CROSS-BORDER POSTING OF WORKERS

The national legislative framework regulating the posting of employees as part of the cross-border service provision, represented by law no 16/2017, has been subject to significant changes in 2020, by the adoption of law no. 172, in force since August 16, 2020. This normative act transposed into national law EU Directive 2018/957 amending the Directive 96/71 concerning the posting of workers in the framework of the provision of services.

Here below, there is a summary of the main provisions in force regarding the rights of employees posted within the framework of transnational services, whether they are posted from the EU / the Swiss Confederation to Romania or vice versa.

Posting of employees from the EU/ Swiss Confederqtion to Romania

According to Romanian law, an employee posted to Romania is an employee of an employer established in an EU member country / Swiss Confederation who is sent to work, for a fixed period of time, on Romanian territory.

The duration of posting

The law does not provide for a maximum period for the posting. However, when calculating this duration, one shall take into account the periods when the job was taken by another employee posted to fill the same job within the framework of cross-border provision of services.

The conditions to be fulfilled by the employer

In the context of transnational posting, the employer who posts employees must comply with a "hard core" of rules, in force in the country of destination (in this case Romania), concerning in particular:

• The remuneration of the posted employee

According to Law no 172/2020, “the remuneration of an employee posted to Romania” includes: (i) the minimum wage (as established by national law and / or the collective employment contract concluded at sectoral level), (ii) the mandatory indemnities provided for by national law or collective agreements with general application (seniority indemnity, if mandatory under the applicable collective labor agreement, etc.).

• The maximum duration of working time: 48 hours / week
• The minimum of weekly rest period: (1) 48 consecutive hours - weekly rest; (2) 12 hours between 2 consecutive working days;
• The rules in force concerning health and safety at work;
• The minimum duration of paid leave, respectively 20 working days per calendar year; o Housing conditions, as well as allowances or reimbursement of transport costs on the territory of Romania, when traveling from the usual place of work to another place of work;

At the same time, please have in mind that in order to be able to post employees to Romania, a company based in a member state of the EU or of the Swiss Confederation must carry out in its country of origin a significant activity in the field in which employees are posted to work. This aspect is likely to be subject of a check by the Romanian labor Inspectorate that may cover a reference period of one year behind.

Specific rights of employees posted to Romania

If the actual duration of the posting exceeds a 12-month period (18 months, with the obligation to notify the Labor Inspectorate and to justify such decision), the employer who posts the employee to Romania must guarantee the latter, in addition to the rules of said "hard core", all other working conditions applicable according to the Romanian law, except for the rules concerning the conclusion and termination of the employment contract of the posted employee.

Posting of employees from Romania to another EU member country / the Swiss Confederation

According to the law, an employee posted from Romania to an EU member country or the Swiss Confederation is the employee of an employer registered in Romania who carries out its activity in the territory of one of the aforementioned countries. The possibility to post an employee is conditional upon the employer from Romania carrying out a significant activity in his country of origin.

Duration of posting: maximum 24 months

The Romanian law introduced, as of August 2020, the maximum limit of 24 months for the posting of employees from Romania abroad, on the basis of a contract signed with a foreign company, within the framework of transnational service provision.

Rights of employees posted from Romania

Employees posted from Romania as part of a transnational service provision benefit from the working conditions provided for by the laws and regulations in force in the country of posting, namely the “hard core” rules relating to: (i) maximum length of working time and minimum period of rest; (ii) the minimum duration of paid annual leave; (iii) the minimum wage, including compensation or payment for overtime; (iv) the conditions of assignment of workers by temporary work agencies; (v) health and safety at work; (vi) protective measures regarding working conditions applicable to pregnant women / women who have recently given birth, as well as children and young people; (vii) equal treatment between men and women and other provisions relating to non-discrimination.

The tax regime of the specific transnational posting allowance

According to Romanian law, during the period of posting, the posted employee is entitled to compensation, the applicable tax regime of which is that provided for in art. 76 paragraph (2) letter k) of the Tax Code, namely the allowance is exempt from the payment of tax and compulsory social charges within the limit of 2.5 x the daily trip allowance paid by the public system (for example, for France , the allowance is 35 euros / day). For the record, this allowance is part of and it is taken into account in the calculation of the remuneration of the posted employee;

The remuneration of the employee posted from Romania

As specified, the employee posted from Romania benefits from the same remuneration conditions applicable in the country of posting, including the conditions relating to the payment of overtime (included in the calculation of the secondment allowance).

Note that the specific secondment allowance is considered part of the remuneration, except for the expenses generated by the secondment (for example, accommodation costs).

If the actual posting of the employee exceeds a period of 12 months (18 months under certain conditions) - the posted employee must benefit, regardless of the law applicable to labor relations, from all other applicable working and employment conditions, which are established in the Member State in whose territory the work is performed, except as regards the formality of the conclusion / termination of the employment contract or the conditions for the application of the non-competition clause, which remains governed by the Romanian legislation.

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In order to clarify certain aspects which have posed problems in practice with regard to the working conditions of posted employees, the Law no 172/2020 has made certain changes which concern foreign employees posted to Romania as well as those posted from Romania to abroad.

Thus, according to the law, posted workers must benefit from:

• appropriate accommodation conditions, when performing their duties in a place of work other than their usual place of work;
• compensation and reimbursement of transport, accommodation and subsistence costs, when, for professional purposes, they have to travel to and from their place of secondment or between their place of secondment and another place of temporary work, in compliance with the applicable national legislation or the collective contracts in force.

The employee posted by a temporary work agency (interim agency)

A temporary employment company, also called an “interim agency” or “placement agency”, is a company whose mission is to put its employees (“temporary employees”) at the disposal of other companies, for a limited period of time.

According to Law no. 172/2020, an employee who has been put at the disposal of an employer registered in Romania by a temporary work agency and who was subsequently seconded by this employer to another EU member country / the Swiss Confederation, is considered to be posted from Romania by the temporary work agency.

For the record, the temporary employee benefits from the working conditions provided for by Government Decision no. 1256/2011 art. 1 al (3) (namely - the conclusion of a written employment contract which also stipulates the elements that normally appear in an employment contract, the conditions under which the position is exercised, the duration of his mission, the identity and the seat of the company which uses the employee, as well as the amount and terms of remuneration of the temporary employee).

At the same time, if an employee placed at the disposal of a company must carry out his activity in the territory of a country other than that where the job is usually done, within the framework of a transnational provision of services of the user company, he is considered to be a seconded employee by the temporary work agency with which he has a direct contractual relationship.

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For the record, the provisions of Law No. 16/2017 on transnational posting concern:

• the posting of a foreign employee to Romania or, as the case may be, of an employee from Romania to another EU member country or the Swiss Confederation, on behalf of a company and under its coordination, within the framework of a contract concluded between the posting company and the beneficiary of services operating in Romania or, as the case may be, in a Member State other than Romania or in the Swiss Confederation, if there is a work relationship, during the period of secondment, between the employee and the company carrying out the secondment;
• the posting of an employee to a facility or a company belonging to the group of companies, located in Romania or, as the case may be, on the territory of a Member State other than Romania, or on the territory of the Swiss Confederation, if there is an employment relationship, during the posting, between the employee and the company carrying out the posting;
• the secondment of an employee, by a temporary employment agency, to a user company established or operating in Romania or, as the case may be in the territory of a Member State other than Romania, or in the territory of the Swiss Confederation, if there is an employment relationship, during the secondment, between the employee and the interim agency.

Sanctions

Failure to comply with the conditions relating to transnational posting, ascertained by the Romanian control bodies, leads to referral to the authorities of the country of origin, as well as the possibility of sanctioning the beneficiary from Romania, who may be punished for undeclared work, according to the Romanian Labor Code (which provides for a fine of LEI 20,000 / employee, without however exceeding LEI 200,000, irrespective of the number of employees violating the conditions of transnational posting). This would be in addition a potential tax risk.

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Last, but not least, when it comes to the social security system, as a general rule, every employee is subject to an unique social protection legislation, namely the legislation where the job is performed, except for the posted employee who remains subject to the social security system of the country of origin for a maximum 24-month period, conditional upon getting the A1 / S1 certificate for the period of posting.