How to Hire Remote Employees In 

Moldova

The Basics

Currency
Moldovan leu (MDL)
Employer Taxes
18%
Payroll Frequency
Monthly
Official Language
Romanian

Employment in 

Moldova

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Moldova

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Moldova can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Moldova, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Moldova.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Moldova is not the same as paying workers in your own country. Employees have to be paid using Moldova’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Moldova

 Specific Information

Working Hours

The standard work in Moldova is 40 hours but it sometimes reduced by collective bargaining agreement terms. If the employees who is working in a hazardous environment where hazards cannot be eliminated through occupational health and safety measures may have their workweek reduced to as little as 36 hours.

Overtime

In Moldova, overtime laws are complex and can depend on the specific circumstances and the employee. Mostly, overtime is permitted only in the event of an emergency.

An employer may require overtime without the employee’s consent in a few emergency situations, but the employee must consent to the overtime in other urgent situations, and in non-urgent situations, both the employee and the employee representatives must give their consent.

Overtime work is limited to 120 hours per year, although this amount may be increased to 240 hours by a collective bargaining agreement in certain cases.

Employees under 18 years old, pregnant women and workers whose doctors have indicated they are not fit to do so may not work overtime.

Employees who work 120 or more hours at night in a six-month period must be examined by a doctor at the employer’s expense. Night work is prohibited for certain employees.

Payroll Tax

Employer

Employer

  • Social security

Minimum Wage

The minimum wage in Moldova is 1900 Moldovan lei a month ($96) for for private sector workers and $1000 lei per month ($50) for public sector workers.

Payroll

Pay Cycle

Moldova employees expect to be paid monthly on the 25th of each month.

13th Salary

No Info.

Leave

Paid Time Off (PTO)

In Andorra, employees typically receive 28 days of paid vacation each year.

Public Holidays

There are 11 public holidays.

Sick Days

Employees are entitled to a specific amount of sick days.

A proper medical certificate must be provided to the employer by the employee. During the first five days of sick leave, the company compensates the employee, and from the sixth day on, a social security payment is provided.

Maternity Leave

Female employees are entitled to:

  • 70 days of leave before her due date (112 days if she is expecting three or more children;and
  • 6 days following the birth of her kid (70 days if she gives birth to two or more children)

Employees are also eligible for partially paid maternity leave until the child is 3.

Paternity Leave

The father receives a portion of the female employee's maternity benefit either after the kid is born or after the female employee returns to work.

Beginning six weeks after the birth, the child's father, or the mother's spouse or partner, has the option of taking the balance of the mother's maternity leave.

Parental Leave

The father is entitled to 14 days of paternity leave when his child is born. He may request the leave within 56 days of the birth and provide a copy of the birth certificate.

Other Leave

No Info.

Marriage Leave

No Info.

Bereavement Leave

Employee are entitled to bereavement leave, if the employees  who have worked for an employer for a continuous 6 month period:

  • 3 days’ bereavement leave on the death of a spouse or partner, parent or parent-in-law, child, brother or sister, grandparent, or grandchild;and
  • 1 day’s bereavement leave on the death of any other person, if the employer accepts, having regard to relevant factors, that the employee has suffered a bereavement as a result of the death.

Termination

Termination Process

Employers must have valid legal grounds and provide the requisite notice of termination before terminating an employee.

Notice Period

The employer and employee agree otherwise, a written notice must be given at least 30 days prior to the date of termination of employment.

Severance Pay

The Severance Pay should not be less than three months' worth of average monthly earnings free of taxes and contributions in the preceding semester.

Probation Period

Probation period is shall not exceed 6 months.