Romania: Changes in the Law that Incentivises Employers for Hiring Unemployed Individuals
Government Ordinance No. 11/2026 has made some important changes regarding the rules for awarding financial incentives to employers that are hiring vulnerable unemployed individuals or are creating jobs in unfavoured geographical areas.
The age threshold for defining long term unemployment was changed and according to the new rules an individual is considered to be in a long-term unemployment situation if they were not employed for a period of 12 months if they are above the age of 30 years or for a period of 6 months if they are under the age of 30 years (previously the age threshold was the age of 25 years). In addition, the age for individuals being considered in a vulnerable category and qualifies their new employer for financial incentives was raised from 45 years to 50 years.
Employers that hire individuals over the age of 50 years and conclude open ended individual employment agreements with them can qualify to receive a monthly financial incentive of RON 2.250 (a little more than EUR 440 or USD 500) for a period of 12 months. However, if the employer has the initiative to dismiss the employee during the first 18 months of employment, all the amounts received as part of this financial incentive will have to be returned. Concerns have been raised regarding the potential of exploiting this system by convincing the employees to resign after the financial incentive period ends, by being offered employment in similar conditions in a connected company in order to artificially extend the duration of the financial incentive for the same individual. The unemployment authority has stated that such cases, even if not prevalent, are easier to identify and prevent due to a new tracking system in place since 2025.
Similar financial incentives are granted to employers that hire mothers that are responsible for the care of more than 3 children under the age of 18 years, individuals that have criminal convictions, or individuals with disabilities.
