Bordering the Black Sea and located in the Balkans, Romania is an intriguing country with a rich history. Romania is full of natural beauty, including the Carpathian Mountains, alpine forests, rivers, and glacial lakes.
The country is also home to Europe’s first electrified castle, Bran Castle, better known by many as Dracula’s Castle.
While it may not grab as many headlines as some other European Union (EU) countries, Romania is ranked 10th in the EU by total nominal GDP. It’s also home to a large pool of skilled STEM workers.
In this article, we’ll examine Romania in greater detail, including why it’s an appealing option for hiring remote workers and the labor laws and legal requirements businesses must adhere to.
Advantages of Hiring in Romania
Labor costs in Romania are cost-effective when compared to many other EU members. Romanians tend to be proficient in English and many are well-educated, making them an appealing option for companies looking to expand their global team.
Here’s a quick, high-level overview of Romania:
- Language: Romanian
- Currency: Romanian Leu (RON)
- Capital City: Bucharest
- Population: 19 Million
- Cost of Living Rank: 90th
Educated, Tech-savvy Workforce
Fewer than 26% of Romanians aged 30-34 possess a university degree, which is significantly below the EU average of 40.3% and the lowest in the EU. However, thanks to government-supported programs like Educated Romania, this is beginning to change.
Romanians are increasingly majoring in science, IT, engineering, mathematics, and programming. The result is a growing workforce of global talent who possess many of the technical skills employers seek.
The capital city of Bucharest is known as a hub for technology and business.
Home to a growing number of tech parks, research centers, and startups, it attracts skilled talent seeking remote work opportunities in software engineering, web development, and other IT roles.
Not to be outdone, Cluj-Napoca — sometimes referred to as the Silicon Valley of Romania — also can lay claim to a growing tech ecosystem, with universities graduating students skilled in data science, software engineering, and artificial intelligence.
Some typical remote jobs for Romanian workers include:
- Developer
- Software development
- Marketer
- Talent acquisition
- Customer support
Hiring Compliantly in Romania
Employment Contracts
In Romania, employment contracts are mandatory. Employers can offer open-ended (unlimited) or temporary, fixed-term contracts. Initial temporary contracts are limited to a maximum of 24 months. The contract can be extended one time but can’t exceed a total length of 36 months.
Each contract is required to include the terms and conditions of employment, including:
- Job description
- Salary
- Hours worked per week
- Paid time off
- Notice requirements
- Termination clauses
Working Hours & Pay
As of July 1, 2024, the minimum wage in Romania is RON 3,700 per month. Romania has a standard 40-hour work week. Employees may not work more than 48 hours a week, including overtime.
Overtime is typically compensated through paid hours off during the next 60 calendar days. Another option is paying employees at a rate of 175% of the employee’s average salary for any overtime hours worked.
Employees required to work on a public holiday must be compensated with additional time off or paid at double their regular pay rate. Employees who work a 12-hour day are entitled to a mandatory 24-hour rest period.
Taxes
Employers are required to pay taxes of between 6.25% and 10.25%. This includes a 2.25% contribution to unemployment insurance based on the employee’s total taxable monthly income and between 4-8% for Social Security, depending on the employee’s working conditions.
Probation Period
While not mandatory, there is an option to stipulate a trial probation period in the employment contract. This period starts at the beginning of the employment relationship, and both parties need to agree on the length.
For open-ended contracts the trial period can be, at most, 90 calendar days for standard positions and 120 for managerial positions.
For temporary contracts, the duration of the probationary period depends on the length of the contract:
- Up to 1 month: Maximum of 2 working days
- Between 1-3 months: Maximum of 5 working days
- Between 3-6 months: Maximum of 15 working days
- 6+ months: Maximum of 20 working days
- Managerial positions with contracts exceeding 6 months: Maximum of 30 working days
Termination Process & Severance Pay
The termination process is agreed upon in the initial employment contract, and termination can be initiated by the employer, employee, or by mutual consent. If the employer chooses to terminate the contract, the required notice amount varies by the employee’s seniority, and the employer must provide a valid reason.
Compliant reasons for dismissal include:
- Redundancy due to downsizing or restructuring
- Gross misconduct
- Underperformance
- Inability to perform the agreed-upon tasks
Employees must be informed of their termination in writing, and the statutory notice period is 20 business days. Should an employee choose to resign, they also must provide 20 business days of notice, which jumps up to 45 business days for management roles.
Pay instead of notice is not allowed, and there is no statutory requirement for severance pay in Romania.
Paid Leave Laws in Romania
Vacation and Holiday
Work-life balance is important in Romania, and employees are entitled to at least 20 working days of annual leave each year. Employees also have the right to take unpaid personal leave. Employers must pay the employee’s salary at least five working days before the leave begins.
If an employee cannot take all or part of their annual leave within a calendar year, the employer must carry over any unused leave to the first six months of the following calendar year.
Should the employee still be unable to take their accrued leave, such as in the case of a prolonged illness, the employer must grant the unused leave with the employee’s consent within 18 months, starting from the year following the one when vacation was accrued.
There are several paid national and religious holidays in Romania. Some of them include:
- New Year’s Day & Day After New Year’s Day
- Unification Day
- Labor Day
- International Children’s Day
- St. Mary’s Day
- National Day of Romania
Sick Leave
Romanian employees are permitted to take up to 183 days of sick leave per calendar year. The employer pays for the first five days of sick leave at 75% of the average employee’s salary based on the preceding six months.
Any subsequent sick days are paid for by social insurance. To qualify for sick leave, the employee must live in Romania and be enrolled in the social health insurance system for at least six months in the last year.
Maternity Leave
Pregnant employees are entitled to 126 days of paid maternity leave. This is typically split evenly between 63 days before the birth and 63 days after. The government pays maternity leave at a rate of 85% of the employee’s net income in the previous six months.
An additional benefit is maternal risk leave, which must be granted to pregnant or postpartum women not currently on maternity leave if their employer cannot guarantee working conditions free of risks to their health or that of their child.
The Unique National Fund of Health Insurances fully covers the benefit, and it’s paid at 75% of the employee’s average gross earnings over the last six months.
Paternity Leave
Fathers who actively participate in a child’s care are entitled to 10 days of paid leave following the birth of their child. The leave increases to 15 days if the employee participates in an infant care course.
Employees must take paternity leave during the first eight weeks after the child’s birth. To qualify, the employee must submit a written request and provide the child’s birth certificate. The paternity leave allowance is paid from the employer’s salary fund and is included in the employee’s taxable income.
Childcare Leave
Following maternity leave, the mother or father may be eligible for childcare leave, also known as parental leave, until the child reaches the age of 2. To qualify, the employee must have contributed to social security during at least 12 months of the last 24 calendar months.
During leave, the employer suspends the employee’s contract and ceases payments. Instead, the employee receives an indemnity payment from social services.
By law, the father is required to take at least one month of parental leave once the mother returns to work. Parents aren’t allowed to take leave simultaneously, as only one parent at a time can receive the state indemnity.
Other Statutory Benefits
Additional mandatory benefits in Romania include:
- Public health and pension insurance
- Labor safety training and work equipment (if applicable) paid for by the employer
- Annual medical tests paid for by the employer
- Weekend allowance
- Night shift bonus
- Overtime pay or additional paid days off
- Personal salary deduction for incomes of a monthly maximum of RON 5,000
Why Digital Nomads Love Romania
Romania began offering a digital nomad visa in 2021. This temporary residence visa is available to remote workers from non-EU countries. Applicants must be remote employees working for a company based outside of Romania to qualify.
The visa is valid for one year and can be renewed for another year. Digital nomads aren’t required to pay income tax while working in Romania.
Romania attracts digital nomads drawn to its natural beauty, history, and low cost of living. There is a well-developed internet infrastructure, with some of the fastest connections in the region. For visitors who enjoy socializing while they work, there are a variety of coworking spaces to choose from in multiple Romanian cities.
Confidently Hire in Romania with RemoFirst
Partnering with an Employer of Record (EOR) like RemoFirst can help companies hire top talent, knowing they will be in compliance throughout the employment process. We help companies like yours with global hiring in more than 180 countries, including Romania. Contact us today to book a demo and learn how we can help you grow your team.
