1. Admission to work without the conclusion of the individual labor contract and without reporting in General Register of Employees, constitutes undeclared labor.
In the context of undeclared labor being a phenomenon of increased gravity, that the society is confronting and the Romanian legislation did not provide a definition of undeclared labor, by this normative act the legislator regulated the situations that constitute undeclared labor, as well as the applicable sanctions within.
Thus, according to art. 1511 introduced by the Government Emergency Ordinance no. 53/2017, letter. a) “undeclared labor” means “admission to work of a person without the individual written labor contract” on the day preceding the commencement of the activity” and to letter b) we identify another situation which constitutes undeclared labor, namely “admission to work of a person without transmission of the employment report to the General Register of Employees, no later than the day before the commencement of the activity”.
This normative document identifies two deeds that constitute undeclared labor, namely the admission to work without the conclusion of the individual labor contract, before commencing the activity and admission to work without registering the employment report before the commencement of the activity. Both deeds will be sanctioned with fines of Lei 20,000 per each person, identified (something that, in fact, is already happening: the first act is now covered by the Labor Code, and the second – by the Government Decision no. 500/2011 regarding General Register of Employees). Regarding this too, the minimum amount of fines, Lei 10,000 was excluded, with only one value being retained, the maximum of Lei 20,000. An additional sanction was also introduced, in case of committing one of these undeclared labor deeds, namely the dismissal, by the Labor Inspectorate, of the activity of the organized labor.
2. Admission to work of employees during suspension of labor contract, represents undeclared labor
Another form of undeclared labor is considered to be, according to art. 151 letter. c) “the employment of an employee while he has the individual labor contract, suspended”. This change is, in fact, only a recognition in the legislation regarding the jurisprudence of the Supreme Court of Romania. Specifically, for the work during the suspension of the contract, the employers will face fines of Lei 20,000 for each identified person (instead of fines between Lei 10,000 and Lei 20,000, as originally foreseen). Also, in case of this deed of undeclared labor, a additional sanction will be applied by the Labor Inspectorate regarding the activity of the organized work. The activity may be resumed after the employer has paid the fines imposed by these three situations and after demonstrating that he has remedied the deficiencies that led to the cessation of the activity.
3. Admission to work of part-time employees outside the program, amended by Law
The fourth undeclared labor situation, according to art. 1511 letter d) is the “admission to work of an employee, outside the working hours, established according individual part-time labor contracts”. Thus, if a part-time employee goes to work outside the agreed contractual labor schedule, he will perform, according to the law, undeclared labor. Until today, this activity was not identified by the Labor Code as undeclared labor, but there was only an injunction on providing overtime for part-time employees. Thus, this form of undeclared labor can be sanctioned with fines of Lei 10,000 for each identified person.
4. Addendums will have to be concluded before came into force
According to art. 17, paragraph. (5) of the Labor Code, as amended by this normative act, “any modification of one of the elements provided in paragraph (3) during the rendering of the individual labor contract requires the conclusion of an addendum to the contract prior to the amendments realized, except the fact where such amendment is expressly provided by law or by the applicable collective labor agreement.”
Thus, one of the most important changes that occurred in the employers’ activity is shortening the term in which the addendums to contractual changes can be concluded (e.g. salary increase or change of evaluation criteria of professional activity). Precisely, the addendums will have to be concluded before it came into force, not within 20 working days from the date of the changes as foreseen in the previous legislation.
5. Keeping records of working hours will be much stricter
According to art. 119 of Labor Code, “the employer has the obligation to keep the record of the hours worked daily by each employee, with the highlight of starting and ending hours of the work program, and submit this record to Labor Inspectors for control, whenever this is required”.
As a result of validity of this Ordinance, the daily record of employees will have to be more detailed than it has been up until now. Specifically, if previously only employers were required to keep track of working hours, now they would be required to keep record of both, starting time program and ending time program.
6. Possibility to realize payment for only half of the fines regarding undeclared labor
According to art. 260 paragraph 11 of Labor Code, “the offender may pay within 48 hours from the date of conclusion of hand-over protocol, or from the date of its communication, half of the fine provided in paragraph. (1) letter. e) -e3), the labor inspector making mention of this possibility within the report.”
For these four facts that will constitute undeclared labor, abovementioned, employers will be able to realize payment for only half of the minimum fines, but only if they pay them within 48 hours of the conclusion / communication of the contravention report.
7. Obligation of the employer to keep a copy of the individual labor contract
The new normative act brings changes to art. 16 of Labor Code and stipulates in paragraph. (4), the fact that “the employer is required to keep a copy of the individual labor contract of the employees who work in that place”.
Thus, in addition to the records of the working time provided by each employee on a daily basis, with a highlight of the starting hours and ending hours of the labor program, the employer has the obligation to keep a copy of the individual labor contract at the workplace. This regulation creates the possibility of verifying in real time the form of employment of the persons carrying out activity at the controlled work place, by immediately confronting the existing data in the documents, with those transmitted in the General Register of Employees. Contravention of this obligation will be sanctioned with a fine of Lei 10,000.
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