Uberization of work in Romania

Uberization of work in Romania

IT giants have typically opted for flexible employee scheduling, allowing, for example, in IT, software development, customer support and sales/marketing, types of services and the diffusion of regular work from a fixed office job to work from home, allover cities in Europe from the comfort of the people’s home.

When considering entering into an employment contract through your EU/non-EU entity with a foreign national, such as Romanian individual or authorized services provider, labour law, tax and corporate issues should be taken into account.

First question: However, the question arises, how can, from a legal point of view, entities that do not have a local presence registered in Romania have the status of employer?

This new type of contracting whereby employees are paid for work performed on online platforms is becoming increasingly popular.

Through uberisation, services are provided to clients or are provided for the employing entity without it physically having property or a presence in Romania.

If until a few years ago, after Romania’s accession to the European Union, the performance of paid work by Romanian citizens for foreign entities that had no presence in Romania was of very low probability, in recent years we are facing the “uber” business model, more precisely, the uberization of activities in Romania, especially in the field of IT &business promotion/marketing activities.

If employees are used to come to a specific place, called workplace, lately this concept is starting to be replaced by working from home, by concluding work contracts with the place of work “at home” or “telecommuting” or “teleworking”.

This type of work contract has become an increasingly popular tool for large corporations to meet the needs of their clients by hiring employees in Romania, who often work from home, thus having the flexibility to set their own working hours.

Advantages of uberisation: This type of business model reduces significantly employers’ costs by engaging highly skilled workforce in Romania, with no costs for a fixed location in Romania,business model which needs only to be very carefully customized from a legal, point of view.

The most important issues which may arise and that need attention are the risk of the permanent location in Romania of the beneficiary based abroad and the liability risk related to the employee safety, namely if the employee has not been trained in time on health and safety rules.

  • Permanent establishment risk – which may result in corporate tax in Romania, excepting certain cases
  • Occupational health and safety risk – which in case it is not diligently planned may result in criminal charges consequences, provided the company ordering telework acts in fact as an employer.

Write us in case you need advice on any of the above.

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