What Severance Pay Rules Must Employers Follow in Romania?

Which Employees Qualify for Severance Pay?

• Employees whose individual employment contracts or offer letters expressly grant severance on termination.
• Employees covered by a collective bargaining agreement that provides severance for redundancy or other specified terminations.
• Employees included in an internal policy or social plan that promises severance for restructuring or collective redundancies.
• Employees dismissed for reasons not related to their person (such as role redundancy) where a company-wide severance practice is consistently applied.
• Employees whose severance has been negotiated in a mutual termination agreement or settlement at the end of employment.
• Employees of multinational groups where group policies or past practice in Romania create an expectation of severance benefits.

What Are the Legal Timelines for Paying Severance?

Romanian legislation does not set a specific statutory deadline for paying contractual or policy-based severance, but you should treat it like any other salary-related entitlement due at termination. In practice, severance is usually paid on or before the final payroll date covering the termination month. Many employers pay it together with the final salary, unused holiday pay, and any bonuses due. To reduce disputes, your company should clearly state in contracts or policies when severance will be paid and reflect that in the termination decision. Paying promptly and documenting the payment in a signed receipt or settlement agreement is the safest approach.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance that is owed under a contract, collective agreement, or internal policy, you risk labour inspections, civil claims, and additional financial exposure. Employees can bring claims before the labour courts for unpaid amounts, plus legal interest and court costs, and the Labour Inspectorate may impose fines for broader wage-payment breaches.

• Unpaid severance can be claimed in court together with statutory interest and monetary indexation.
• The Labour Inspectorate may investigate if non-payment suggests wider wage or record-keeping violations.
• Court judgments can add legal fees and enforcement costs to the original severance amount.
• Reputational damage can affect future hiring and relations with unions or employee representatives.
• Systemic non-compliance may trigger closer scrutiny of your wider HR and payroll practices.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as the service described at https://www.playroll.com/employer-of-record does not remove the need to respect Romanian labour standards, but it can shift who is the legal employer on paper. In a typical EOR model, the EOR is the formal employer responsible for issuing contracts, processing payroll, and implementing any agreed severance. However, your company, as the client, usually bears the commercial and economic responsibility for funding severance and complying with agreed termination terms. Romanian courts may look at the real control over the employee when assessing liability, so you should ensure the EOR contract clearly allocates severance obligations. Aligning your internal policies with the EOR’s template contracts helps avoid gaps or double expectations around severance.

Be 100 Percent Compliant in Offering Severance with Playroll

Working with Playroll helps your company turn Romania’s severance rules and market practice into clear, written processes. We translate your global policies, local collective agreements, and Romanian Labour Code requirements into compliant contract language and termination checklists. That means your HR and finance teams know exactly when severance applies, how to calculate it, and how to document it for audits and disputes.

Playroll also coordinates timing so severance is paid correctly with final salary, taxes, and social contributions, whether you employ directly or via an EOR partner. Our team tracks changes in Romanian employment law and common court practice, then updates your templates and workflows before they become a problem. With Playroll, you reduce the risk of unexpected claims, penalties, or reputational damage when restructuring or ending employment in Romania.