A European technology company opens a Bucharest office and hires its first Romanian engineer. The contract is prepared using a template from the firm's home jurisdiction. Three months later, the company discovers it has missed mandatory REVISAL registration, omitted required clauses under Romanian employment legislation, and failed to enrol the employee in the local social security system. The resulting fines and corrective paperwork cost more than the original legal budget for the entire market entry.
Employment contracts in Romania must be concluded in writing, registered in the REVISAL (Registrul general de evidenta a salariatilor. the national electronic register of employees) before the employee's first working day. Additionally. Must include a defined set of mandatory clauses under Romanian employment legislation. Social security contributions are due from the first day of employment, and the applicable collective agreement may impose additional obligations beyond the statutory minimum. Foreign employers without a Romanian legal entity must establish a local presence or use a compliant employer-of-record structure before hiring.
This guide covers the step-by-step process for drafting and registering employment contracts in Romania, the documentary checklist foreign employers need. The most common errors made by international businesses, cost expectations. Additionally, a decision framework for choosing the right hiring structure.
The Romanian employment contract: what the law requires
Romanian employment legislation – the body of law governing individual labour relations – sets out non-negotiable minimum content for every employment contract. A contract that omits any of these elements is not simply deficient; it may expose the employer to administrative sanctions and leave disputed clauses unenforceable.
The mandatory elements include: the identity and registered address of both parties, the workplace or. There, applicable, a statement that the role is mobile, the job title and duties. The agreed remuneration (base salary plus any allowances), the working time arrangement, the duration of the contract. Additionally, the applicable notice periods for both parties. Where no collective agreement applies at sector level, the statutory minimums govern.
A critical distinction applies to contract duration. The default under Romanian employment legislation is an indefinite-term contract. Fixed-term contracts are permitted only in circumstances defined by law – for example, to replace an absent employee, to cover a temporary increase in activity, or for seasonal work. Using a fixed-term structure outside these permitted grounds is a frequent mistake by foreign employers. Romanian courts treat such contracts as indefinite-term from inception.
Romanian employment legislation also recognises part-time contracts, remote work agreements, and telework contracts as distinct categories. Each carries its own documentary requirements. A telework contract, for instance, must specify the exact remote work schedule, the employer's obligations regarding equipment, and the arrangements for occupational health and safety at the remote location. Many foreign employers miss these specifics when adapting contracts from other EU jurisdictions.
Where a relevant collective agreement exists at sector or company level, its provisions automatically apply to all employment contracts in that sector or entity. Collective agreements in Romania may improve upon – but never reduce below – the statutory minimums. A foreign employer entering a sector with an active collective agreement must review its terms before finalising any individual employment contract.
Step-by-step process: from offer to registration
The hiring process in Romania follows a defined sequence. Errors at any stage compound downstream, so understanding each step is essential for foreign employers.
Step 1 – Establish the hiring entity. Before any employment contract can be registered in Romania. The employer must be registered as a taxpayer with the Romanian tax authority and hold credentials for the REVISAL system. This requires either a Romanian company (typically a societate cu raspundere limitata – a private limited liability company), a registered branch, or a representative office with employment authority. Obtaining REVISAL credentials from the territorial labour inspectorate takes one to three weeks in practice.
Step 2 – Prepare the employment contract. Draft the contract in Romanian. Romanian employment legislation does not require a single official language, but all state registers and labour inspectorate submissions are in Romanian. Bilingual contracts are common in practice for international hires, but the Romanian text governs in case of conflict.
Step 3 – Pre-employment checks. The employer must verify the employee's right to work in Romania. For EU/EEA nationals, this is automatic. For non-EU nationals, a work permit and residence permit are required before the contract is signed. Processing times for non-EU work authorisations range from four to eight weeks, depending on permit category and volume at the General Inspectorate for Immigration.
Step 4 – Sign the contract. The employment contract must be signed by both parties before the employee's first working day. There is no grace period. Permitting an employee to start work before the contract is signed – even informally – is a serious violation under Romanian employment legislation and triggers immediate fines upon inspection.
Step 5 – Register in REVISAL. The employer must upload the contract data to REVISAL no later than the day before the employee begins work. Registration is electronic and must be completed using the employer's REVISAL credentials. The system generates a unique identifier for each employment record. Failure to register on time is one of the most commonly penalised violations identified by Romanian labour inspectors.
Step 6 – Social security enrolment. Social security contributions – covering pension, health insurance, and unemployment insurance – begin from the first day of employment. The employer must declare and pay its share of contributions monthly. The employee's share is withheld at source. Contribution rates under Romanian social security legislation are set annually and apply to the gross salary. Late or omitted contributions attract interest and penalties.
Step 7 – Occupational health assessment. Romanian employment legislation requires that every new employee undergoes an occupational health assessment before starting work, or within a short window thereafter depending on role risk classification. The employer bears the cost. Many foreign employers overlook this requirement entirely. Failure to obtain the medical clearance certificate can invalidate the employment relationship in the event of a subsequent dispute.
For guidance on the broader corporate steps involved in establishing a legal presence in Romania. which must precede these employment steps. see our work on corporate law in Romania. This covers entity formation timelines and registration procedures.
To receive an expert assessment of your hiring obligations in Romania, contact us at info@ferrazwhitmore.com.
Documentary checklist and common errors by foreign employers
Before registering the first employment contract in Romania, a foreign employer should confirm the following documents are in place:
- Certificate of registration of the Romanian entity or branch with the Trade Register
- Tax registration certificate from the Romanian tax authority
- REVISAL operator credentials issued by the territorial labour inspectorate
- Signed employment contract in Romanian (bilingual version advisable for international hires)
- Occupational health assessment certificate for the employee
The following errors appear repeatedly in the experience of practitioners advising foreign employers entering Romania.
Using home-country contract templates without adaptation. A German or UK employer template will almost certainly omit mandatory clauses required under Romanian employment legislation. The absence of a required clause does not make the contract void, but it does expose the employer to fines and creates gaps that favour the employee in any dispute.
Treating the probation period as unlimited flexibility. Romanian employment legislation caps the probation period at 90 calendar days for standard roles and 120 days for management positions. Terminating an employee during a validly agreed probation period requires no specific grounds. However, probation periods must be expressly agreed in writing in the contract itself. A verbal understanding has no legal effect.
Misclassifying workers as contractors. Romanian labour law and tax legislation both look to substance over form. A person who works exclusively for one employer, under that employer's direction, using the employer's equipment, on a fixed schedule, is an employee – regardless of what the contract says. Misclassification carries significant social security arrears exposure and administrative sanctions. Labour inspectors in Romania actively investigate contractor arrangements, particularly in the technology and construction sectors.
Omitting the REVISAL step for remote workers. Some foreign employers assume that employees working entirely from home – particularly those hired to work for a foreign entity remotely – fall outside Romanian REVISAL requirements. This is incorrect. If the employee is a Romanian resident performing work under an employment contract subject to Romanian law, REVISAL registration is mandatory.
Failing to update REVISAL on contract amendments. Any change to the terms recorded in REVISAL – salary, job title, working time, workplace – must be registered within five working days of the amendment taking effect. Many employers register the original contract correctly but then fail to update the system when promotions, pay rises, or role changes occur. This creates a discrepancy between the REVISAL record and the actual employment terms, which complicates any future audit or dispute.
Termination procedure and dismissal notice obligations
The termination procedure is the area where foreign employers most frequently incur liability in Romania. Romanian employment legislation distinguishes sharply between termination at the employer's initiative, mutual termination, and resignation.
Termination at the employer's initiative may be for reasons relating to the employee (disciplinary grounds or incapacity) or for reasons relating to the employer (redundancy). Each pathway carries distinct procedural requirements. A dismissal for disciplinary reasons requires a prior disciplinary investigation, with the employee given a formal opportunity to respond in writing. Skipping this procedure – even where the misconduct is clear – renders the dismissal invalid. Romanian courts consistently reinstate employees dismissed without proper procedure, regardless of the underlying justification.
Redundancy dismissals require a written decision, a statement of reasons, and the observation of the statutory dismissal notice period. Under Romanian employment legislation, the minimum notice period is 20 working days. The applicable collective agreement or the individual contract may set a longer period. Notice must be given in writing. An employer who pays a salary in lieu of notice without a contractual right to do so risks the employee challenging the termination on procedural grounds.
Collective redundancies – affecting a threshold number of employees within a 30-day period, calculated by reference to the total workforce size – trigger additional obligations. These include notification of the territorial labour inspectorate and the relevant employment agency, a consultation period with employee representatives, and compliance with specific selection criteria. The consultation period runs for at least 30 days. Failure to observe these steps exposes the employer to significant liability and may delay the redundancy process by months.
Mutual termination by agreement (acordul partilor – termination by mutual consent) is the most straightforward exit route where both parties agree. There is no mandatory notice period, no requirement to state grounds, and no obligation to consult. In practice, this is the preferred route for negotiated separations in Romania. However, the agreement must be in writing and signed by both parties. An employee who later claims they signed under duress may challenge the termination before the labour courts.
Practitioners advising foreign clients note that Romanian labour courts apply a strong pro-employee interpretive presumption. Procedural defects – however minor – are treated seriously. Foreign employers accustomed to at-will termination systems or short procedural requirements will find the Romanian system significantly more demanding in terms of documentary discipline.
For a comparative perspective on employment contract obligations in another EU civil law jurisdiction. Our guide to employment contracts in Portugal sets out the equivalent framework under Portuguese employment legislation. This includes notice periods and termination procedures that share structural similarities with the Romanian system.
To discuss a tailored strategy for managing employment obligations in Romania, reach out to info@ferrazwhitmore.com.
Decision framework: choosing the right hiring structure
Foreign employers approaching the Romanian market face a genuine choice between several hiring structures. The right approach depends on the volume of hires, the speed of market entry, and the employer's long-term commitment to Romania.
This approach in Romania is applicable if the following conditions are met:
- The employer has a registered Romanian entity and REVISAL credentials
- The employment contracts are concluded in writing before the employee's first working day
- Social security obligations are met from the first month of employment
- The applicable collective agreement (if any) has been reviewed and incorporated
- Occupational health assessments are obtained for each new hire
Before initiating employment in Romania, verify the following:
- Is a Romanian entity registered and operational, or is an employer-of-record arrangement in place?
- Has the REVISAL operator credential been issued by the territorial labour inspectorate?
- Does a sector-level or company-level collective agreement apply to the intended roles?
- Are any intended hires non-EU nationals requiring work authorisation?
- Has the employment contract been reviewed against mandatory content requirements under Romanian employment legislation?
For employers hiring one to three employees on a short engagement, an employer-of-record arrangement minimises setup cost and time. The employer-of-record entity holds the employment contracts, handles REVISAL registration and social security, and charges a service fee. This route is also common for pilot projects where the employer is testing the Romanian market before committing to a permanent entity.
For employers hiring a permanent team of four or more, the cost economics shift. Employer-of-record fees – which typically run into hundreds of euros per employee per month – exceed the cost of maintaining a local Romanian entity once the team reaches a meaningful size. At that threshold, establishing a societate cu raspundere limitata and managing employment directly is more cost-effective.
Foreign employers expanding simultaneously across multiple EU jurisdictions should note that Romanian employment legislation operates independently of EU harmonised employment rules in several respects. particularly on probation periods. Collective redundancy thresholds. Additionally, the mandatory content of employment contracts. A template that complies with one EU jurisdiction's rules may require significant revision to work in Romania.
For a full picture of the obligations that arise once a Romanian entity is in place. This includes corporate governance requirements and compliance obligations. Our overview of employment law in Romania addresses the complete regulatory regime facing foreign employers operating through a local entity.
Frequently asked questions
Q: How long does it take to register an employment contract in Romania?
A: Under Romanian employment legislation, a foreign employer must register the employment contract in the REVISAL electronic register before the employee's first working day. Registration itself is immediate once the employer has the required credentials, but obtaining those credentials from the territorial labour inspectorate can take one to three weeks. Delays in registration expose the employer to administrative fines.
Q: Can a foreign company hire employees in Romania without a local entity?
A: A common misconception is that a foreign company can engage Romanian workers indefinitely without a local legal presence. Romanian employment and tax legislation requires that employers paying salaries in Romania register as taxpayers and fulfil social security obligations locally. In practice, most foreign businesses use either a Romanian subsidiary, a registered branch, or an employer-of-record arrangement to meet these obligations lawfully. Engaging a lawyer in Romania with cross-border experience is advisable before committing to any hiring structure.
Q: What are the minimum notice periods for dismissal in Romania?
A: Romanian employment legislation sets a minimum dismissal notice period of 20 working days for employees in standard roles. The applicable collective agreement or individual employment contract may provide longer notice periods. Failure to observe the correct dismissal notice renders the termination procedure legally vulnerable and may result in reinstatement orders or compensation awards by Romanian courts.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports foreign employers entering the Romanian market with the full range of obligations arising from employment contracts in Romania. from entity setup and REVISAL registration to collective agreement compliance. Termination procedures, and cross-border workforce structuring. We combine Portuguese civil law expertise with English common law tradition to deliver practical, results-oriented counsel for international businesses operating across multiple legal systems. As a law firm in Romania-related matters, our team works directly with local counsel to ensure documentary and procedural accuracy at every step. To discuss your employment obligations in Romania, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.