Labour inclusion in Romania

Overview

Romania is divided into eight administrative regions; each region has certain specific features with regard to its economic structure, which is why certain sectors play an important role in the development of each region. At the end of March 2020, the rate of registered unemployment determined by the National Employment Agency (ANOFM) was 2.9%, corresponding to 250.900 registered unemployed persons. 

Overall, Romania continues to be a country of emigration, with approximately 5.6 million nationals living abroad in 2019. Starting 2018, a new migration trend is emerging across the country. The evolution of the economy and the negative demographic trends recorded in Romania have led to a severe labour shortage that has intensified in the past couple of years. According to the UN World Population Prospects (2017), Romania is expected to see its population shrink by 17% between 2017 and 2050 to a projected 16.3 million. Therefore, labour migration to Romania is expected to become increasingly important. Certain sectors (e.g. hospitality, constructions) and geographic areas are more exposed, resulting in growing pressure from the private sector on the Government to increase the number of work permits issued for TCNs. As such, the Romanian Government responded by increasing the annual contingent of non-EU workers from 5.000 persons in 2016 to 30.000 in 2020. In 2021 the annual contingent is of 25.000 persons. In fact, the increase of migrant population in 2019 and 2020 – despite the Covid-19 pandemic – was mainly linked to the shortages existing on the labour market. This was addressed by attracting third country workers especially in the construction and services sectors. Therefore, the work permits issued by the GII increased by approx. 20% in 2019, respective approx. 18% in 2021 compared to 2018.  

As per the applicable legislation in Romania, as TCN you have access to the labour market:

• if you hold a long-term right of residence in Romania;
• if you are the holder of a right of temporary residence for the reunification of the family as a family member of a Romanian citizen;
• if you hold a right of temporary residence for studies (only with an individual part-time employment contract with a maximum working time of 4 hours per day);
• if Romania has concluded treaties with other states in which labor issues are regulated;
• for didactic, scientific activities or other categories of specific activities with temporary character in accredited or provisionally authorized profile institutions in Romania;
• for temporary activities requested by the Minister or other institutions of the central or local public administrations or by autonomous administrative authorities;
• if you are appointed to manage a subsidiary, representative office or branch in Romania of a company that is headquartered abroad, in accordance with the necessary acts of Romanian legislation that prove this;
• if you are the holder of a right of temporary residence granted to victims of crime (victim of trafficking in human beings or migrants);
• if you have previously enjoyed a right of residence in Romania for at least 3 years, as a family member of a Romanian citizen and you are in one of the following situations:
  • was pronounced dissolved for marriage;
  • the partnership ended;
  • the sponsor/Romanian citizen died;
  • you have reached the age of majority or you have reached the age of 21, in the situation when you are a family member of a Romanian citizen;
• if you have been granted a form of protection in Romania;
• if you are tolerated, during the period for which you were granted the tolerance of remaining on the Romanian territory.

Some relevant aspects to be mentioned are:

• the single employment permit is valid for 1 year, and can be extended for successive periods of one year each, for as long as you are under contract with your employer;
• in case the labor contract expires before the end of the period for which the residence permit is valid, the TCN has 90 days to find a new job. If the TCN finds a new employer, the company may hire the person if all legal steps are followed (e.g., to submit to the Immigration Office all needed document for issuing a new employment permit for the TCN);
• as the Romanian citizens, the TCNs may also be eligible for the unemployment benefits. The amount of the benefits and the period during which is granted depend on the individual circumstances of the person. For example, if the employee contributed to the social security fund for at least 1 year, the TCN will receive the unemployment benefits for 6 months. 

Covid-19

On the 16^th of March 2020, the state of emergency was introduced in Romania, a measure which contributed greatly to reducing the spread of the Covid-19. However, this effect was achieved with a series of drastic restrictions on the labor market. Thus, economic analysts claim that large companies, employees and employers have been severely affected by the global coronavirus pandemic. They claim that according to the National Institute of Statistics, the hourly cost of labor in the second quarter of this year recorded a growth rate of 11.47% compared to the previous quarter, and 16.11% compared to the same quarter of the previous year, mainly determined by the interruption of the activity in the context of Covid-19. Overall, more than 900.000 Romanians have lost their jobs due to the current pandemic. 

Covid-19 pandemic and its economic effects also impacted the TCNs legally residing in Romania for work purposes. In some cases, they remained unemployed and decided to return in the country of origin, and in others the employers reduced their working hours for a specific period of time.

To mitigate the spread of the virus while keeping the activity ongoing, some companies encouraged their employees to work from home, a measure which was quickly implemented in many branches of the economy and was highly appreciated by the employees who declared being more productive and less stressed at home.

To strengthen the labour market, new measures were adopted by the Romanian government, establishing active support measures for employees and employers in the context of the epidemiological situation caused by the spread of SARS-CoV-2 coronavirus. These measures are mainly aimed at providing financial support to employers to reduce the negative social and economic effects caused by the spread of Covid-19 and, implicitly, to prevent an increase in the unemployment rate.