Great talent is everywhere — you can find skilled professionals in countries all over the world. If you’re looking to add valuable team members, consider hiring from Romania. The country has a low cost of hiring and a high proficiency in English, making it a desirable place for employers looking to hire abroad.
However, hiring employees abroad does come with challenges. An Employer of Record (EOR) offers a simple, stress-free way to hire and pay global talent legally and easily. It provides everything you need to hire, onboard, and manage employees in Romania.
This article will guide you through the reasons and benefits of using an EOR to hire employees from Romania.
How Does an Employer of Record Help with Remote Work?
Without permanent establishment (PE) status, a company cannot legally hire employees in a foreign country. An EOR is the legal employer on paper for a foreign company. Working with a foreign employer, an EOR oversees the major areas of global employment. These include hiring, tax withholding, and structuring compensation and benefits packages, among others.
The Benefits of Hiring in Romania
For companies looking to recruit new employees on their globally distributed team, look no further than Romania. Romania has a low cost of living, so employers are able to reduce costs while still recruiting top talent. Its national minimum wage is one of the lowest among the 27 European Union countries.
Romania also has a favorable business landscape. While Romanian is the official language, the population is generally multilingual, speaking English, French, and German. The linguistic diversity eliminates communication barriers when conducting business with North American and Eastern European colleagues.
Romania observes Eastern European Time, enabling easy coordination and collaboration with adjacent European regions. Collaboration with North America is likely to take place in the mornings which are afternoons in European time zones.
Romania’s strategic location also offers easy access to both Western and Eastern European markets. As a member of the European Union, the country is a bridge to the world’s largest single market, which accounts for 16% of world imports and exports as of 2022. Lastly, the emerging tech sector in capital city Bucharest has led to the creation of the first Romanian unicorn startup, UiPath.
With its affordable labor costs, promising growth in key sectors, and access to a massive European market, Romania is a very financially sensible choice for foreign employers when it comes to global hiring.
Interested in hiring employees elsewhere in Europe? How to Hire an Employee through an EOR in Moldova is your guide.
What Does an Employer of Record Do?
When hiring full-time employees in Romania, there are several areas of employment that foreign employers must comply with. These are largely regulated under the Romanian Labor Code. Where applicable, the Social Dialogue Law governs collective labor agreements. Working with an EOR ensures compliance with Romanian labor laws.
Employment Contracts & Documentation
In Romania, both indefinite and definite contracts, the latter of which is limited to a duration of 36 months including a maximum of three successive terms, can be concluded upon written form in Romanian. Contracts must include probationary periods, severance details, benefits, and salary.
Working with an EOR, like Borderless, will guarantee that all the necessary information is in the contract. An EOR will also make sure that all the correct documentation is provided.
Vacation, Paid Time Off, and Public Holidays
Employees in Romania are entitled to 20 days of annual paid time off. They are also entitled to five days of sick leave. Maternity leave is 126 days and paid at 85% of an employee’s average gross monthly earnings of the six months prior to this entitlement while paternity leave is 10 days and paid at 88% of basic salary.
There are 15 public holidays in Romania:
- January 1: New Year’s Day
- January 2: Day after New Year’s Day
- January 24: Unification Day
- March/April: Orthodox Good Friday
- March/April: Orthodox Easter Day
- March/April: Orthodox Easter Monday
(Easter dates vary yearly)
- May 1: Labor Day
- June 1: Children’s Day
- June 4: Orthodox Pentecost
- June 4: Orthodox Pentecost Monday
- August 15: St. Mary's Day
- November 30: St Andrew's Day
- December 1: National Day
- December 25: Christmas Day
- December 26: Second Day of Christmas
Navigating different types of leave and public holidays is challenging, especially in a different country. While there are guides and practices for employers to manage PTO on a global team, an EOR will ensure that everything is properly tracked and calculated.
Insurance and Benefits
Using an EOR to hire employees in Romania will guarantee that employees have proper insurance coverage and the necessary benefits required by local laws and regulations. This includes healthcare and unemployment benefits.
An EOR will also take care of supplemental benefits for employees, like dental, vision, life insurance, and retirement savings plans. With global hiring becoming more and more competitive, it pays to offer employees attractive additional benefits.
Tax Obligations
Employer taxes in Romania are 6.25%, which includes contributions towards labor insurance and social security. An EOR like Borderless will provide the most up to date social security that both you, the foreign employer, and your employees, will need to make.
Employer Responsibilities
While the EOR takes care of all legal and HR procedures, like contracts, payroll, and taxes, the employer also has some responsibilities. The employer needs to take on responsibilities as if they were hiring a local candidate; this includes recruitment, interviewing, and onboarding. Once the employee is onboarded, it’s the employer’s responsibility to maintain the subordinate working relationship.
It’s also up to the employer to be aware of the working culture in Romania and connect with employees. This will create a positive and welcoming work environment that encourages communication and inclusivity, ultimately helping with employee performance and retention.
Choosing the Right EOR for Your Business
There are several key considerations for employers to make the most informed decisions in choosing the best EOR for their businesses.
- Geographic coverage: Make sure that your EOR of choice can legally operate in Romania.
- Employment services: The suite of employment services offered by a competitive EOR should cover hiring, onboarding, payroll, benefits, and HR management.
- Reputation: When selecting an EOR, get a sense of its past work and experience. Make sure that it has a great track record and the local know-how to bring you value add.
- Cost: A high-value EOR’s pricing should be transparent and reasonable.
- Flexibility: An EOR should offer customized employment solutions to meet your specific needs and requirements.
Overall, foreign employers should choose an EOR that can provide cost-effective, reliable, and compliance-first employment solutions. This will enable you to navigate and expand into foreign waters with confidence, ease, and trust.
An EOR Like Borderless Can Help
In over 170 countries, we are ready to help you hire, onboard, manage, and pay remote employees, wherever you are.
Our experienced team of legal experts provides guidance on compliance and assists employers all over the world in navigating the cultural and professional environment in the country they choose to do business in.
Book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
