Since August, 10th, 2020 Romania has implemented short-time work, a concept used in many European states in order to reduce unemployment and bring long-time benefits to the economy. The initiative for the Emergency Ordinance 132/2020 (the “EO“) regulating the short-time work was launched at the beginning of March, and our law firm has been involved in developing the legal framework for the local market.

Meaning of short-time work

Under certain circumstances the working time and the wages may be reduced by the employer, and the State will compensate the respective reduction by a certain amount (“short-time allowance”).

Romanian legislation for short-time work

The maximum working time to be reduced is 50% of the working time agreed according to the employment agreement.

The short-time allowance amounting to 75% of the loss of wages shall be paid by the employer, while the State reimburses it within a short period of time. 

Calculation example

Assuming that an employee has a wage of 1,000 EUR and a reduction of work time of 50% applies, his or her wage would be reduced to 500 EUR.

The short-time allowance to be reimbursed by the State to the employer represents 75% of the difference between the initial salary and the reduced salary, i.e. EUR 375. Hence, although the employee works 50% of the working time agreed according to the employment agreement, he/she will receive 875 EUR.

Conditions for short-time work

The business activity of the employer shall be reduced as a consequence of an imposed state of emergency, state of alarm or siege.

Short-time allowance to be reimbursed under certain conditions

The employer may benefit from the reimbursement under the following cumulative conditions: 
• at least 10% of the employer’s employees are affected by the reduction of the working time,
• the revenues in the previous month, or in the month before the previous month, are reduced with at least 10% if compared to the revenues of the respective month of the previous year.

Actions to be taken by employer

The employer may decide to apply short-time work for at least five (consecutive) working days, but only:
• after information and consultation of the trade union, the employee’s representatives or the employees,
• by unilateral decision of the employer, which has to be registered in the employee register “Revisal”,
• by organizing the working schedule for the entire month, which turns it into a very inflexible tool in practice.

Reimbursement in practice

The short/time allowance shall be reimbursed within 10 days upon request. The practical aspects regarding short-time work will be regulated in a government decision, which is currently still not final. 

Restrictions for employer

While applying the short-time work:
• the employer shall not recruit employees for similar activities,
• the respective employees are not allowed to work overtime,
• no collective redundancies will be performed, etc.

Special rules apply for apprentices (Ro. ucenici), unqualified occasional dayworkers (Ro. zilieri) and fixed-term employment agreements

For more details, please check our website: 
https://stalfort.ro/wp-content/uploads/2020/08/20200812_NEWSFLASH_Short_time_work.pdf

Freelancers, liberal professions and small businesses

Freelancers/ liberal professions (Ro. persoane fizice autorizate – PFA, intreprinderi individuale – II, intreprinderi familiale – IF) and employees with employment conventions based on the special legal regime of “cooperation” shall have the right, upon request, to receive a monthly allowance of 41.5% of the medium gross salary for 2020, hence RON 2,253.

Work from home

For employees working from home (Ro. telesalariati), the employer has the right to receive a one-time allowance of 2,500 RON for each such employee. This allowance is for the purpose of acquiring goods and technological services required in order to facilitate the work from home. 

More on our website:
https://stalfort.ro/wp-content/uploads/2020/08/20200817_NEWSFLASH_Short_time_work_supplemental.pdf