By amending the Labour Code in August 2017, via the Emergency Ordinance no. 53/2017, the Government toughened the rules on conclusion and declaration of employment contracts and facilitated the authorities’ control activities in the sensitive area of undeclared work.

Some of the main changes introduced by EGO no. 53/2017 are related to the registration of employment contracts, to the prohibition of rendering work/accepting work in the absence of a written employment contract and to the employer’s obligation to officially record the daily duration of each employee’s presence in the work place, including entry and exit hours.

We will set out below the most noteworthy legal amendments – which are either striking by their severity or able to generate organizational changes for major employers.

I. New rules regarding the conclusion and declaration of employment contracts

EGO no. 53/2017 introduces a new approach on the subject of registration/ declaration of employment contracts.

The Government decided to eliminate criminal liability for employers which do not use written employment contracts and do not declare the respective work to the labour authorities, replacing it with administrative liability.

Thus, starting with August 2017, any employer who uses undeclared work is liable to pay a fine of 20,000 RON (approx. 4,400 EUR) per each undeclared employee.

In addition, the labour authorities have been granted the possibility to suspend the activity of any employer which is found liable in this regard.

To be noted that such prerogative may apparently be exercised even if the breach regards a single employee and irrespective of whether or not the failure to declare the respective employment is due to an omission or simply to a delay in observing the applicable legal deadline.

EGO no. 53/2017 indicates that the decision on the suspension of activity would have to observe a specific procedure, to be adopted by the Ministry of Labour at a later date, after consultations with the nationwide trade unions and employers’ confederations.

II. Obligation to keep detailed daily timesheets for all employees

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As part of the same legislative approach oriented towards the tightening of rules to combat undeclared work, starting with August 2017 all employers are required to timely and accurately record the employees’ working time – including daily entry and exit hours.

Such daily timesheets (in Romanian: pontaje) must be available at any time for inspection by the labour authorities.

To be noted, for clarification purposes, that the timesheets are the documents which serve as basis for the monthly payrolls (in Romanian: state de salarii), being thus part of the same category of official company/accounting records as the payrolls.

RECOMMENDATIONS

Considering the tightening of legal rules such as briefly described above and the severe legal consequences that may occur in case of breach thereof, we recommend that the companies pay special attention to the following practical matters:

We recommend that such companies implement internal rules whereby all managers perform periodic checks of the respective automatic logs and, where the case, they discuss/check with the employees the reasons for situations such as: unauthorized leaves, extended presence on the premises (i.e., checking whether the employees were working overtime – knowing that, if the case, this should be reflected accordingly in the official timesheets and paid via the payrolls) in order to ensure that the timesheets actually reflect the employees’ activity and further substantiate accurate payroll calculations.