Government Emergency Ordinance no. 117/2021 for amending and supplementing the Labour Code

The takeaway

• GEO 117/2021 for the completion and amendment of the Labour Code entered into force on 5 October, with the exception of the contraventions and related sanctions provisions, which enter into force on 2 October 2021.

• One of the cases representing undeclared work has been modified, along with the related contravention and sanction.

• The concept of "underreported work" has been regulated.

• The term for compensating overtime work has been extended from 60 to 90 calendar days.

• Two new contraventions have been introduced regarding the granting and payment of salary.

In detail

Government Emergency Ordinance no. 117/2021 (GEO no. 117/2021) additions and amendments to Law no. 53/2003 – Labour Code is aimed at, among other aspects, discouraging and combatting “grey labour”.

• The concept of grey work is legally defined as “under-declared work”, which represents the granting of a net salary higher than that recorded in the payroll statements and monthly declarations to the authorities on social security contributions, income tax and the nominal record of insured persons.

• One of the cases regulated as representing undeclared work has been modified to replace “hiring an employee outside the working hours established in individual part-time employment contracts” with “hiring an employee with overtime working time established in individual part-time employment contracts, except in cases of force majeure or for other urgent work intended to prevent accidents or to alleviate their consequences”. The contravention and related sanction have also been modified to limit the cumulative value of the fines to RON 200,000, as follows: “constitutes a contravention and is sanctioned with a fine of RON 10,000 to RON 15,000 for each identified person, RON 200,000 for the employment of one or more employees exceeding the duration of the working time established within the individual part-time employment contracts”.

• The period during which the additional work is to be compensated has been extended from 60 to 90 calendar days as of the date of performing the work.

• Two new contraventions and related sanctions have been introduced:

  • Granting a net salary higher than that recorded in the payroll statements and monthly declaration to the authorities on social security contributions, income tax and the nominal record of insured persons – sanctioned with a fine of RON 8,000 to RON 10,000 for each identified employee, without exceeding a total of RON 100,000.

  • Employer breaching obligation to pay the salary within a month as of the payment date established in the individual employment contract, applicable collective labour agreement or internal regulations – sanctioned with a fine of RON 5,000 to RON 10,000 for each person whose salary was not paid. Employers covered by Law no. 85/2014 on insolvency prevention and insolvency proceedings are exempt.

[Source: Government Emergency Ordinance no. 117/2021 for the amendment and completion of the Labour Code, published in the Official Gazette no. 951 dated 5 October 2021]