probation Periods: Only one trial period is permitted per employment, and they are generally for 90 days. They can be shorter for fixed-term or temporary employees, while managers or executives can have up to 120 days
- Working Hours and Breaks: The Labor Code restricts hours to eight per day and 40 each week, with a weekly limit of 48 including overtime. ‘Averaging agreements’ between employers and employees’ representatives can allow for 48 hours a week over four months, and in some cases averaged up to 12 months. Breaks, generally unpaid, are stipulated in contracts or collective agreements
- Overtime: Compensation is usually as paid days off, taken within 60 days of working the extra hours, unless impractical in which case employees receive no less than 75% above their normal hourly wage. Employees must give written agreement to work overtime
- Notice Periods: The statutory minimum is 20 days, although contracts and collective agreements can allow for more
- Termination, Severance, Redundancies: Termination must strictly comply with mandatory procedures and is prohibited on discriminatory grounds, for taking the right to strike, and during pregnancy, temporary illness or while on vacation. Termination regulations apply equally to all employees regardless of seniority. No statutory minimum levels apply to severance, which usually depends on contracts or collective agreements.
Multiple redundancies involve strict consultation procedures if the following apply: 10 redundancies out of between 21 and 99 employees; 10% of employees in company employing between 100 and 299 staff; 30 employees in companies employing more than 300
- Paid Vacations: The Labor Code stipulates 20 days of paid vacation per year, adjusted pro rata for having worked less. Unused vacation should be used in the first six months of the following year