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Bulgaria Labor Laws and Employment Issues

Source: www.investbg.government.bg

February 2006

Working hours: 8 hours a day. A 24 hour rest period is required during a 7-day period.
Annual leave: not less than 20 days.
Retirement age: minimum of 63 for men and 58½ (2006) for women¹.
Minimum monthly gross salary: EUR 82 (BGN 160).
Average monthly gross salary: EUR 167 (Sep 2005).
Social security: A complex system covering retirement, health and unemployment risks and obligations. Side costs to the amount of 23.6 to 24.3% of the gross monthly salary are to the account of the employer.

Type of insurance Paid  by Total%
  Employer (%) Employee (%)  
Health 3.9 2.1 6.00
  • Pension insurance fund
  • 15 8 23.00
  • Sickness insurance fund
  • 2.3 1.2 3.5
  • Employment insurance fund
  • 0.4 to 1.1 0 0.4 to 1.1
  • Unemployment fund
  • 2 1 3.00
    Total 23.6 to 24.3 12.3 35.9 to 36.6

    The above contributions are calculated on the remuneration and other employment income of the employee for the respective month but on not more than the maximum monthly insurance base fixed annually in the Mandatory National Insurance Budget Act. The fixed base for 2006 is BGN 1,400 (around EUR 716). Since January 2003 minimum monthly insurance bases for the main economic activities and groups of professions have been introduced.

    Labor contracts: According to the Labor Code the employment contract may be concluded for an indefinite period of time or, alternatively, as an employment contract for a fixed term. An employment contract is considered to be concluded for an indefinite period unless explicitly agreed and stated otherwise. An employment contract concluded for an indefinite period may not be changed to a fixed-term contract unless explicitly requested by the employee, and stated so in writing.

    1. An employment contract for a fixed term may be concluded:

  • for a definite period no longer than 3 years – upon request in writing by the employee or for execution of temporary, seasonal or short-term work and activities.
  • until completion of some specified work.
  • for substitution for an employee who is absent from work.
  • for a job, which is to be taken through a competitive examination, for the time until it is taken on the basis of the competitive examination.

  • ¹ For women the minimum retirement age is being increased by ½ year annually. There are certain limits set that will no longer be changed: - 60 years for women; the limit will be reached in 2009.

    2. Employment contract for a trial period

    In cases when the work requires the ability of the employee who will perform it to be tested, his final appointment may be preceded by a contract providing for a trial period of up to 6 months. Such a contract may also be concluded in the case when the employee wants to make sure the job is suitable for him. This contract indicates to whose benefit has been agreed the trial period. Prior of the expiration of the trial period, the party to whose benefit it has been agreed may terminate the contract without notice.

    Termination: Employees other than senior management cannot be dismissed without sufficient justification. The employee has the right to sue for damages for unfair dismissal. Certain people cannot be dismissed during absence (e.g. on sick leave, pregnant, nursing mothers, military assignment).

    Notice periods are usually 30 days. If the employee, working under an indefinite-period contract, is dismissed without a notification and there is a sufficient justification by the employer, the employee is compensated by 1 monthly salary.

    If the relation is based on a term contract, the compensation is equal to the amount of the gross salaries to be paid for the rest of the contract time.

    The employer can initiate a dismissal of the employee on “mutual consent” terms. In this case, he has to compensate the employee with at least 4 monthly gross salaries.

    Upon dismissal due to closing down of the enterprise or part of it, staff reduction, reduction of the volume of work and work interruption for more than 15 working days, the employee is entitled to compensation from the employer. The compensation is in the amount of his gross labour remuneration for the period of unemployment but not for more than one month. A compensation for longer periods may be stipulated by a collective contract or by the labour contract.

    Upon termination of the employment relationship after the employee has acquired the right to a pension for insured service and age, irrespective of the grounds for the termination, he is entitled to compensation by the employer in the amount of his gross labour remuneration for a period of two months; where the employee has worked with the same employer for the last ten years of the length of service, the compensation is equal to his gross labour remuneration for a period of six months.

    Employment of foreign persons: All foreign persons that have a permanent residence permit or are granted the right of sanctuary or refugee status can be employed in the same way as Bulgarian citizens. Temporary work permits are issued by the National Office of Employment of the Ministry of Labour and Social Policy. The work permits are issued for a specified time, job and employer. The permit is issued after a request by the employer and is valid for the time of the employment contract but not more than one year. The permission can be prolonged several times but within a three year period. The total duration of the work permit with its extensions could not exceed 3 years, except for managers of companies and branches of foreign companies established on the territory of the Republic of Bulgaria and specialists of foreign companies for exercising control and receiving of contracted production.

    Foreign persons that have an employment contract and a valid work permit can acquire a residence permit in the country for the time of the contract but for no more than one year. The permission for continuous residence can be prolonged if the work permission is prolonged but the maximum period for prolongation of the work permission cannot exceed three years.

    The number of employees who are foreign citizens cannot be over 10% of the total work force.

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