What undeclared and under-declared work mean, the fines in art. 260 of the Labour Code after Law 239/2025, suspension of activity, tax consequences and a compliance checklist.
Translated from Romanian. This article covers Romanian labour and tax law; the Romanian version is canonical and is updated first.
In the short term, undeclared work looks like a saving: no contract, no contributions, no paperwork. In reality it is one of the most expensive risks an employer can take. Romania’s Territorial Labour Inspectorates (ITM) check employment relationships all year round — through planned campaigns, unannounced inspections and in response to complaints — and since the start of 2026 the fine for a single person working without a contract has doubled. Below you’ll find what “black” (undeclared) and “grey” (under-declared) work mean in practice, what each breach costs, what happens after an inspection and what to check in your company, point by point.
Two things have changed. First: the penalty for putting someone to work without a contract rose, through Law no. 239/2025, from 20,000 to 40,000 lei per person, with a cumulative cap that went up from 200,000 to 1,000,000 lei (we covered the change in our article on labour inspections in 2026). Second: the employee register is now kept exclusively in REGES-Online, so inspectors can quickly compare what has been declared with what they find on site — people at work, actual hours, wages actually paid.
The practical conclusion: there are no longer any “minor” breaches in this area. A single person found working without the legal paperwork can cost as much as their salary for several years.
Undeclared work (“la negru”) is defined by the Labour Code (art. 15¹, introduced by Government Emergency Ordinance no. 53/2017). There are four situations, and any one of them is enough:
Under-declared work (“la gri”) was added to the Labour Code by Government Emergency Ordinance no. 117/2021: the employer pays a net salary higher than the one in the payroll and in the monthly declaration to the tax authority (ANAF). The cash-in-hand difference is not a favour to the employee — it is a breach sanctioned separately.
One detail that matters during an inspection: if someone works for the company without an employment contract but under another type of document (a freelance or service agreement), the inspector looks at subordination — who sets the schedule, who assigns the tasks, who supervises the work. If the relationship looks like employment, it is treated as such, and the employer has to prove otherwise.
Penalties are set by art. 260 para. (1) of the Labour Code. For breaches related to undeclared and under-declared work, the fine applies for each person identified, up to a cumulative cap:
| Breach | Fine per person | Cumulative cap |
|---|---|---|
| Putting someone to work without an individual employment contract (letter e) | 40,000 lei | 1,000,000 lei |
| Contract not registered in REGES by the day before work starts (letter e¹) | 20,000 lei | 200,000 lei |
| Putting someone to work while their contract is suspended (letter e²) | 20,000 lei | 200,000 lei |
| Work beyond the schedule of a part-time contract (letter e³) | 10,000–15,000 lei | 200,000 lei |
| Net salary paid above the declared one — “grey” work (letter e⁵) | 8,000–10,000 lei per employee | 100,000 lei |
The amounts above are those in force on the date of publication (the first row, after Law no. 239/2025). Fine levels change from time to time, so check the consolidated version of the Labour Code before making a decision.
The fine is not the only consequence. For the first three situations in the table (no contract, not registered in REGES, work while the contract is suspended), the inspector can order the suspension of activity at the workplace where the breach was found. Activity can only resume after the employer pays the fine and remedies the shortcomings — that is, concludes and registers the missing contracts.
The next step is what turns an administrative problem into a criminal one: resuming activity without meeting the conditions set by the inspector is a criminal offence, punishable by 6 months to 2 years in prison or a criminal fine. The offence is not the undeclared work itself, but ignoring the measure ordered by the inspector — a difference that matters when someone is tempted to “reopen the next day”.
The Labour Code penalties do not close the matter. For the period in which the person worked undeclared or under-declared, the tax obligations — social contributions and income tax — are established retroactively, and ANAF applies interest and late-payment penalties under the Fiscal Procedure Code. In other words, the “saving” made on contributions is paid anyway, with interest, on top of the fine.
For the employee, the cost is harder to see at the time but larger in the long run. Without a declared contract, the person has no:
Use the list below as a quick internal audit. Each point corresponds to one of the breaches in the fines table. For the full list of documents the inspector may ask for, by group, see the documents needed at an ITM inspection.
Most of the breaches above don’t come from bad intent, but from the lack of an up-to-date record: a contract registered a day too late, a part-timer who stayed “just today” beyond their hours, a return from leave that was never registered. A digital HR system closes exactly these gaps.
In Workly, time tracking records the start and end time for each person in real time, and hours beyond a part-time contract’s norm stand out immediately. Employment contracts are generated from the same application, and the REGES-Online integration is in preparation; leave and suspensions are visible in both time tracking and payroll. During an inspection, the record can be exported per employee or per site in a few minutes.
Atypical situations — postings, special contracts, long suspensions, borderline freelance relationships — are worth analysing case by case with an employment law specialist.
Informational article, accurate at the date of publication. Not legal advice. Fine amounts and deadlines may change through later legislation — always check the version of the Labour Code in force or consult a specialist.
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