Romanian Government creates internship contract, amid measures to tackle workforce crisis

According to a 2018 Randstad HR Trends report, Romania is facing a workforce crisis, with 47% of Romanian employers seeking to hire temporary employees, 71% of employers seeking to hire permanent employees, and 94% of employers seeking to retrain their new employees to meet their new tasks.

To tackle the workforce crisis, the Romanian Government has decided to adopt a three-tiered approach: implement flexible working conditions and benefits for current employees, offer fresh opportunities for employers to hire interns as well as employees, and increase fines against employers who are unwilling to enter labour contracts with their employees.

There are two important laws with respect to the implementation of flexible working conditions and benefits for current employees. Firstly, Law No. 81/2018 on teleworking, effective as of 5 April 2018, allows employees to work remotely by using IT&C. Secondly, Law No. 165/2018 on tickets of value, effective as of 1 January 2019, provides employees – on agreement with their employer – certain benefits, such as meal tickets (up to 15 lei), present tickets (up to 50 lei), kindergarten tickets (up to 450 lei per month), cultural tickets (up to 150 lei per month) and holiday vouchers (up to the equivalent of six minimum monthly gross salaries, per fiscal year).

In respect of new opportunities for employers to hire temporary and permanent employees, Law No. 176/2018 on internship, effective as of 18 August 2018, allows employers to use interns as temporary employees (Law No. 176/2018). Additionally, the Emergency Government Decision No. 60/2018, effective as of 9 July 2018, encourages the employment of certain categories of individuals, such as unemployed persons, apprentices, or university graduates.

Law No. 176/2018 was effective as of 18 August 2018, but its implementation was conditional upon the Romanian Ministry of Labour’s publication of the standard internship contract that employers may use for securing an intern’s services for a pre-determined period of time. The Ministry of Labour Order No. 2004/2018 of 12 October 2018, created the standard internship contract, allowing employers to utilise Law No. 176/2018 and use an intern’s services.

To reprimand the practice of using undocumented workers, Law No. 88/2018 amending the Labor Code was enacted (Law No. 88/2018), effective as of 13 April 2018, which imposes significant fines (20,000 lei) on employers who use the services of undocumented employees. Law No. 88/2018 also provided that each labour contract must be concluded in written format, in the Romanian language, and registered with the employees’ electronic register, no later than one day prior to the day that the employee will start his/her employment.

Furthermore, the law has defined the term “place of work”, as the location determined by the employer where the employee carries out his/her activity, where a hard or electronic copy of such employee labour contract, together with evidence of his/her daily working time, must be kept, in order to be inspected by labour authorities, upon their request. For employees working in multiple locations, or from home, Law No. 88/2018 requires employers to maintain a record of working hours on a daily basis, based upon a written understanding entered with the employee, such as under the employee labour contract.

As mentioned above, employers who use employees without a written labour contract, or who fail to register the contract with the electronic register of employees will be liable for an administrative fine of 20,000 lei per employee, up to 200,000 lei in total. Employers who make employees work beyond their working schedule will be fined 10,000 lei per employee, up to 200,000 lei in total.

If, upon a second inspection, the employer has failed not only to pay the fine, but also failed to remedy the misconduct that triggered the fine, such behaviour would be deemed a criminal offence, punishable by either criminal fine, or by imprisonment, from 6 months to 2 years.

For any further information on the matters in this article, please contact Dr. Marius Petroiu.