What Severance Pay Rules Must Employers Follow in Moldova?

Which Employees Qualify for Severance Pay?

• Employees dismissed due to staff reduction, reorganization, or liquidation of the company, where the termination is initiated by the employer.
• Employees whose position is eliminated for economic or technological reasons not related to their conduct or performance.
• Employees who refuse to transfer to another job or location when the original position is substantially changed or no longer exists, if the law treats this as employer-initiated termination.
• Employees dismissed because they no longer meet job requirements for health or qualification reasons, as confirmed under legal procedures.
• Employees whose fixed-term contracts expire but are converted or terminated in circumstances where the Labour Code grants severance (for example, early termination by the employer without fault of the employee).
• Employees covered by collective agreements or individual contracts that provide more generous severance than the Labour Code minimums.

What Are the Legal Timelines for Paying Severance?

In Moldova, severance must generally be paid on or before the employee’s last working day, together with all final salary and unused vacation compensation. The Labour Code requires employers to settle all financial obligations at termination without unjustified delay. In practice, your company should aim to calculate and approve severance as soon as the termination decision is confirmed. Payment is usually made via the normal payroll channel, but you should not wait for the next regular pay cycle if that would postpone payment beyond the termination date. Where internal processes cause a short delay, document the reason and obtain written acknowledgment from the employee. Always keep payroll records and signed calculations in case of labour inspector or court review.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Moldova, you risk financial, administrative, and reputational consequences. Labour inspectors can investigate complaints, and employees may claim unpaid amounts, indexation, and compensation for late payment. Courts tend to interpret severance protections in favor of employees, especially in redundancy cases.

• Unpaid severance can be ordered in full, plus compensation for delays and monetary damages.
• Labour inspectors may impose administrative fines on the company and responsible managers.
• Courts can reinstate employees if the dismissal procedure or severance calculation was unlawful.
• Non-compliance can trigger back payments of social contributions and related payroll taxes.
• Reputational damage may affect future inspections, union relations, and hiring efforts.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as https://www.playroll.com/employer-of-record does not remove the need to follow Moldova’s Labour Code on severance. In a compliant EOR model, the EOR is the legal employer on paper and is responsible for issuing termination notices, calculating severance, and running final payroll. However, your company typically instructs the EOR on when and why to terminate, so you remain economically and contractually responsible for funding any severance owed. If the EOR follows your unlawful instructions, both parties may face claims from the employee or scrutiny from labour authorities. Clear contracts, local legal review, and documented termination reasons are essential to manage this shared risk.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Moldova’s severance rules by combining local legal expertise with structured HR processes. Our team tracks updates to the Labour Code, collective agreements, and case law so your severance decisions reflect current requirements. We guide you on which termination grounds are safest, what notice and documentation are needed, and how to calculate statutory and contractual severance. This reduces the risk of disputes, inspections, and unexpected payouts.

When you hire in Moldova through Playroll’s global platform, we handle the heavy lifting of compliant terminations, from drafting notices to running final payroll. You decide the business strategy, while we ensure local procedures, timelines, and payments are executed correctly. With clear cost estimates, audit-ready records, and consistent workflows across countries, your team can restructure or close roles in Moldova with confidence that severance obligations are fully under control.