On September 18th, 2019, the Chamber of Deputies adopted the Bill no. 399/2018 (the “Bill”) to amend the Labor Code in order to discourage unpaid overtime and overtime exceeding the legal limits.
Pursuant to the Bill, where overtime work provisions are infringed, the employers will be sanctioned with a fine of RON 1,500 – RON 3,000/ EUR 315 – EUR 630 for each employee identified as providing overtime work whether unpaid or exceeding the legal limits.
According to the Labor Code, overtime work is any work performed upon the request of the employer outside the regular work schedule of 8 hours/day and 40 hours/week.
The maximum number of hours of work per week is 48 hours, with the additional eight hours counted as overtime. By exception, the work duration, including overtime, may exceed 48 hours/week on condition that the average time worked for a reference period of 4 calendar months does not exceed 48 hours/week.
Overtime work may be compensated with free paid time within the following 60 days, or with a bonus to the base salary of at least 75%.
Currently, under art. 260, par. 1, point i) of the Labor Code non-compliance with the overtime work provisions is sanctioned with a fine of RON 1,500 -RON 3,000/ EUR 315 – EUR 630. As per this provision of the Labor Code, which shall be amended by the said Bill, the maximum fine that could be applied to the employer is of RON 3,000/ EUR 630, irrespective of the number of employees who worked overtime or the number of overtime hours performed in breach of the conditions provided by law.
In the memorandum explaining the reasons for the Bill, it is mentioned that, according to the European Working Conditions Survey (EWCS) data for 2016, over 35% of Romanian employees work more than 40 hours per week (above the European average – 23%), and such overtime work is affecting the personal and family lives of employees.
As there is currently no correlation between the amount of the fines and the number of overtime hours performed/the number of employees who worked overtime, the legislator is of the opinion that the application of a fine of up to RON 3,000/ EUR 630 maximum to employers with possibly thousands of employees, and where possibly hundreds of thousands of overtime hours are over the legal limit, cannot produce a deterrent effect.
Thus, the amendment seeks to eliminate employer abuses by allowing the Territorial Labour Inspectorate to apply fines between RON 1,500- RON 3,000/ EUR 315 – EUR 630 per each employee for whom the employer does not comply with the overtime work provisions. As an example, in case there are 10 employees who performed overtime either exceeding the time limit or which did not get paid for overtime, the fine could be up to RON 30,000/ EUR 6,315 for the relevant company.
As overtime may be also performed further to an implicit request of the employer it is necessary now that all companies make sure they have specific and clear rules on overtime (how is performed and upon which type of request), within the employee handbook/employment agreement/job description. Also, the records tracking the real working time of the employees should be in place with each employer.
The Bill was sent to the President of Romania for promulgation and will be published in due course in the Official Gazette, having a significant effect on all employers which have employees frequently performing overtime work.