Seven in the morning, on a building site in Brașov county. Two labour inspectors and a team from the Anti-Fraud Directorate (DGAF) find eight people at work: five have a contract, three do not. And one of those with a contract on the minimum wage, questioned separately, says he takes home „in hand” 4,500 lei. By lunchtime, the employer has a report imposing a fine of 120,000 lei, the activity has been shut down, and a problem that, over the following months, will move from the Labour Inspectorate to ANAF and, in certain circumstances, to the prosecutor's office.
Two different things, with different penalty regimes and different criminal risks: the first means the person does not exist on paper; the second, that he does exist, but at a false value.
Undeclared work (Article 15¹ of the Labour Code) covers four acts: taking someone on to work without concluding the individual employment contract in writing, at the latest by the day before work begins; taking someone on to work without submitting the terms of the contract to the general register of employees, within the same time limit; taking on an employee while his contract is suspended; and taking someone on to work beyond the working hours set out in a part-time contract.
Underdeclared work (Article 15²), the „envelope wage”, „grey-market work”, is paying a net wage higher than the one shown in the payroll records and in the monthly return on contributions, income tax and the nominal record of insured persons, Declarația 112 (D112).
The first piece of information many employers have not updated: Legea nr. 239/2025, published in the Official Gazette on 15 December 2025, doubled the base fine and raised the aggregate cap fivefold. Previously, point (e) provided for 20,000 lei per person, with a cap of 200,000; for a company with ten people without a contract, the difference is between 200,000 and 400,000 lei.
40,000 lei for each person identified, up to an aggregate cap of 1,000,000 lei. This is the act that also triggers a shutdown of the activity.
20,000 lei per person, capped at 200,000 lei, for each of the two acts. They are independent of each other: the contract may exist while the submission to the register is missing.
10,000 to 15,000 lei per person, capped at 200,000 lei. A 4-hour contract with 8 hours of actual attendance falls here.
8,000 to 10,000 lei per employee, capped at 100,000 lei, for a net wage higher than the one shown in the records. The only act excluded from the option to pay half the fine.
Two mechanisms need to be understood. Paying half the fine within 48 hours, by way of derogation from the general rules on administrative offences, for the acts under points (e) to (e³); the inspector must mention this option in the report, and point (e⁵) is not on the list. And shutting down the activity, ordered on a finding of the acts under points (e) to (e²), for the workplace inspected: work can resume only after the fine has been paid, the deficiency has been remedied, and documents proving payment of the contributions and tax owed for the undeclared period have been produced.
Note: For most SMEs, shutting down the activity is more serious than the fine: a stopped building site means contractual penalties, missed deadlines and, sometimes, the loss of the contract. And the condition for resuming, proof of payment of the contributions for the undeclared period, forces you to quantify and pay retroactively, that is, to produce the very document ANAF will later use. Do not sign the report just „to get it over with quickly”: the entries in the objections section are the only ones that survive. The time limit for challenging it is 15 days from handover or communication.
This is the most widespread belief in the market. Article 264(4) of the Labour Code did, indeed, make it a criminal offence to take on more than 5 people to work without an individual employment contract, punishable by imprisonment from 3 months to 2 years or a fine. The provision was repealed by OUG nr. 53/2017, with effect from 7 August 2017, for pragmatic reasons: the cases almost invariably ended either with a decision not to open criminal proceedings or with acquittals. In exchange, the administrative fines were substantially increased, and they have kept being increased since.
What remains today in Article 264 are three offences, none of them „undeclared work” as such: paragraph (1), repeatedly setting wages below the minimum gross basic wage; paragraph (2), unjustified refusal to present the statutory documents to the competent authorities, for the purpose of obstructing checks, within 15 days at most of receiving the second request; paragraph (3), obstructing, in any form, the competent authorities from entering the premises, enclosures, spaces, land or means of transport used by the employer.
One counterintuitive consequence stands out: the reaction to an inspection can be a criminal offence, while the act being inspected is not. An employer who blocks the inspectors' access or systematically refuses to present documents turns an administrative offence into a criminal case. This is the easiest mistake to avoid and the one most often made, which is why the rules of conduct in the analysis on what to do during a surprise inspection apply just the same to a visit from labour inspectors: an internal procedure setting out who receives the inspectors, who has access to the documents and who calls the lawyer is worth more, on the day of the inspection, than any legal argument. The rest of the rules of conduct, in the tax inspection has begun: the first decisions.
Undeclared work is no longer a criminal offence under the Labour Code, but that does not mean it can never be one at all. The gateway into criminal law is the tax evasion statute, through two separate provisions.
Undeclared wages: Article 9(1)(b). Failing, wholly or in part, to record in the accounting records or other statutory documents the income obtained, for the purpose of evading tax obligations, constitutes tax evasion (evaziune fiscală). This is the classification that technically fits both undeclared work and the envelope wage: the income actually paid does not appear in the payroll records, does not reach the Declarația 112, and the tax and contributions are not declared. The element the prosecution must prove, and on which the defence is built, is the purpose of evading tax required by Article 9(1)(b): it is not presumed from the mere existence of the difference, it has to be proved, and the repeated, systematic nature of the payments is exactly what the prosecution will rely on. How much the resulting figure matters is set out in the thresholds and aggravating factors that change the sentence.
Wages declared but not paid: Article 6¹. A distinction that many materials on the market get wrong. The old Article 6 of Legea nr. 241/2005, on withholding and failing to pay over taxes withheld at source, was declared unconstitutional by Decision nr. 363/2015 of the Constitutional Court (CCR) and repealed on 21 August 2015. The act fell outside criminal protection for more than six years, until, through OUG nr. 130/2021, it was reintroduced as Article 6¹, in force from 1 March 2022: withholding and not paying, or collecting and not paying, within 60 days at most of the payment deadline, the taxes and/or contributions listed in the schedule to the law, is punishable by imprisonment from 1 to 5 years or a fine.
The practical dividing line: if you did not declare the wage → Article 9(1)(b), with the purpose of evasion to be proved; if you declared it correctly but did not pay more than 60 days after the due date → Article 6¹, where the discussion is not about concealment, but about non-payment. Paradoxically, for the employer who declares everything and pays late, the provision applies more automatically than for one who does not declare at all. When the move from inspection to the prosecutor's office happens, in the analysis on the moment a tax audit turns into a criminal case.
The Labour Inspectorate, alone or in a joint team with DGAF: who is working, since when, on what basis. A joint team turns the finding into a tax case on the same day.
Statistically, the most frequent source. An employee dismissed after a dispute, or one who realises his pension is being calculated at the minimum, has a direct interest and a simple means, and usually brings evidence: messages, spreadsheets, witnesses.
The employee register versus the payroll records versus the Declarația 112: the cross-checking is automated. And minimum-wage income alongside disproportionate purchases will bring you into ANAF's risk analysis for individuals.
A note on the register. Since 2025, the employee register has moved from Revisal to REGES-Online (HG nr. 295/2025). The position is not finally settled: the decision was set aside at first instance by the Constanța Court of Appeal, in April 2026, on the action brought by UNELM and a large number of employers. The judgment is not final, the appeal is pending before the High Court of Cassation and Justice (ÎCCJ), and in the absence of a suspension the instrument continues to apply. In practice: the reporting duties are performed as they stand, and failing to meet them is sanctioned as it stands.
A company with 5 employees declared at the minimum wage, each receiving an extra 3,000 lei net „in an envelope”, every month, for 3 years (36 months).
From the gross amount, CAS at 25% and CASS at 10% are withheld, and the 10% tax is applied to the remaining base (65% of gross); the net is therefore around 58.5% of gross. For 3,000 lei net: gross ≈ 5,128 lei.
Per employee: CAS + CASS + tax ≈ 2,128 lei; the labour insurance contribution (2.25%) ≈ 115 lei. Total ≈ 2,243 lei per month. Over 36 months and 5 employees: principal ≈ 404,000 lei.
Interest of 0.02% per day and penalties of 0.01% per day, around 11% a year; at an average age of 1.5 years ≈ 66,000 lei. On top of this comes the non-declaration penalty of 0.08% per day, capped at the amount of the principal, which can, on its own, be the largest item in the assessment.
If the people are also found without a contract: 5 × 40,000 = 200,000 lei. Total, order of magnitude: over 650,000 lei, plus the criminal risk and the shutdown of the activity.
As a rule, the recalculation can go back 5 years, the limitation period. A technical but valuable point of defence: the method used in Step 1. Treating the amount paid in cash as net and „grossing it up” substantially increases the base; if the evidence does not establish beyond doubt that the parties agreed on a net amount, treating it as gross is at least equally plausible, and it noticeably reduces the liability. This is a discussion to be had through expert evidence, not through statements.
The probability of an inspection is no longer low. On 7 July 2026, the Labour Inspectorate published the results of the campaign run between 2 and 22 June 2026 targeting employers operating through digital platforms, ride-hailing, e-commerce and courier services: 1,087 inspections, 2,053 people found working without proper documentation, and fines of 23.3 million lei. At the same time, the national campaign in construction is running between 1 April and 7 December 2026, and since the start of the year more than 7,100 people have been identified working in breach of labour legislation, most of them in agriculture, construction, HoReCa and retail.
Yes, it can be done and, in almost every case, it is significantly cheaper than an inspection: conclude the contracts, declare correctly from now on, and file corrective returns (declarații rectificative) for the past, paying the principal and the late-payment charges. This avoids the per-person fine, the shutdown of the activity and the non-declaration penalty, which applies to liabilities established by the tax authority, not to those you declare yourself, and, above all, it radically changes your position in any discussion about the purpose of evasion.
On top of this comes the mechanism in Legea nr. 126/2024: if, within 30 days of the end of an inspection that identified a loss of up to the equivalent of 1,000,000 euros, the loss increased by 15%, plus interest and penalties, is covered in full through actual payment, the act is not punished, and the authorities do not refer the matter to the criminal investigation bodies. The percentage rises as the case moves forward, 25% during the criminal investigation, 50% at the preliminary chamber stage or at trial, 100% on appeal: the details, in the analysis on covering the loss and the grounds for non-punishment under Legea nr. 126/2024.
The link with PFA recharacterisation. An employer who „solves” the problem by moving people onto services contracts with a PFA (persoană fizică autorizată), the authorised sole-trader form, has not solved anything, he has merely changed the shape of the risk. ANAF can recharacterise the relationship as dependent activity, on the basis of the 7 criteria in the Tax Code, with a minimum of 4 being enough, recalculating the same contributions and taxes, plus late-payment charges. This is the second most frequent inspection topic for SMEs, alongside economic activities carried out by individuals.
Note: Regularisation is not something to improvise. Filing corrective returns without a prior analysis can amount to a documented admission of the act, handing the tax authority exactly the calculation it needed, including for a possible referral to the criminal investigation bodies. The order of the steps, the period covered, the way the base is reconstructed and the timing of the filing are decisions to be taken with prior advice, not afterwards.
No. The provision, Article 264(4) of the Labour Code, was repealed by OUG nr. 53/2017, of 7 August 2017. Today, taking someone on to work without a contract is an administrative offence: 40,000 lei per person, capped at 1,000,000 lei in aggregate, plus a shutdown of the activity. The criminal risk exists, but on a different basis: tax evasion through failing to declare wage income (Article 9 of Legea nr. 241/2005), where the purpose of evasion has to be proved.
It can be. As an administrative offence, it is underdeclared work, Article 15² and Article 260(1)(e⁵), with a fine of 8,000 to 10,000 lei per employee, capped at 100,000 lei. Criminally, it can fall under Article 9(1)(b) of Legea nr. 241/2005, if the purpose of evasion is proved. It is not automatic: the classification depends on the evidence, on the systematic nature of the payments and on the size of the loss.
For the acts under Article 260(1)(e) to (e³), yes, and the inspector must mention this option in the report. For point (e⁵), the envelope wage, this facility is not provided. Paying the fine does not remove the duty to remedy the situation, nor the retroactive tax liabilities, and resuming activity after a shutdown requires proof of payment of the contributions for the undeclared period.
The risk drops substantially: you avoid the per-person fine, the shutdown of the activity and the non-declaration penalty. You remain liable for the principal and the late-payment charges for the regularised period, and your position in the discussion about the purpose of evasion changes radically. Regularisation must, however, be prepared with prior advice; a corrective return filed without care can become exactly the evidence the prosecution needed.
Informative material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts. Persons under investigation are presumed innocent until a conviction becomes final.
If the matter involves a criminal complaint or an open file, the related analyses are grouped under economic criminal law. For how the defence is built, see tax evasion defence.
Time limits run from the date of communication. A first conversation clarifies what is being alleged, what you need to substantiate and how the defence is built, before an estimate becomes a tax assessment decision.