A Romania Employer of Record (EoR) or a Professional Employer Organization (PEO) refers to a company or organization that provides comprehensive HR solutions for companies. These PEOs are used to hire employees on behalf of companies, specifically in countries where the company may not have a legal entity or physical presence. The EoR is therefore responsible for managing the employment contracts, ensuring compliance with local labor laws, processing payroll, handling tax issues, and providing other HR services. They function as a form of co-employment, where the EoR becomes the legal employer, yet the day-to-day management and work directions remain with the client company.
Romanian Employers of Record, like PEOs elsewhere, navigate the complexities of the local legal and business landscape to assist international companies. They handle the legal and administrative responsibilities associated with employment in Romania, allowing foreign companies to focus on their operational aspects.
When a company contracts an EoR, they hand over the administrative, HR, and legal employment responsibilities to the EoR. The EoR then hires the required staff in its name on behalf of the company. The hired employees sign a contract with the EoR but carry out tasks set by the client company. This arrangement ensures that the foreign company remains compliant with Romanian labor laws and employment regulations without needing to establish a legal entity in Romania.
Several advantages come with using a Romanian EoR:
Despite the many benefits, there can be potential drawbacks to using a Romanian EoR:
Using an EoR, like Deel, Remote, Horizons, Bradford Jacobs, or Remofirst, is an efficient, cost-effective, and safe method for companies to expand into Romania. While there are potential drawbacks, the benefits far outweigh them, especially for companies that lack the resources or expertise to navigate the Romanian employment landscape independently.
No, it's not mandatory. However, without a registered entity in Romania, it's difficult to hire compliantly. An EoR provides an easy solution to this problem.
The timeline varies depending on the EoR and the specifics of the role. Generally, the process can take a few days to a few weeks. It's faster than setting up a legal entity, which can take several months.