Of all the penalties a company can face in Romania, fines under the Labor Code (Codul muncii) are among the most painful. They are frequently calculated per employee rather than per company, and in serious cases they come with the temporary suspension of the business and administrative or even criminal liability for the director. An unannounced inspection by the Labor Inspectorate (ITM) can turn a simple administrative oversight into a bill of tens of thousands of lei.
For foreign investors running a Romanian subsidiary, this matters even more: HR compliance is easy to underestimate from abroad, and Romanian deadlines are stricter than most people expect. The good news is that, unlike many tax risks, these fines are almost entirely preventable. They do not depend on ambiguous interpretations of the law but on respecting clear deadlines and formalities.
This article explains how the penalties work, ranks them by severity and sets out the concrete steps a careful employer takes to stay protected. Because fine amounts and thresholds are updated periodically by law, we give indicative ranges and flag where the value in force at the time of inspection must be verified.
Undeclared work — the most serious offense
At the top of the hierarchy sits undeclared work (informally, “working off the books”). The law defines it broadly: it is not only the total absence of a contract, but also subtler situations many employers do not perceive as illegal.
- Putting someone to work without a written individual employment contract concluded no later than the day before activity begins.
- Putting someone to work without transmitting the employment relationship to REVISAL before activity begins.
- Putting someone to work while their contract is suspended.
- Working beyond the agreed duration on part-time contracts (disguised overtime).
- Grey payment — part of the salary declared, the rest paid in cash with no contractual or tax reflection.
Fines for undeclared work are among the highest in all of Romanian administrative law and apply per person identified. An inspection that finds several undeclared workers can quickly become catastrophic for a small firm. In addition, inspectors may order the suspension of operations until the situation is remedied, and in aggravated or repeated cases the offense can carry criminal liability. The employer must also pay retroactively the contributions and taxes for the period worked.
REVISAL — the heart of HR compliance
The general employee register, REVISAL, is the tool through which the state “sees” in real time who works at your company. Most preventable fines arise from late or erroneous submissions. The golden rule: every event in the life of a contract has its own deadline.
| Event | REVISAL submission deadline |
|---|---|
| Hiring (new contract) | No later than the day before activity begins |
| Change of salary or role | Before it takes effect (generally at least one day prior) |
| Change of working time | Before it takes effect |
| Suspension / resumption | Shortly after the event (verify the deadline in force) |
| Termination of contract | On the termination date or the next working day |
Failure to submit, late submission, or entering incorrect data is sanctioned with fines that can apply per affected employee. Companies with high staff turnover (hospitality, construction, retail) therefore carry a proportionally higher risk and need a disciplined process, not entries made “when there is time.”
Common REVISAL errors
- Contract properly signed but transmitted to REVISAL after work began — technically undeclared work.
- Pay rise processed in payroll but not submitted to the register on time.
- Contract termination not recorded, so the employee still appears active.
- Wrong personal identification number (CNP), causing discrepancies during inspections.
Non-compliant contracts — missing clauses and sub-minimum pay
Even with REVISAL up to date, a poorly drafted contract remains a source of penalties. The Labor Code requires a set of mandatory clauses without which the contract is deemed non-compliant: identity of the parties, place of work, role per the Romanian occupational classification (COR), duties, specific risks, start date, duration, leave, salary with its components, working hours and notice conditions.
Two frequent traps:
- Salary below the guaranteed gross minimum wage. No full-time contract may set pay below the minimum established by government decision for the given year. The minimum is updated periodically (sometimes more than once a year), so the value in force must be verified at each recalculation. Special rules also apply to sectors such as construction.
- Failure to inform the employee before hiring about the essential elements of the employment relationship, and failure to update the contract via an addendum at each change.
Each of these breaches carries its own fine. A periodic audit of personnel files uncovers, in good time, contracts lacking an addendum for the latest minimum-wage increase — an extremely common cause of non-compliance, especially in foreign-owned subsidiaries.
Other penalties the director tends to overlook
- Not keeping a record of hours worked by each employee (time sheets).
- Breaching weekly rest, breaks, or exceeding the legal overtime cap.
- Not granting annual leave or failing to compensate it on termination.
- Missing job description or occupational health and safety (SSM) briefings.
- Late payment of salaries.
How to prevent the fines — a checklist
- Sign the contract and submit REVISAL at least one day before the first working day — no exceptions.
- Check the contract salary against the gross minimum wage in force at that date.
- Include all mandatory clauses and issue an addendum at every change.
- Keep monthly time sheets and records of overtime and leave.
- Run an HR audit at least once a year, or at every minimum-wage change.
This is where a specialized partner earns its place. Within our accounting and payroll services we handle the HR side end-to-end: drafting and updating contracts, timely REVISAL submissions, salary and contribution calculations, and deadline monitoring — including reporting to a German, Austrian or other parent company. See also how we help for the full picture.
Conta Fiscal is an accounting and tax advisory firm, a CECCAR member since 2004, based in Cluj-Napoca with over 20 years of experience, working regularly with foreign-capital companies from Germany, Austria, Italy and the Netherlands. If you want your company’s HR side to be flawless, contact us for a conversation.
Frequently asked questions
What happens if I submit the contract to REVISAL on the same day the employee starts work?
It is treated as undeclared work. The law requires submission no later than the day before activity begins, so a same-day entry — even in the morning — can trigger the maximum fine per person.
Are Labor Code fines applied per company or per employee?
Can I pay part of the salary in cash, unofficially?
No. “Grey” payment is a form of undeclared work and contribution evasion. You risk fines, retroactive tax payments and, in serious cases, criminal liability.
What do I do if the minimum wage rises but old contracts still show the previous amount?
An addendum must be issued for each full-time contract below the new minimum, and the change submitted to REVISAL before it takes effect. An annual audit prevents this non-compliance.
Can the ITM suspend my business?
Yes. When undeclared work is found, inspectors can order the suspension of operations until the situation is remedied, on top of the administrative fine.
How often should personnel files be reviewed?
Ideally at least once a year, and mandatorily at every change of the guaranteed gross minimum wage or of labor legislation.