Hiring employees in a foreign country can be a complex and challenging process, but with the advent of Employer of Record (EOR) services, businesses can streamline their expansion into international markets.
In this guide, we will explore the essential steps and considerations for hiring employees in Romania using an EOR.
Labor Law
Before deciding whether to hire in Romania or not, it is vital to note the different regulations in labor.
- Employment Contracts in Romania: In Romania, employment contracts must be in Romanian and include the salary in Romanian leu. The minimum notice period for termination is 20 days, which extends to 45 days for managerial positions.
- Working Hours: The minimum wage in 2023 is 3000 RON, equivalent to around 660 euros per month. A standard workweek in Romania is 40 hours, with 8 hours a day. The total weekly working hours, including overtime, cannot exceed 48 hours.
- Holidays: Romania has 10-12 public holidays, depending on the employee’s religious denomination. Employees working on public holidays must receive additional days off within 30 days of the holiday.
- Sick Leave: Employees who make social security payments are eligible for a maximum of 183 days of sick leave.
- Maternity Leave: Mothers who have contributed to the social security system for at least 12 months before childbirth are entitled to fully paid maternity leave, which is 126 days, with a minimum of 42 days to be taken after birth.
- Tax Law in Romania: Corporate tax in Romania is 16%, while VAT is 19%. The income tax is a flat rate of 10%.
Hire employees in Romania
Expanding your business often involves hiring new employees, and when you want to do so quickly and efficiently while minimizing the administrative burden, a Employer Of Record can be your best option, but there are others.
Employer of record in Romania for companies
When it comes to bringing international employees on board, it involves different and complex tax systems. This also elevates the risk of incurring expensive fines and fees.
- Employer of Record (EOR) services step in to manage the onboarding, payroll, taxation, benefits, and compliance aspects when hiring foreign talent.
- By outsourcing these responsibilities, it enables you to focus on the management and cultivation of top talent.
- Furthermore, organizations no longer find it necessary to relocate their workforce, as EORs utilize established local entities worldwide to hire foreign workers on their behalf.
- The primary advantage of utilizing an EOR to bring in international talent is the ease with which you can explore opportunities in new markets.
- Opting for an EOR is the safest and fastest route to international expansion.
- The recruitment flexibility offered by an EOR solution renders it an efficient and cost-effective choice, resulting in a valuable partnership.
Independent Contractors
Independent contractors operate under a different company name and fulfill specific job responsibilities as outlined in a limited contract. In comparison to employees, companies exert a lower degree of control over these contractors.
- Independent workers have the freedom to work from any location, while company employees are typically based on-site.
- Employers provide their staff with the necessary equipment for their job tasks, whereas contract workers are responsible for procuring and maintaining their own
- Employees follow a fixed schedule, whereas contractors enjoy greater flexibility in determining how much work they do and when they do it.
- For companies considering the recruitment of overseas personnel, it is advisable to contemplate independent contractors for short-term projects.
- An experienced contractor can be an ideal choice for companies in need of specific skills or expertise, especially when hiring or transferring a full-time employee may not be practical.
Advantages and disadvantages of hiring foreign workers in Romania
Here are some of the key advantages and disadvantages:
Advantages of Hiring Foreign Workers in Romania:
- Cost-Effective Labor: In some cases, hiring foreign workers may be cost-effective, as labor costs can vary between countries.
- International Experience: Foreign employees may have international experience and cultural insights that can benefit your business when expanding into global markets.
- Language Skills: If your business deals with international clients, foreign workers can bring language skills that are valuable for communication and negotiation.
Disadvantages of Hiring Foreign Workers in Romania:
- Legal and Administrative Complexity: Dealing with work permits, visas, and legal compliance can be complex and time-consuming.
- Work Authorization: Ensuring that foreign workers have the necessary work authorization can be a legal and administrative burden.
- Costs and Benefits: The costs associated with hiring foreign workers, including relocation and visa expenses, can outweigh the benefits.
INS Global Facilitates Your Selection of the Ideal Employment Solution
If your company is in need of sourcing talent from overseas but isn’t ready to establish a local presence, our EOR solution provides the answer. With a wealth of experience spanning over 15 years, INS Global has been providing worldwide organizations with the necessary guidance for their global recruitment and expansion endeavors.
Collaborating with us ensures that your international hires receive all the local benefits in full compliance with the relevant local regulations.
Ultimately, partnering with INS Global streamlines the management of time and costs, allowing you to direct your focus towards activities that nurture the growth of your business.
Our team of EOR experts stands ready to initiate a no-cost consultation to delve into your expansion strategy today.
FAQ
- What is the role of an EOR in Romania?
An EOR in Romania acts as the official employer, handling payroll, compliance, and administrative tasks for foreign businesses hiring local employees.
- Do I need to establish a legal entity in Romania to hire employees?
No, with an EOR, you can hire employees in Romania without setting up your own legal entity.
- How do I find the right EOR provider in Romania?
Look for EOR providers with a good reputation, experience in Romania, and comprehensive services.
- What are the cost considerations of hiring through an EOR?
Costs include EOR service fees and taxes, which vary depending on the provider and employee salaries.
- How can I ensure compliance with Romanian labor laws when using an EOR?
Your EOR will handle compliance, but regular audits and communication are essential for oversight.
