Last updated: 22 February 2018
The Romanian and European labor market is facing an unprecedented crisis of qualified personnel, which explains the great mobility encouraged by companies in terms of labor force.
In such context, investors, especially foreign ones, increasingly use Romanian temporary work agencies (TWA) either for developing their projects in Romania or for posting Romanian workers in other EU countries.
To be successful, every investor must have a very good knowledge of how Romanian TWAs operate and the conditions under which such entities can be created, before they decide to create their own Romanian TWA or passing through an already created local TWA.
What you Have to Know About How Temporary Work Agencies Operate
First of all, one has to define the work through a temporary work agency as the work performed by a person under a temporary employment contract concluded with a temporary work agency and temporarily made available to a certain user (for duration set forth in the labor supply contract), under the latter’s watch and coordination.
Thus, an operation through a temporary work agency is a tripartite arrangement: the temporary work agency/ the temporary worker/ the user, which can be a Romanian or a foreigner entity.
From a contractual perspective, the parties sign two types of contracts, which must include various clauses expressly required by the law: an employment contract between the temporary work agency and the worker and a labor supply contract, concluded between the temporary work agency and the user. When concluding these contracts, one must take into account several conditions, among which:
• The mission of the temporary worker has to refer to a precise and temporary task and cannot exceed 24 month; however, it can be extended up to 36 months in total;
• The salary received by the temporary worker for each assignment cannot be lower than the salary received by the user’s employees who carry out the same or a similar work;
• The work and employment conditions regarding the duration of work, overtime, daily and weekly rest, night work, paid leave, bank holidays and salary must be the same as those that would apply if the worker were employed directly by the user.
• The temporary worker cannot be required to pay any additional fees to the temporary work agency for its actions relating to recruiting by the user or to the conclusion of a temporary employment contract. However, the temporary work agency can receive remuneration from the user (which is normally negotiated to cover all costs, including employee related costs and a profit margin).
As for creation formalities, temporary work agencies are companies registered with the Trade Registry and authorized by the Ministry of Labor. The creation of such agencies is subject to specific conditions, among which the payment of a guarantee of 25 minimum gross wages at the national level, plus the corresponding taxes, which means a total amount of approximately 11,000 Euros.
Create or Collaborate With a Temporary Work Agency?
Both hypotheses have advantages and disadvantages.
First of all, please note that, for the entire duration of a mission, the temporary work agency is and will remain the employer of the temporary worker, with all consequences arising therefrom. Thus, the agency undertakes several obligations, among which:
• To pay salaries and social security contributions;
• To provide the worker with all information mandatory by law before his/her departure;
• To obtain the A1 portable documents for each deployment, which allow employees to benefit from the social security of the country of origin (in case of transnational posting).
Indeed, the creation of a Romanian temporary work agency implies to meet several obligations, but also to have the necessary competent resources (accountants, human resources, lawyers etc.) in order to perform the abovementioned obligations.
On the other hand, if the investor decides to go through an already existing temporary work agency, he no longer has to fulfil the main obligations above or to pay the 11,000 Euros guarantee. He only has to pay the agency for the services rendered.
Finally, please note that, for the transnational posting of workers, the temporary work agency must have a significant activity in its country of origin (normally, at least 25% of its turnover must be obtain based on contracts with Romanian partners). Failing that, the work carried out by the employees in a foreign country could be considered as illegal and punished by severe fines. Also, the authorities could refuse to deliver the A1 portable documents for the posted workers. So, when creating a temporary work agency in Romania, investors must make sure that the agency will also have clients in Romania.
From our experience, in most cases investors choose to create their own temporary work agency in Romania, instead of collaborating with local ones, especially for financial reasons. However, in this case, investors often face problems regarding the significant activity in Romania (in case of transnational posting of workers).
Therefore, we insist on the fact that one have to analyze well the actual situation a temporary work agency, under all aspects (legal, financial etc.) and do that before starting the project, so that the most appropriate solution is chosen.