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LABOR CODE: SIGNIFICANT CHANGES IN THE SPHERE OF LABOR RELATIONS

LABOR CODE: SIGNIFICANT CHANGES IN THE SPHERE OF LABOR RELATIONS

Last updated: 13 October 2021

The Labor Code has recently undergone some changes which, according to the legislator, aim to combat harmful practices in the field of labor relations, in particular concerning the working time provided for in part-time contracts, social returns, or late payment of wages.

The GEO no. 117/2021, published in the Official Journal 951 of October 5, 2021, also brings important changes to the provisions relating to overtime and to the regime of sanctions in the event of undeclared work.

The ordinance entered into force on October 5, 2021, except for the modifications concerning the sanctions regime which will enter into force 15 days after the date of publication of the normative act, i.e. October 20, 2021.

Here below there is a brief overview of the changes brought by the GEO no. 117/2021:

- Undeclared work: An employee working beyond the working time provided for in his part-time employment agreement (except in cases of force majeure or other urgent work to prevent accidents or remedy their consequences), is deemed undeclared work and is punishable by a fine ranging from Lei 10,000 to 15,000 for each employee in such a situation, up to lei 200,000 per company in an irregular situation.

- Under-declared work: The Labor Code introduces for the first time the concept of "under-declared work", namely the granting of a net salary higher than that the one declared to the authorities under the monthly tax returns on social contributions, income tax and the nominal register of insured persons sent to the tax authorities. Such a practice is punished with a fine ranging from 8,000 to 10,000 lei for each employee in such a situation, up to 100,000 lei by a company in an irregular situation.

- Overtime: The employer now benefits from 90 days to compensate for overtime worked by employees with free time as compared to 60 days before. For the record, if the employee cannot compensate the overtime with free time within 90 days, the employer must pay the employee the overtime by granting a bonus of at least 75% of the gross base salary.

- Payment of wages: Delaying the payment of wages by more than one month after the date of payment provided for in the individual or collective employment agreement or in the Internal Regulation is a contravention punishable by a fine ranging from 5,000 to 10,000 lei per employee who would be found in the situation described above. The only exceptions to this rule are employers whose statute is governed by the Law 85/2014 on Insolvency Prevention and Insolvency Proceedings.

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