Labor Laws in Romania

Country & Workforce
Romania is a prime destination for global employers due to its low corporate tax rates and skilled workforce. Located at the crossroads of Southeast and Central Europe, it serves as a gateway between Europe and the Middle East. Its geographical advantage allows businesses to export and import goods at reduced costs while accessing global raw materials.

Key Benefits for Employers

Taxation: Romania has one of the lowest corporate tax rates in Europe (16%), with minimal employer tax contributions.
EU Membership: As a long-standing EU and NATO member, Romania provides businesses with access to vast markets and lower transaction costs.
Employment Protection
The Romanian Labor Law applies to both domestic and international employees under specific conditions. It also protects Romanian citizens working abroad for Romanian employers if the local labor laws are less favorable than Romanian laws.

Employment Contracts
Contracts must be in writing and include essential details such as:

Job description, location, and start date
Salary, working hours, and benefits
Payment methods, notice periods, and probation terms
Working Hours & Holidays

Standard working hours: 40 hours/week (5 days, 8 hours/day)
Overtime: Maximum 8 additional hours/week (total capped at 48 hours/week)
Paid annual leave: 20 days/year
Public holidays: 15 days/year, including New Year, Easter, and Labor Day.
Sick Leave
Employees are entitled to up to 180 days of paid sick leave, funded partially by employers and the National Health Fund.

Minimum Wage
As of 2023, the minimum wage is 1,863 RON (~403 USD).

Termination Policies

Notice period: 20 days for general roles, 45 days for leadership positions.
Severance pay: Required only if specified in the employment contract.
Compliance Strategies for Employers
Employers can manage compliance through:

In-house HR Teams: Oversee payroll, leave, and working hour regulations.
Outsourced HR Services: Cost-effective compliance support.
Employer of Record (EOR): Streamlined compliance solution for international companies.
Romania’s labor laws, though comprehensive, are transparent and ensure both business efficiency and employee protection, making it an attractive destination for international enterprises.