Employment due diligence in Romania for a business acquisition

Employment Due Diligence in Romania: A Buyer’s Legal Checklist

Employment law • M&A • Romania

Employment due diligence in Romania helps a buyer understand the people, contracts, payroll obligations and workforce risks it may inherit with a target company. The review should connect employment documents with the transaction structure, valuation, warranties, indemnities and post-closing integration plan.

The scope and consequences of employment due diligence differ significantly between share acquisitions and asset transactions. In a share acquisition, the employing company normally remains the same legal entity, while an asset or business transfer may require a separate analysis of whether employees and employment-related rights transfer with the relevant undertaking.

What is employment due diligence in a Romanian transaction?

Employment due diligence is a transaction-focused review of the target’s workforce and employment liabilities. It is not the same as a general HR audit. The buyer needs to know which risks affect price, continuity, retention, integration and the contractual protection package.

The scope may include employees, directors, consultants, independent contractors, temporary workers, secondees, expatriates and other individuals providing services to the target. The legal analysis typically depends on the actual working relationship and not solely on the contractual label used by the parties.

Romanian employment due diligence is primarily assessed under Law No. 53/2003, the Romanian Labour Code, together with the special legislation applicable to matters such as transfers of undertakings, collective relations, occupational health and safety, employee data and the employment of foreign nationals.

This guide is distinct from general Romanian employment law advice, disciplinary dismissal guidance and the separate review of employees versus independent contractors. Its focus is the buyer’s decision before, during and after an acquisition.

Buyer’s Review Map

Interactive review map

Select an employment area

Click or tap a card to see the first documents and questions to request.

Workforce structure

Request a headcount by entity, role, location and employment status. Identify employees, directors, contractors, temporary workers, secondees and key individuals whose departure could affect the business.

Employment Due Diligence Risk Scanner

Interactive risk screen

Select the signals that apply

This is a preliminary review signal, not an automated legal opinion. Select the statements that describe the target. The result helps identify where the data room needs deeper review.

Preliminary result: select the statements that apply to see the suggested diligence response.

What does Romanian employment due diligence examine?

The central test is whether the target’s written documents, payroll records and actual employment practice tell the same story. A signed contract may not reveal unpaid overtime, informal benefits, misclassification, inconsistent termination practice or undocumented management arrangements.

The buyer should identify the employing entity, workplace, reporting line and practical role for each material category of worker. It should then compare that information with employment contracts, amendments, payroll, internal policies, time records, leave records and communications where relevant. Gaps are not necessarily breaches, but they are signals that require explanation and proportionate follow-up.

The review should also distinguish liabilities that remain with the seller from risks that will affect the buyer after completion. This is especially important where the buyer intends to reorganise the workforce, harmonise benefits, move employees between group entities or change managers shortly after closing.

Share deals, asset deals and transfers of undertakings

In a share acquisition, the target company remains the employer and its employment contracts generally continue within the same legal entity. The buyer nevertheless needs to review change-of-control provisions, transaction bonuses, retention arrangements, employee communications and any post-closing measures that could require consultation, consent or amendments.

In asset transactions or business transfers, buyers should assess whether Articles 173–174 of the Romanian Labour Code and Law No. 67/2006 on safeguarding employees’ rights in transfers of undertakings apply to the transfer of an undertaking, unit or part of one. Where the legal requirements for a transfer of undertaking are met, employment contracts and related rights and obligations may transfer automatically to the transferee together with the relevant business unit. Information and, where measures affecting employees are envisaged, consultation obligations may also arise.

Not every asset purchase constitutes a transfer of undertaking. The analysis is fact-specific and should examine the business activity, assets, workforce, organisation and continuity of the relevant economic unit. The transaction timetable should allow the parties to identify the affected employees, collective rights, accrued liabilities and mandatory information or consultation steps before completion.

Employment contracts and actual working practice

Romanian employment contracts should be reviewed for role, place of work, working time, salary, benefits, probation, confidentiality, intellectual property, mobility and termination-related terms. The review should not stop at the template. Amendments, side letters, emails, payroll records and established practice may create additional obligations or evidence.

For contractors and consultants, the buyer should test the factual relationship. Control, integration, exclusivity, personal performance, economic dependence and the way work is organised may matter more than the title of the agreement. Romanian tax authorities, labour inspectors and courts may examine the factual circumstances of the relationship irrespective of contractual labels. A contractor issue may create employment, tax and social-security exposure and should be assessed with the relevant accounting and tax workstreams.

Payroll, benefits and hidden employment liabilities

Payroll due diligence should reconcile employment terms with salary payments, bonuses, commissions, overtime, holiday pay, sick leave, meal or mobility benefits, expense policies and any retention or equity arrangements. The question is not only whether a payment was made, but whether the target has recorded and treated the payment consistently.

Potential liabilities may arise from unpaid entitlements, informal benefits, inaccurate working-time records, delayed payments, incorrect deductions or practices applied differently to comparable employees. The buyer should request explanations for material inconsistencies and determine whether they require quantification, remediation or a specific transaction protection.

Key employees deserve separate attention. A transaction may affect retention, reporting lines, incentives, confidentiality, non-compete obligations, intellectual-property arrangements and the continuity of client or technical relationships. The SPA and integration plan should identify which people are material to the investment case and what can realistically be done to retain them.

Where restrictive covenants are material to the investment, the buyer should verify their scope, enforceability, duration and, where applicable, compliance with the requirements governing post-termination non-compete obligations under Romanian law.

In technology-focused transactions, the buyer should verify the allocation of intellectual-property rights created by employees, contractors and management personnel. Employment contracts, contractor agreements, confidentiality undertakings and IP assignment documents should be reviewed together with the factual development process and the rights required to operate or commercialise the target’s products.

Dismissals, claims and protected employees

Termination risk should be reviewed through the underlying facts and procedure, not only through the existence of a signed dismissal decision. Request information on disciplinary investigations, performance procedures, redundancies, settlement arrangements, grievances, threatened claims, court files, labour-inspection requests and communications with employees or representatives.

The buyer should identify whether a claim may affect more than the individual claimant. A repeated payroll practice, a group-wide working-time issue or a pattern of termination decisions may create a wider exposure than the disclosed dispute suggests. Protected categories, leave-related rights and employee representation may also affect the timing and defensibility of a proposed post-closing change.

The review should cover collective labour agreements, collective-bargaining procedures, trade unions and employee representatives, including compliance with applicable information and consultation obligations. The target’s arrangements should be checked against Law No. 367/2022 on social dialogue, as subsequently amended, and against any sectoral or company-level collective terms that may apply.

Occupational health and safety and ITM history

Employment due diligence should also review occupational health and safety compliance under Law No. 319/2006. The data room should address work accidents, occupational diseases, mandatory training records, risk assessments, prevention measures and the organisation of occupational-health and safety responsibilities.

The buyer should request details of Labour Inspectorate (ITM) inspections, findings, sanctions and pending compliance measures. A recurring failure, incomplete risk assessment or serious accident may require specialist investigation, quantified remediation and specific transaction protection rather than reliance on a general employment warranty.

Data protection, monitoring and employee information

Employment due diligence often involves personal data about employees, candidates, managers and claimants. The buyer should establish what information is requested, who can access it, how it is shared in the data room and whether the target has a lawful and documented process for the disclosure.

The substantive review may include employee monitoring, access logs, CCTV, productivity tools, recruitment platforms, health information, international transfers, retention and security. Sensitive information should be minimised and appropriately protected. During preliminary stages, the parties should minimise employee-identifying information and consider anonymisation, aggregation, redaction or controlled clean-room procedures where appropriate. The transaction team should coordinate the employment review with the GDPR workstream rather than copy entire personnel files into a data room by default.

Where employee monitoring through electronic communications, access logs, productivity tools or video surveillance is involved, the review should assess compliance with the GDPR and Article 5 of Law No. 190/2018. Relevant issues may include necessity and proportionality, transparency, prior consultation with employee representatives, retention periods and whether a data-protection impact assessment is required.

Non-EU personnel, work authorisations and residence rights

For non-EU personnel, the review should assess compliance with Emergency Ordinance No. 32/2026 on access of foreign nationals to the Romanian labour market and Emergency Ordinance No. 194/2002 on the status of foreign nationals. Depending on the workforce and the applicable regime, the review may cover the employer’s registration or authorisation position, employment authorisations, residence rights, changes of employer or role, secondments and applicable reporting obligations.

What should the buyer request?

Interactive document checklist

Select a review area

Click or tap a numbered card to see the documents and checks relevant to that workstream.

Workforce data

Obtain headcount, roles, locations, employment status, start dates, salary bands and key-person information.

Employment risks and SPA protection

Select a row to highlight the transaction takeaway.

Employment due diligence matrix
Review areaWhat the buyer checksPossible transaction response
Who works for the target and whether the contractual labels match the factual relationship.Workforce warranty, remediation plan or specific protection for classification exposure.
Whether an asset or business transfer meets Articles 173–174 of the Labour Code and Law No. 67/2006, and which employees, rights and consultation steps are affected.Transfer plan, employee information or consultation process, liability allocation and closing timetable.
Salary, bonus, benefits, equity, expenses, payroll practice and unpaid entitlements.Disclosure, price adjustment, warranty or indemnity for quantified liabilities.
Terminations, disciplinary processes, protected employees, claims and authority investigations.Specific indemnity, closing condition, litigation reserve or post-closing conduct protocol.
Collective bargaining, employee representatives, trade unions, risk assessments, work accidents and ITM history.Specialist review, remediation covenant, specific warranty or indemnity for identified exposure.
Retention, management continuity, confidentiality, non-compete and ownership of employee or contractor-created IP.Retention arrangements, IP confirmations, transition covenant or targeted warranty.
Employee-data processing, monitoring, access, transfers, retention, security and compliance with the GDPR and Law No. 190/2018.Privacy remediation, updated notices, DPIA assessment or integration workstream.
Employer status, employment authorisations, residence rights, secondments and cross-border assignments under the current immigration framework.Condition precedent, authorisation or renewal plan, warranty or continuity arrangement.

Due Diligence Timeline

Transaction sequence

What should happen at each stage?

Before signing

Agree the scope, confidentiality controls, data-room categories and responsible contacts. Prioritise risks that could affect valuation, continuity or the timetable.

Bottom line for the buyer

Employment due diligence should end with a decision, not a document pile. For each material issue, the buyer should know the factual position, likely exposure, responsible owner, timing and contractual or operational response.

A practical report may classify findings as matters to accept, investigate, remediate before closing, disclose, protect through the SPA or manage through post-closing integration. That structure allows the buyer to negotiate from evidence and prevents employment risks from disappearing inside a generic compliance warranty.

Employment Due Diligence in Practice

Anonymised client matter. The following summary describes the type of employment due-diligence issues addressed in a transaction handled by Atrium Romanian Lawyers. Certain details have been anonymised and simplified to protect client confidentiality.

Employment review for the acquisition of a Romanian technology and business-services company

A foreign investor considered the acquisition of a Romanian technology and business-services company with a workforce operating across multiple locations. As part of the transaction, the buyer requested a workforce inventory, employment agreements, payroll records, contractor documentation, internal policies and information relating to ongoing employment disputes.

The review identified several matters requiring further analysis. Workforce records were not fully consolidated, certain contractors performed functions comparable to those carried out by employees, and some compensation practices appeared in payroll data without being consistently reflected in the underlying contractual documentation. The review also identified retention considerations affecting key personnel involved in the operational continuity of the business.

Issues identified

Workforce records, contractor classification, compensation documentation and key-person retention.

Atrium’s role

Document review, employment-risk assessment and coordination with the wider transaction team.

Transaction response

Targeted disclosures, contractual protection, document remediation and post-closing integration measures.

Atrium Romanian Lawyers coordinated the employment due-diligence workstream, reviewed the available documentation and prepared a risk-based assessment of the identified matters. Our team worked with the wider transaction team to prioritise the findings according to their potential legal, financial and operational impact.

The findings were translated into practical transaction recommendations, including targeted disclosures, specific contractual protections, pre-closing document remediation and post-closing integration measures.

The transaction documentation was updated to address the employment matters identified during the review. A structured plan was also prepared for addressing priority employment issues following completion.

This matter has been anonymised and simplified for publication. The appropriate legal analysis and transaction protections depend on the specific facts, documents, transaction structure and commercial objectives of each matter.

How Atrium Romanian Lawyers can assist

Atrium Romanian Lawyers can coordinate an employment due-diligence workstream for a Romanian acquisition, investment or corporate reorganisation. The review can cover workforce structure, contracts, payroll, working time, terminations, disputes, contractors, GDPR, permits, key employees and the translation of findings into transaction documents.

Frequently asked questions

Is employment due diligence necessary for every acquisition?

The scope should be proportionate to the target’s workforce, sector, transaction structure and known risk. A business with a large workforce, regulated operations, key employees or employment claims usually requires a deeper review.

What is the most common employment due-diligence gap?

A common gap is the absence of a reliable workforce inventory connecting contracts, payroll, working practice, disputes and employee data. Without that map, the buyer may not understand the liability it is assuming.

Can employment risks be addressed after closing?

Sometimes. The parties may agree a post-closing remediation plan, but urgent claims, missing permits, unlawful practices or risks affecting continuity may require action before closing or a specific contractual protection.

Should contractors be included in the review?

Yes. The factual relationship should be assessed where contractors perform work that resembles employment. The consequences may include reclassification, tax, social-security, employment and benefit exposure.

Does GDPR form part of employment due diligence?

Yes. The review should address employee and candidate data, particularly where monitoring, CCTV, HR software, health information or international transfers are involved. It should assess the GDPR and, where electronic or video monitoring is used, Article 5 of Law No. 190/2018, including necessity, proportionality, transparency, consultation, retention and any requirement for a DPIA.

What does the buyer receive at the end of the review?

The output may include a risk matrix, missing-document list, priority actions and drafting recommendations for warranties, indemnities, disclosure, conditions or post-closing measures.

Romanian lawyer reviewing employee and independent contractor arrangements with business clients

Employee vs Contractor in Romania: Legal Risks

Employee or independent contractor in Romania?

Foreign companies must match the contract to the way the work will actually be organised. Romanian employment and tax rules look beyond labels, invoices and foreign templates when control, integration and commercial independence point in another direction.

Individual Employment Labour Code Article 10 Subordination & Authority Mandatory Protections Payroll & Social Security ⚖ B2B Services Agreement Fiscal Code Article 7 4-of-7 Independence Test Commercial Autonomy Own Risk & Deliverables ✓ VS Romanian Substance-Over-Form Legal Review

A company cannot turn an employee into an independent contractor simply by changing the contract title. Romanian authorities and courts may examine how the relationship works in practice: who controls the schedule, location and method of work, whether the individual may serve other clients, who bears commercial risk and whose resources are used. Before engaging a Romanian contractor, foreign companies should test both the written terms and the operating model, document genuine independence and correct any inconsistent practices.

Hiring an individual in Romania requires an early classification decision. The company must determine whether it needs an employee working under its authority or an independent provider responsible for delivering agreed services through their own business activity.

This distinction affects much more than the contract label. It can determine employment protections, payroll and social-contribution treatment, working-time controls, termination requirements and the allocation of commercial risk. A foreign template describing someone as a “consultant” or “independent contractor” will not resolve those questions if the day-to-day relationship operates like employment.

Can the parties simply choose employee or contractor status?

No. The parties may choose a contractual structure, but that structure must match the legal and economic reality of the work. A services agreement cannot safely replace an employment contract where the individual is, in substance, working under the company’s authority and direction.

Romanian law approaches classification from more than one direction. The Romanian Labour Code defines an individual employment contract through work performed for and under the authority of an employer in return for remuneration. Separately, the Romanian Fiscal Code defines independent activity through a statutory set of criteria and allows the tax authorities to reclassify a transaction or activity so that its tax treatment reflects its economic substance.

The practical assessment therefore has two connected parts:

  1. Contractual structure: what rights, duties, control mechanisms and risks the documents create.
  2. Operational reality: how managers and the individual actually organise and perform the work.

Risk: A carefully drafted contractor agreement can still be undermined by daily instructions, fixed attendance, manager approval of absences, exclusivity, company-controlled tools or treatment identical to employees.

What is the practical difference between an employee and an independent contractor?

Decision factorEmployeeIndependent contractor
Legal relationshipPerforms work under an individual employment contract.Provides defined services under a civil or commercial agreement.
Direction and controlWorks for and under the authority of the employer.Controls the method and organisation of the service, subject to agreed deliverables.
Schedule and locationNormally follows contractual and employer-established working arrangements.Should have meaningful freedom to choose when, where and how the service is performed.
Commercial riskThe employer bears the business risk and owes the agreed salary.The provider assumes genuine risks linked to cost, performance and organisation.
Other clientsMay have other employment, subject to working-time, conflict and incompatibility rules.Should be free in substance to offer services to several clients.
Tools and resourcesWork is commonly performed with employer-provided systems and resources.The provider ordinarily uses or organises their own professional resources.
Statutory protectionsReceives the mandatory protections attached to employment status.Relies primarily on the services agreement and the law governing that agreement.
Ending the relationshipTermination must follow the applicable employment route and mandatory safeguards.Termination follows the contract and applicable civil or commercial rules.
Legal Matrix

The Workforce Classification Spectrum in Romania

Full Subordination • Mandatory daily working hours • Supervised work execution • Integrated into staff hierarchy ➔ Individual Employment (CIM) Gray / Misclassified Zone • Invoiced through PFA / SRL • But 100% exclusive dedication • Fixed salary-like retainers ⚠ High Reclassification Risk Commercial Autonomy • Freedom of place & schedule • Result/deliverable-based • Multi-client portfolio & risk ✓ Lawful B2B Contractor EMPLOYEE (CIM) SUBSTANCE OVER FORM INDEPENDENT (B2B)
Figure 1: The operational spectrum used by Romanian Labour & Tax authorities to assess workforce relationships.

No single row decides the classification. The correct conclusion depends on the relationship as a whole. For example, a contractor may need access to a client’s secure systems without becoming an employee. Conversely, issuing invoices through a registered business does not by itself prove independence if the individual remains subject to employee-like control.

What does Romanian employment law treat as employment?

The central employment indicator is subordination: the individual performs work for and under the authority of the employer in return for remuneration. The company’s control over the person, not merely its right to accept a deliverable, is particularly important.

Article 10 of the Labour Code defines the individual employment contract as the agreement under which an individual undertakes to perform work for and under the authority of an employer in exchange for remuneration. This is different from a genuine customer-provider relationship, where the customer specifies the expected result but does not manage the provider as part of its workforce.

Where the facts point to employment, our employment lawyers in Romania can review the proposed contract, workplace controls and onboarding documents before work begins.

For employment, the contract must be concluded in writing, in Romanian, no later than the day before the employee starts work. The employer must also complete the required employee-register formalities before work begins. The Romanian Labour Inspectorate confirms these requirements in its official employment-contract guidance.

Operational indicators that may point towards employment include:

  • a manager determines the individual’s daily or weekly schedule;
  • attendance at a company location or continuous online availability is mandatory;
  • the individual receives detailed instructions about how work must be performed;
  • absences require permission rather than coordination of deliverables;
  • performance is managed through the same hierarchy and procedures used for employees;
  • the individual is presented internally or externally as a member of staff;
  • the role is personal and the individual cannot use collaborators or substitutes;
  • the individual bears little or no genuine commercial risk.

These are indicators, not an automatic checklist. The nature of the work, regulatory requirements, information security and customer obligations may justify some controls. The question is whether those controls preserve an independent business relationship or place the individual under employer-like authority.

When does the Fiscal Code recognise an independent activity?

Under Article 7 of the Fiscal Code, an activity performed by an individual for income is independent when at least four of seven statutory criteria are met. The evidence should show that those criteria operate in practice, not only that they were copied into the contract.

Fiscal Code criterionPractical evidence to examine
1. Freedom over place, method and scheduleThe provider plans performance independently and is not assigned employee attendance hours.
2. Freedom to work for several clientsThe contract permits other clients and the operational model does not make that freedom artificial.
3. Assumption of inherent business riskThe provider bears relevant costs, rectification duties or other genuine performance risks.
4. Use of the individual’s own assetsThe provider uses or arranges professional equipment, software, workspace or other business resources where appropriate.
5. Use of intellectual or physical capacityThe service depends on the provider’s own professional expertise or performance.
6. Membership of a regulated professional bodyThe activity is carried out within a legally regulated profession, where applicable.
7. Freedom to perform directly, with staff or collaboratorsThe provider may lawfully organise delivery personally or through employees or collaborators, subject to justified qualification and confidentiality requirements.
Statutory Rule

Romanian Fiscal Code Article 7: The 4-of-7 Independence Test

1 Autonomy Place, method & schedule 2 Multiple Clients Substantive freedom to serve 3 Commercial Risk Inherent business risk borne 4 Own Assets / Tools Equipment, premises, licenses 5 Capacity & Skill Own professional expertise 6 Professional Body Regulated trade or guild 7 Criterion 7: Delegation & Substitutes Lawful freedom to perform directly or via staff/collaborators MINIMUM 4 REQUIRED to satisfy Fiscal Code Art. 7
Figure 2: The 7 statutory criteria under Romanian Fiscal Code Art. 7. At least 4 must be satisfied and backed by operational proof.

Practical tip: Build a short evidence file for each material contractor relationship. Keep the agreement, scope of work, invoices, deliverable records and evidence of independent organisation together. A clause is stronger when the working record supports it.

Are four fiscal criteria enough to eliminate employment risk?

Not necessarily. The four-of-seven test defines independent activity for Romanian tax purposes, but it should not be treated as permission to reproduce an employment relationship through a services contract.

The tax and employment analyses overlap, particularly around control, business risk and operational autonomy, but they do not perform exactly the same function. The Labour Code focuses on work performed under employer authority. The Fiscal Code focuses on the conditions for independent activity and the correct tax treatment of economic substance.

Article 11 of the Fiscal Code allows the tax authorities to disregard a transaction without economic purpose or reclassify the form of a transaction or activity to reflect its economic content. The authority must explain the relevant facts and evidence supporting the reclassification. This makes consistent documentation important, but it also means that documentation must reflect reality.

European Union case law follows a similar substance-based approach for EU-law concepts of “worker”. In Yodel Delivery Network, Case C-692/19, the Court of Justice explained that an “independent contractor” label does not prevent worker classification where independence is merely notional. Relevant considerations included control over time, place and content of work, exposure to commercial risk, integration into the undertaking and freedom to use substitutes or serve third parties.

Which arrangements create the highest misclassification risk?

Fixed employee-style availability

The contractor must work the company’s standard hours, remain continuously available and obtain approval for any absence, regardless of deliverables.

Control over method, not only result

A company manager allocates daily tasks, prescribes the precise working method and continuously supervises the individual in the same way as employees.

Artificial freedom to serve other clients

The agreement permits other clients, but workload, exclusivity expectations or availability requirements make that freedom unrealistic.

No meaningful business risk

The individual receives a fixed recurring amount, bears no relevant costs or correction obligations and is paid regardless of the agreed output.

Full integration into the organisation

The contractor has an internal job title, reports through the employee hierarchy, appears in staff structures and is evaluated under employee procedures.

A recurring monthly fee, a long relationship, one important client or use of a customer system is not automatically decisive. Each fact must be assessed in context. Risk rises when several employee-like elements combine and genuine commercial independence becomes difficult to demonstrate.

What can happen after a misclassification finding?

A misclassification finding can open separate tax, employment, social-contribution and contractual questions. The precise exposure depends on who makes the finding, the period reviewed, the parties involved and the evidence.

Tax and social-contribution exposure

The tax authority may reassess the economic substance of the activity and determine the related tax and contribution consequences. Historic treatment, payment records, filings and the allocation of responsibility between the parties must be reviewed before quantifying any exposure.

Employment rights and claims

An individual may argue that the factual relationship was employment and seek rights associated with employee status. Questions may arise concerning remuneration, working time, leave, termination, employee records and other mandatory protections. The outcome depends on the legal route and the evidence, not on the contract title alone.

Inspection and document risk

Where work has in substance been performed as employment without the required employment formalities, the company may face labour-inspection consequences. Specific sanctions should be assessed against the law in force and the facts at the date of the review.

Commercial and transaction risk

Misclassification can affect due diligence, financing, investment or an acquisition. A buyer may ask for the contractor population, templates, tax treatment, intellectual-property arrangements and potential historic liabilities to be reviewed before closing.

Intellectual property and confidentiality

The company should not assume that an employment-style intellectual-property position automatically applies to an independent provider. Ownership, assignment, permitted use, confidentiality and return or deletion of information should be dealt with expressly and consistently with the actual relationship.

Does contracting through a PFA or an SRL remove the risk?

No business form provides an automatic safe harbour. It may change the contractual and tax analysis, but the parties should still examine who performs the service, how the relationship operates and whether the structure has genuine commercial substance.

A Romanian authorised individual enterprise, commonly referred to as a PFA, is closely connected to the individual providing the activity. An SRL is a separate legal entity, which may employ staff, assume business risks and organise delivery through its own resources. Those differences matter, but neither registration document should replace a factual review.

If the supplier structure is still being established, the practical differences should also be considered alongside our guidance on company formation in Romania for foreign founders.

For an SRL supplier, examine whether the supplier is genuinely providing a business service or whether one individual is effectively inserted into the customer’s organisation under continuous personal control. For a PFA, test the statutory independence criteria directly and retain evidence supporting them.

Foreign companies should also avoid importing assumptions from their home jurisdiction. A worker physically performing activity in Romania may trigger Romanian employment, tax, social-security, registration or permanent-establishment questions. Those cross-border issues require a separate review based on the company, worker, location and duration of the arrangement.

Related structures may require a different analysis. Our guide to dual employment in Romania explains the rules applicable when an individual holds more than one employment contract, while the guide to service contract requirements in Romania covers the clauses and compliance points relevant to genuine service relationships.

Three illustrative classification scenarios

Scenario 1: project-based software specialist

A specialist agrees to deliver defined software modules, chooses the working schedule and location, uses their own business equipment, serves several clients and may use qualified collaborators. The customer controls security standards, acceptance criteria and deadlines but not the specialist’s daily organisation.

Assessment: These facts support independence, subject to the complete contract, tax position and actual implementation.

Scenario 2: “consultant” managed as staff

An individual works from 09:00 to 18:00, reports daily to a department manager, needs approval for time off, uses only company equipment, appears on the internal organisation chart and cannot accept other clients.

Assessment: The contractor label is difficult to reconcile with the operational indicators of subordination and workforce integration.

Scenario 3: regulated client environment

An external professional must work through the customer’s secure system and attend specific meetings because of regulatory and information-security requirements. The professional otherwise decides how to perform the mandate, bears professional risk and maintains other clients.

Assessment: Use of customer systems and scheduled coordination do not decide the issue alone. The purpose and extent of control must be examined.

These scenarios are illustrative. Changing one fact, such as exclusivity, substitution rights, commercial risk or management control, may change the conclusion.

How should a foreign company structure a genuine contractor relationship?

  1. Define the result. Describe services, deliverables, acceptance criteria and deadlines instead of creating an employee job description.
  2. Preserve operational autonomy. Allow the provider meaningful control over place, schedule and method, subject to justified security and coordination requirements.
  3. Address other clients. Avoid broad exclusivity unless a narrow restriction is genuinely necessary and legally supportable.
  4. Allocate business risk. Specify responsibility for costs, tools, corrections, professional organisation and non-conforming deliverables.
  5. Review substitution and collaboration. Permit lawful use of qualified personnel or collaborators where compatible with the service, confidentiality and regulatory requirements.
  6. Separate contractors from HR procedures. Do not automatically apply employee leave approval, performance management, benefits or disciplinary systems.
  7. Protect data, confidentiality and IP. Draft clauses that fit an independent services relationship and the actual information or assets involved.
  8. Keep evidence. Retain statements of work, invoices, deliverables and communications showing independent organisation.
  9. Reassess material changes. Review the classification when the scope, reporting line, exclusivity, workload or duration changes.

How can a company audit its existing Romanian contractors?

Audit Roadmap

7-Step Romanian Contractor Classification Audit

1 Inventory All PFA/SRL 2 Fact Map Daily routine 3 Fiscal Test 4-of-7 check 4 Labour Test Authority check 5 Risk Scan IP & Tax PE 6 Classify Risk tiers 7 Remediate Lawful fix Remediation must be prospective; avoid backdating documents or creating artificial records.
Figure 3: Corporate audit roadmap for evaluating contractor populations in Romania.
  1. Inventory every arrangement. Identify individuals engaged directly, through a PFA, through a personal SRL or through an intermediary.
  2. Map the facts. Record schedule, location, reporting, tools, clients, payment model, risk, substitution and integration.
  3. Test the seven fiscal criteria. Identify which criteria are genuinely met and what evidence supports each conclusion.
  4. Test employment subordination. Compare management practices against the Labour Code concept of work under employer authority.
  5. Check connected risks. Review tax, social security, immigration, permanent establishment, IP, confidentiality and data protection where relevant.
  6. Classify by risk. Separate clearly independent providers, fact-sensitive cases and arrangements that operate like employment.
  7. Implement a lawful correction plan. Amend terms and practices where the relationship remains genuinely independent, or move to an appropriate employment structure where the facts require it.

Risk: Do not “repair” the file by backdating documents or creating evidence that did not exist. Remediation should accurately record the current position and lawfully correct the arrangement going forward, while historic exposure is assessed separately.

The Bottom Line

The employee-versus-contractor decision must be made from the work model, not from the preferred invoice or contract label. Genuine contractors organise an independent activity, retain meaningful autonomy and assume real business responsibility. Employees perform work within the employer’s authority and receive the mandatory protections attached to that status.

For foreign companies, the safest starting point is a combined contract and operations review before the individual begins work. The same review should be repeated whenever the role becomes more integrated, exclusive or manager-controlled.

Frequently asked questions

Can a Romanian contractor work for only one client?

One client does not automatically create employment, but it weakens one of the express indicators of independent activity and may increase economic dependence. The full relationship must still be assessed, including control over schedule and method, commercial risk, tools, substitution rights and whether the contractor is integrated into the client’s organisation.

Is a monthly fixed fee evidence of employment?

Not by itself. A genuine provider may charge a monthly retainer or recurring service fee. Risk increases where the payment resembles a salary and is combined with fixed attendance, continuous personal availability, direct supervision, no deliverable risk and treatment identical to employees.

Can a foreign company hire a Romanian individual as a contractor?

Potentially, but the company should confirm that the activity is genuinely independent and that the contractor has an appropriate legal and tax setup. The arrangement may also raise Romanian tax, social-security, employment, registration or permanent-establishment questions depending on the company, work location and duration.

Does an SRL invoice eliminate misclassification risk?

No. An SRL is a separate legal entity and that distinction matters, but the customer should still examine whether it receives an independently organised business service or manages one individual as part of its workforce. Contracting structure, economic substance and daily practice must be assessed together.

Should the agreement use Romanian law?

The applicable law depends on the parties and cross-border structure. A foreign governing-law clause cannot necessarily remove mandatory rules relevant to work performed in Romania. The governing law, jurisdiction, tax position and mandatory employment protections should be reviewed together before using a foreign template.

When should an existing contractor arrangement be reviewed?

Review it when the contractor becomes exclusive, moves into a managerial reporting line, adopts employee working hours, receives company benefits, stops using independent resources or shifts from project delivery to an ongoing internal role. A periodic review is also appropriate for material or long-running engagements.

Disclaimer: This article provides general legal information and does not constitute legal or tax advice. Classification depends on the contract, the actual working relationship, the parties’ tax status and the applicable Romanian and EU rules.

AI Notice: AI-assisted content, reviewed by a qualified Romanian lawyer.

Workplace Investigations in Romania: Employer Guide

Employment compliance · Romania

Workplace Investigations in Romania: Employer Guide

A workplace investigation should separate what happened, whether a workplace rule was breached and what response is proportionate. Treating an allegation as established misconduct, or sanctioning an employee before giving a genuine opportunity to respond, can undermine an otherwise legitimate employment decision.

This guide is for Romanian employers, foreign-owned companies, HR teams and managers handling complaints, misconduct allegations, harassment concerns or possible disciplinary action. The correct procedure depends on the facts, internal documents, evidence and current Romanian employment law.

Core rule: a complaint is an allegation, not a finding. A fact-finding review, grievance investigation and disciplinary investigation are not automatically the same process. When the employer considers a disciplinary sanction other than a written warning, Article 251 of the Labour Code generally requires a prior disciplinary investigation and a genuine opportunity for the employee to defend themselves.

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Disciplinary procedure in Romania: the legal steps employers should follow when investigating misconduct and considering a sanction.

What is a workplace investigation in Romania?

A workplace investigation is a structured process for establishing facts relevant to an employment decision. It may concern alleged misconduct, harassment, discrimination, retaliation, conflicts of interest, misuse of company systems, confidentiality breaches or safety incidents.

The employer should define the investigation’s mandate before collecting evidence. The mandate should identify the concern, persons involved, relevant period, immediate risks and question the investigation must answer. It should not begin with a predetermined sanction or assume that the complainant’s version is already proven.

Fact-finding

Establish what happened, which records exist, who can provide relevant information and whether immediate safeguards are needed.

Disciplinary route

Use the Article 251 procedure when the employer is considering a disciplinary sanction other than a written warning.

Proportionate response

Separate the finding from the remedy and assess the employee’s fault, consequences, conduct and previous sanctions.

Important: the investigation should identify both incriminating and exculpatory evidence. A file that collects only material supporting the initial allegation may be vulnerable even if the underlying concern was genuine.

What process should an employer follow?

The process should be adapted to the allegation. An initial complaint may require a fact-finding review, grievance procedure, safeguarding response or a specialised investigation. If the employer moves toward a disciplinary sanction, the statutory disciplinary safeguards must be added before the decision is made.

Where the allegation concerns workplace harassment, violence or discrimination, the employer should also verify any specific obligations arising under applicable anti-harassment and equal-treatment legislation and internal procedures.

Select a stage to see its legal and operational purpose.

Intake and scope

Record the allegation, persons involved, date, immediate risks and question the investigation must answer. Do not begin with a predetermined sanction.

SituationLikely routeKey safeguardRisk if mishandled
Initial complaint or concernFact-finding, grievance or safeguarding review.Define scope and preserve neutrality.A complaint is treated as proof before the facts are tested.
Possible disciplinary misconductArticle 251 disciplinary investigation.Written summons and genuine opportunity to defend.Sanction may be challenged for procedural failure.
Written warning onlyStatutory exception may apply.Confirm that the measure is truly a written warning.An incorrectly classified sanction may require the full procedure.
Harassment, discrimination or retaliationSpecialised investigation plus employment-law analysis.Protect complainants, witnesses and confidential data.Retaliation, privacy or discrimination exposure may increase.

When is a formal disciplinary investigation mandatory?

Article 251 generally requires a prior disciplinary investigation before any sanction other than a written warning. This applies when the employer is considering a demotion, suspension, disciplinary dismissal or another statutory disciplinary sanction. A management conversation, informal warning or internal email cannot safely replace the procedure where the contemplated measure is disciplinary and falls outside the written-warning exception.

The employer should identify the applicable workplace rule, the alleged act or omission, the decision-maker and the person responsible for the investigation. As a matter of good practice, the investigator should be sufficiently independent from the allegation and should disclose any conflict of interest. The file should show that the employee was given a real opportunity to respond, not only that a meeting was placed on the calendar.

If the employer concludes that the matter is not disciplinary, the reason should still be documented. A grievance or fact-finding process may lead to organisational measures, training, policy changes or protection for affected persons. It should not be used as a disguised disciplinary process that deprives the employee of Article 251 safeguards.

What are the employee’s rights during the investigation?

The employee should know the subject of the investigation and receive a written summons stating the subject, date, time and place. Under Article 251, the employee may formulate and support defences and offer the evidence and reasons they consider necessary. At the employee’s request, they may be assisted by an external labour-law consultant or by a representative of the trade union of which they are a member, in accordance with the Labour Code in force at the time of the investigation. The summons should be sufficiently clear for the employee to understand the allegation and prepare a meaningful response.

The employer should allow the employee to provide explanations and propose or submit evidence relevant to the allegation. The investigator should consider that material and record why it is accepted, rejected or considered immaterial. A refusal to answer a question is not automatically proof of misconduct, and an employee’s absence does not prove the allegation.

If the employee does not attend without an objective reason after a lawful summons, the employer may continue under the statutory conditions. The file should preserve the summons, proof of delivery, any explanation for non-attendance and the decision to continue. The employer should not use the absence to bypass the duty to assess the available evidence fairly.

Clear summons

State the subject, date, time and place, allowing the employee to understand and prepare for the hearing.

Real defence

Allow explanations, relevant evidence and assistance by a labour-law consultant or permitted trade-union representative at the employee’s request.

Complete record

Keep proof of delivery, attendance, submissions, questions, answers and the reasoning used in the final decision.

How should evidence and confidentiality be handled?

Evidence should be relevant to the defined allegation and obtained through authorised, lawful and proportionate channels. Employers should identify who may access HR files, whether monitoring policies were communicated, how records are retained and whether access can be limited to the investigation team.

Digital evidence may include emails, access logs, system records, messages, time records or video material, but its availability does not automatically make its use lawful or decisive. The employer should consider purpose, necessity, proportionality, notice, access controls, the privacy interests of employees and third parties, and whether monitoring measures were previously implemented and communicated in accordance with applicable employment and data-protection requirements.

The GDPR does not prevent a workplace investigation, but it requires a lawful, fair and proportionate approach. Health data, recordings, allegations of harassment and messages involving third parties require particular care. The employer should avoid distributing the file more widely than necessary and should communicate findings only to persons with a legitimate role.

Select an evidence category to review the main safeguard.

Policies and rules

Keep the internal regulation, policy, job description or lawful instruction that allegedly applies, together with evidence that the employee could access it.

How is a disciplinary sanction chosen?

Article 250 requires an individualised proportionality assessment. The employer should consider the circumstances of the act, the employee’s degree of fault, the consequences, general conduct and previous disciplinary sanctions. The same rule breach may justify different responses depending on intent, repetition, actual harm, training and whether the rule was clear and accessible.

The reasoning should connect the evidence to the finding and the finding to the sanction. A written decision that simply repeats the allegation without explaining the defence, fault and proportionality may be difficult to defend. The employer should also distinguish a disciplinary sanction from a performance-management measure, redundancy, professional inadequacy or a business reorganisation.

Disciplinary fines are prohibited. An employer should not disguise a fine as an unlawful salary deduction or informal penalty. Any financial measure must be assessed separately under the applicable employment and payroll rules. The written decision should explain the legal basis, factual conduct, sanction and challenge information required by law.

Select each control before communicating a sanction.

Scope and authority

Confirm the legal route, applicable rule, decision-maker and investigator. Check for conflicts of interest before the process moves forward.

When can disciplinary dismissal be used?

Disciplinary dismissal under Article 61(a) is reserved for serious misconduct or repeated breaches of workplace discipline. It requires the prior disciplinary investigation and a written, reasoned decision complying with the applicable Labour Code requirements. There is no universal rule that a lesser sanction must always be issued first, but the seriousness and proportionality of dismissal must be demonstrable on the facts.

The employer should not use disciplinary dismissal to solve a redundancy, professional-inadequacy or performance-management problem that belongs to a different legal route. The legal ground determines the evidence, procedure, decision and risks. Re-labelling a business or performance issue as misconduct can make the decision vulnerable.

Before dismissal, the employer should test whether the internal rule was valid and accessible, whether the employee’s conduct is established, whether the employee’s explanations were considered, whether lesser measures were relevant and whether the sanction is proportionate to the actual harm and circumstances.

What deadlines and decision content apply?

The disciplinary sanction decision must ordinarily be issued within 30 calendar days from the date on which the competent employer representative is considered to have become aware of the misconduct and no later than six months from the act. It must be communicated within five calendar days of issue. The employer should preserve proof of awareness, issuance and communication because a disagreement about dates can become central in litigation.

Decision elementWhat it should addressWhy it mattersControl before issue
Factual descriptionThe act or omission, with enough detail to identify the allegation.Prevents an unclear or post-hoc case.Match the description to the evidence and hearing subject.
Breached ruleInternal regulation, contract, statute or lawful instruction.Connects the conduct to a binding obligation.Show that the rule existed and was accessible.
Defence analysisWhy the employee’s explanations and evidence were accepted or rejected.Shows that the hearing was genuine.Address material submissions specifically.
Legal basis and remedyApplicable Labour Code provision, challenge period and competent court.Supports informed challenge and judicial review.Use the current statutory wording and verify communication.

Deadlines and content should be checked against the current Labour Code and the specific facts. The employer should not rely on a generic template that omits the allegation, defence analysis, legal basis, sanction or challenge information required for the decision.

Common employer errors

Starting with a conclusion

The investigator collects only incriminating material and treats the complaint as an established fact.

Using a generic summons

The employee cannot understand the subject of the hearing or prepare a meaningful defence.

Missing dates

The employer cannot prove awareness, issuance or communication within the applicable statutory period.

Other recurring problems include denying reasonable preparation time without recording a reason, ignoring the employee’s written defence, imposing a disciplinary fine or unlawful salary deduction, confusing performance management with misconduct and allowing a conflicted investigator to control the file.

Employers should also avoid broad circulation of allegations, informal promises about the outcome, deletion of relevant records, retaliatory treatment of complainants or witnesses and changes to the accusation after the hearing without giving the employee a fair opportunity to respond.

Practical checklist for Romanian employers

  • Define the allegation, scope, persons involved and immediate risks.
  • Identify whether the matter is fact-finding, grievance, safeguarding or disciplinary.
  • Preserve relevant evidence through authorised and proportionate channels.
  • Appoint an impartial investigator and record the mandate and any conflict check.
  • Identify the internal rule, contract term, policy or lawful instruction involved.
  • Summon the employee in writing with the subject, date, time and place.
  • Allow explanations, relevant evidence and permitted assistance.
  • Assess both incriminating and exculpatory material and record the reasoning.
  • Apply the Article 250 proportionality factors before choosing a sanction.
  • Check that dismissal, if contemplated, uses the correct legal ground.
  • Issue and communicate a complete written decision within the statutory deadlines.
  • Restrict access to the file and retain evidence of delivery and communication.

Frequently asked questions

Does every workplace complaint require a disciplinary investigation?

No. An initial complaint may require fact-finding, a grievance review or a safeguarding investigation. Article 251 becomes central when the employer considers a disciplinary sanction other than a written warning.

Can an employee refuse to attend the disciplinary hearing?

The employee should attend or explain an objective reason for absence. After a lawful written summons, an unjustified absence may allow the employer to continue under Article 251, but the absence is not itself proof of misconduct.

Can an employer use emails and access logs as evidence?

Potentially, if the material is relevant, lawfully obtained, proportionate and handled with appropriate confidentiality. Monitoring policies, access controls and data-protection safeguards should be checked before relying on digital evidence.

Is disciplinary dismissal possible without a previous warning?

Yes, Romanian law does not impose a universal requirement to issue a lesser sanction first. However, the misconduct must justify dismissal on the facts, the Article 251 investigation must be completed and the sanction must be proportionate.

What is the deadline for issuing a disciplinary sanction?

The decision is ordinarily issued within 30 calendar days from the employer’s awareness of the misconduct and no later than six months from the act. It must be communicated within five calendar days of issue.

What makes a workplace investigation defensible?

A clear scope, impartial handling, relevant and lawfully obtained evidence, a genuine opportunity for the employee to respond, proportionality analysis and a complete written decision supported by proof of communication.

Need advice before a workplace decision?

A focused review before a summons, sanction or dismissal can identify missing evidence, procedural risks and the correct employment-law route.

Book a consultation

Disclaimer: This article provides general information only and does not constitute legal advice or the creation of a lawyer-client relationship. The applicable procedure depends on the facts, employee category, internal documents, evidence and current legislation. Obtain a case-specific assessment before starting an investigation or issuing a sanction.

AI Notice: AI-assisted content, reviewed by a qualified Romanian lawyer.

Featured image illustrating dual employment in Romania, showing a professional working two jobs with symbols for legal rights, taxation, and employment rules.

Dual Employment in Romania: Legal & Tax Rules Explained

Employment law and payroll compliance · Romania

Dual Employment in Romania: Legal & Tax Rules Explained

Romanian employees may hold more than one employment relationship, but the practical analysis is not limited to asking whether a second contract is legal. Employers and employees should review overlapping schedules, rest, conflicts of interest, confidentiality, payroll treatment, the designated base function and any sector-specific incompatibility.

This guide is for employees, Romanian employers, foreign companies hiring in Romania and HR or payroll teams managing multiple employment contracts. Fiscal treatment and working-time compliance can change with the facts and current rules.

Play
Video guide: the main legal, working-time and tax questions raised by dual employment in Romania.

Short answer: Article 35 of the Romanian Labour Code protects the employee’s right to work for different employers or to conclude more than one employment contract, subject to the applicable legal conditions. A second job is not, by itself, misconduct. The contracts must nevertheless be administered separately, schedules should not overlap, mandatory rest and health-and-safety protections must be respected, and valid incompatibilities or conflicts of interest must be addressed.

What is dual employment in Romania?

Dual employment, also called cumul de funcții, usually means that a person has two or more individual employment contracts at the same time. The contracts may be with different employers or, under the applicable conditions, with the same employer.

Each contract creates a separate employment relationship. Salary, duties, leave, performance expectations, disciplinary responsibility and termination are normally assessed by reference to the relevant contract and employer. This does not mean that the contracts exist in complete isolation. Working-time, rest, fatigue, health and safety, confidentiality, conflict-of-interest and fiscal questions may require a wider review.

The label used by the parties is not decisive. An employee who performs work under a second employment contract is not automatically an independent contractor, consultant or freelancer. Conversely, a person who has a company, PFA or other business activity does not automatically have a second employment contract. The documents and the actual work relationship must be examined.

Two employers

Separate employment contracts with separate employers. Each employer administers its own contract, while the employee must avoid schedule conflicts and protect confidential information.

One employer

More than one contract with the same employer requires careful review of distinct duties, schedules, rest, working-time records and the applicable legal limits.

Employment plus business

An employment contract combined with PFA, company or freelance activity raises a different classification and tax analysis.

Is a second job legal?

As a general principle, yes. Article 35 of the Labour Code recognises the freedom to work for different employers or to work for the same employer under more than one contract, while respecting the applicable legal conditions. A Romanian employer should not impose a blanket prohibition on any other paid work merely because the employee has chosen to take a second job.

That principle is not unlimited. The employee must comply with the duties of loyalty, good faith, confidentiality and professional discipline. A second job may also be restricted by a statutory incompatibility, a regulated profession, a public-sector rule, a valid conflict-of-interest control or the practical impossibility of performing both contracts without overlapping schedules or unacceptable fatigue risks.

A contractual clause that says “the employee may not perform any other activity” should be read carefully. It may be ineffective if it goes beyond a legitimate protection of confidential information, competition, working time or a specific incompatibility. The employer should identify the actual protected interest rather than rely on a general prohibition.

Select the fact that usually determines the first legal question.

Right to work

Begin with the employee’s statutory freedom to work under more than one contract, then test the schedules, rest, conflicts and any special rule.

How should employers review two employment contracts?

The safest process begins with the actual arrangement. The employer should know the duties, schedule, place of work, reporting line and expected availability under its own contract. It should not demand irrelevant details about the employee’s private life, but it may need information necessary to prevent a schedule conflict, protect confidential information, assess health and safety or comply with a fiscal or statutory requirement.

Where the employee has different employers, one employer may not have a complete view of the other contract. The employee should therefore communicate enough information to make the working arrangement possible without disclosing unnecessary confidential details. A written declaration or schedule confirmation may be useful, but it should not be used as a disguised waiver of mandatory rights.

For contracts with the same employer, the employer has greater visibility and should verify that the duties are genuine and distinct, working hours are recorded correctly, and the structure is not being used to evade overtime, rest, minimum-wage or other employment obligations.

QuestionDifferent employersSame employerPractical control
Are the contracts separate?Yes, each employer administers its own contract.Yes, but the employer sees both relationships.Keep duties, schedules and payroll records identifiable.
Can schedules overlap?They should not overlap in practice.They should not overlap and must reflect genuine work.Compare planned and actual working hours.
Is consent for the second job generally required?Not as a general rule, subject to legal or contractual safeguards.The employer must agree to the contractual structure and work performed.Check incompatibilities, confidentiality and conflicts.
Who handles payroll?Each employer handles its own contract and reporting.The same employer must keep the relationships distinct in records.Coordinate payroll without treating contracts as one salary.

Working time, rest and health and safety

Working-time compliance is the most sensitive operational issue. The employee should not be scheduled to work under two contracts at the same time. The employer should also assess daily and weekly rest, the actual work pattern, overtime, night work, commuting, fatigue and the nature of the job.

The 48-hour weekly limit, including overtime, should not be presented as a simple permission to work two full-time jobs. The legal analysis may depend on the employer structure, the applicable interpretation of national and EU law, the way hours are organised and the health-and-safety consequences. Where the employers are separate, one employer may not be able to calculate the employee’s complete working time without information from the employee. That difficulty is a reason for a careful review, not a guarantee that every schedule is lawful.

Where several contracts exist with the same employer, cumulative working time and rest are especially important. The employer should not use separate payroll entries to conceal a schedule that effectively exceeds the rules applicable to the employee. The records should show when work begins and ends under each relationship and how breaks and rest are protected.

For safety-sensitive work, driving, healthcare, industrial activity, night work or roles involving significant responsibility, fatigue can create direct risks to the employee, colleagues and third parties. An employer may therefore need a proportionate risk assessment and a focused conversation with the employee without turning the existence of a second job into automatic grounds for discipline.

Select the control that should be documented first.

No overlap

Start by comparing the actual schedules. A contract structure cannot make simultaneous work for two employers lawful.

Salary, leave and employment records

Each employment contract normally generates its own salary entitlement and employment records. One employer should not reduce the salary agreed under its contract because the employee earns income elsewhere. Payroll, deductions, leave, sick leave and other rights should be administered according to the relevant contract and the applicable rules.

Annual leave is connected to each employment relationship, but the employee must be able to take leave and rest in a way that works across the contracts. An employee who is on leave from one employer may still be working for another only if that arrangement is compatible with the purpose and legal conditions of the leave. Sick leave and medical restrictions require particular care and should not be treated as a simple scheduling issue.

All employment contracts and reportable changes should be correctly transmitted in the current employee registry system. Employees should be able to verify the contracts and registered data. Employers should avoid informal work outside the registered contract, including “trial” work performed under a second arrangement without the required documentation.

What is the base function?

The base function, or funcția de bază, is primarily a fiscal and payroll designation. It identifies the employment relationship at which the employee claims the applicable personal deduction and certain benefits or tax treatment under the current fiscal rules. It does not make that contract the only legally important job and does not give the base-function employer a general power to control every other employment relationship.

The employee should designate the base function with the appropriate employer and should not claim the same fiscal benefit twice. The employer should request only the information needed for payroll and should check the current fiscal documentation rather than rely on an old checklist. If the employee changes the base function, payroll should be updated from the legally relevant period.

Meal tickets, deductions, benefits and contribution calculations should be verified under the rules in force at the time. They should not be explained through an absolute statement that one employer always controls every benefit. The result may depend on the type of benefit, the days worked, the contract and the applicable fiscal provisions.

Part-time contracts and social contributions

Multiple employment contracts often include part-time work, which can create additional payroll questions. A part-time salary below the national minimum wage does not automatically mean that the employee or employer has done anything unlawful. The fiscal rules may require social contributions to be calculated by reference to a minimum threshold unless an applicable exception or evidence-based condition is met.

The treatment can depend on the employee’s total income, other contracts, age, studies, disability, pension status, the type of contract and the documentation submitted to the employer. The employer should check the current Fiscal Code, implementing rules and monthly payroll instructions before applying a top-up or an exemption.

Employees should provide accurate declarations and supporting evidence within the required period. Employers should keep the evidence and apply the rule consistently. An old article that states one fixed gross minimum wage, one universal deadline or one automatic exemption list can become misleading as soon as the fiscal framework changes.

Payroll safeguard: do not calculate the tax treatment of a part-time contract from the existence of a second job alone. Confirm the current threshold, the employee’s relevant category, the documents submitted and the month to which the calculation relates.

Loyalty, confidentiality and conflicts of interest

A second job does not suspend the employee’s duty to protect confidential information. The employee should not transfer customer lists, pricing, source code, legal advice, internal policies, passwords or business plans from one employer to another. The employer should define confidential information in a way that protects a legitimate interest without attempting to classify every fact about the employee as secret.

Conflict-of-interest controls should be specific. The employer may need to know whether the second employer is a competitor, supplier, customer, regulated entity or party in a matter handled by the employee. The response may be disclosure, restricted access, recusal, a change of duties or another proportionate measure. A general ban on all outside work is usually less precise than identifying the conflict that must be managed.

Non-compete clauses are governed by their own statutory conditions and should not be confused with a general prohibition on dual employment during the employment relationship. A clause that is unpaid, unlimited or unrelated to a legitimate protected interest may be difficult to enforce.

Sector-specific incompatibilities

Some roles require a separate review. Public officials, civil servants, regulated professionals, medical staff, lawyers, company directors and employees in sectors with special working-time or integrity rules may be subject to incompatibilities that do not apply to an ordinary private-sector employee.

The fact that an activity is performed outside the normal schedule does not automatically solve an incompatibility. The employer should identify the specific statute, professional rule, public-integrity provision, licence condition or internal rule that applies. This is particularly important where the employee exercises public authority, controls public funds, performs safety-sensitive work or owes duties to multiple regulated entities.

Company administrators and directors also require a corporate-law analysis. Whether a person may hold an employment contract with a company they manage depends on the company type, role, appointment, actual duties and the current Companies Law. Do not rely on a universal statement that every administrator may or may not be employed by the same company.

Practical employer checklist

  • Confirm the employee’s role, schedule, place of work and expected availability under your contract.
  • Check whether any statutory incompatibility, regulated profession rule or conflict of interest applies.
  • Do not impose a blanket prohibition on a second job without identifying a lawful and proportionate reason.
  • Make sure the employee cannot be scheduled to work simultaneously under two contracts.
  • Assess rest, overtime, night work, fatigue and health-and-safety risks based on the actual pattern.
  • Keep each contract, salary, leave record and registry entry separately identifiable.
  • Protect confidential information through precise access and conflict controls.
  • Ask for only the information necessary to administer payroll and compliance.
  • Check the current Fiscal Code rules for part-time contributions and the base function.
  • Review the arrangement when the role, schedule, employer, customer or sector changes.

Frequently asked questions

Is dual employment legal in Romania?

Generally, yes. Article 35 of the Labour Code protects the right to work under more than one employment contract, subject to schedule, rest, incompatibility, conflict-of-interest and other applicable conditions.

Can an employer forbid an employee from having a second job?

Not as a blanket rule merely because the employee wants to work elsewhere. A restriction may be justified by a specific statutory incompatibility, genuine conflict of interest, confidentiality concern, competition issue or another lawful and proportionate reason.

Can two employment schedules overlap?

No. The employee should not be required or permitted to perform work simultaneously under two contracts. The employer should compare the actual schedules and document any relevant availability or change.

Does the 48-hour rule automatically allow two full-time contracts?

No. The 48-hour rule should not be treated as a general permission for two full-time jobs. Working time, rest, overtime, fatigue and health-and-safety compliance require a fact-specific assessment.

What does the base function mean?

The base function is a fiscal and payroll designation, not a general labour-law hierarchy. It is used for the applicable tax treatment and must be designated and administered according to the current fiscal rules.

Can dual employment affect part-time contributions?

It can. The treatment depends on current fiscal rules, the employee’s total income, contract type, status and the evidence submitted to the employer. Payroll should be checked for the relevant month rather than calculated from a generic rule.

Need to review multiple employment contracts?

A Romanian employment lawyer can assess schedules, payroll treatment, confidentiality, conflicts of interest and sector-specific restrictions before the arrangement creates risk.

Book a consultation

Disclaimer: This article provides general information only and does not constitute legal advice or the creation of a lawyer-client relationship. Dual employment depends on the contracts, actual schedules, employee status, sector, fiscal rules and current Romanian law. Obtain a case-specific assessment before imposing a restriction or changing the employment arrangement.

AI Notice: AI-assisted content, reviewed by a qualified Romanian lawyer.