Romania: Measures to stimulate employment growth in the context of Covid-19

Government Emergency Ordinance no. 132/2020 on support measures for employees and employers in the context of the epidemiological situation caused by the spread of the SARS-CoV-2-virus and to stimulate employment growth (“GEO no. 132/2020”), was published in the Official Gazette of Romania, Part I, no. 720 of 10 August 2020.

GEO no. 132/2020 is intended to create the necessary legal framework to support the labour market.

I. Short-time work

Employers have the option of reducing their employees’ working hours by a maximum of 50% if their business operations experience a temporary slowdown caused by a state of alert, emergency or siege. Before exercising this option, an employer must inform and consult the union/the employees' representatives or the employees, as the case may be, in advance.

Short-time work (“Kurzarbeit”), adopted by means of GEO no. 132/2020, is an economic model launched by Germany that may be adopted by employers that fulfil all of the following conditions:

• The measure affects at least 10% of the employees of the business unit;
• Proof of the slowdown is a decrease of at least 10% in turnover for the month prior to implementation of the measure, or the month before the month preceding it, compared to the same month in the previous year.

The reduction of working hours is established by a decision of the employer for a period of at least five consecutive working days, and the employer must establish the work schedule for the entire month.

During this period, each employee receives an allowance of 75% of the difference between the gross basic salary provided in his/her employment agreement and the gross basic salary related to the hours actually worked as a result of the reduction of working hours, in addition to the salary earned for the actual time worked. The allowance is borne by the employer and may be refunded by the government. 

II. Hiring for a determined period

Until 31 December 2020, the government will ensure payment of 41.5% of the salary of employees hired for eight-hour days for up to three months as set by an employer. This salary is capped at the national average gross salary (LEI 5,429, i.e. approx. €1,120). The employer pays the salary in full and then submits to the National Agency for Employment an application signed and dated by its legal representative and accompanied by an affidavit and the list of employees for whom payment of the 41.5% is requested. 

III. Teleworking

The government provides a onetime financial allowance of RON 2,500 (approx. €500) per teleworker to acquire the IT equipment needed for remote work.

Until 31 December 2020 or until the funds allocated for this purpose are exhausted, the allowance will be granted, in the order in which applications are submitted, to employers for employees who work under the teleworking regime during the state of emergency for at least 15 working days.

The procedure for granting the allowances and the categories of goods that can be purchased will be established by order of the Minister of Labour and Social Protection.

Employers must send supporting documents regarding the acquisition of the categories of goods established by order of the Minister of Labour and Social Protection to the National Agency for Employment by 30 days after the allowance has been granted.

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The provisions of this emergency ordinance do not apply to the following categories of employers:

• Public institutions as defined by Law no. 500/2002 on public finances, with subsequent amendments and supplements, as well as by Law no. 273/2006 on local public finances, with subsequent amendments and supplements;
• Employers who are in bankruptcy, dissolution or liquidation or whose business operations have been suspended by law;
• Employers who are registered for tax purposes in jurisdictions that are not cooperating in granting the allowance.

The Government must issue a resolution regulating the procedure and documentation required to apply for the above-mentioned benefits by 30 days after the publication of this emergency ordinance.