Since 2000, Romania has been the recipient of significant foreign investment, garnering more foreign investment than any other central and southeastern European country. In addition to its central location, Romania has a well-educated workforce and low labor cost as compared to other European Union (EU) member states. Before multi-national employers look to expand operations in Europe’s seventh most-populous country, however, an important first step is understanding the laws governing employment in Romania.

The Romanian Labour Code

All employers in Romania must comply with Romanian labor law, whether they employ Romanian citizens or foreign nationals, and regardless of the size of business. The Romanian Labour Code (Codul Muncii), which was enacted in 2003, governs the relationship between employers and employees, and covers local employees working for Romanian employers in Romania and abroad, as well as foreign citizens working in Romania. In addition to the Labour Code, employees’ workplace rights and benefits may be negotiated by trade unions or elected employee representatives. Employers with 20 or more employees are required to negotiate a collective labor agreement.