Labour remuneration in Bulgaria
In Bulgaria, the employer is obligated to pay the employee remuneration appropriate to his work performance. The employment contract must contain information regarding the labour remuneration. According to Article 242 of the Labour Code, work performed under an employment contract shall be compensated. The social security contributions are based on the labour remuneration.
The labour remuneration is regulated in Article 23 (2) of the Universal Declaration of Human Rights (UDHR) and in Article 7 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).
Article 48 (5) of the constitution of the republic of Bulgaria from the 12th of July 1991 provides as follows: “Employees and clerks have a right on (...) a minimum wage and a remuneration appropriate to their work performance.”
- the basic monthly remuneration – it is paid for the work performance within one month. Besides, it is the basis for calculating the years of service. The monthly basic remuneration is part of the monthly gross remuneration.
- The monthly gross remuneration – it includes the basic remuneration and the additional remunerations that are contributed for the payment of the social security contributions and the flat tax rate of 10 % made by the employee.
- agreed remuneration – the remuneration agreed upon by the parties in the employment contract or according to Article 107 of the Labour Code.
Calculation of the remuneration
Regarding the calculation of the labour remuneration, there are three significant criteria:
- the duration of the working time,
- the intensity and
- the nature of the performed tasks.
Basically, there are two methods to calculate the labour remuneration:
- Time pay – the labour remuneration is calculated according to the time that has been invested for the work performance. Quality and quantity of the work performance are not taken into account. Regarding regular employment relationships, the time pay is the most commonly used method.
- Payment by results – here the calculation of the labour remuneration is based on achieved results. The payment by results is a personal payment element. Mostly, it is paid in the form of an allowance additional to a regular basic remuneration. Hence, only parts of the remuneration depend on the performance/results and the rest depends on the invested time for the work performance.
*The intensity of the work is calculated regarding the process specifications. These specifications are defined and get modified by the employer according to the normal work intensity (Article 250 (1) of the Labour Code). Before defining or modifying the process specifications, the employer must consider the employees’ opinion. If he does not fulfil his obligation in that regard the labour norms become void.
A minimum wage is defined regarding low-skilled jobs.
- The amount of the minimum wage is defined by the Council of Ministers. The individually negotiated remuneration may not be lower than this defined amount. According to Article 341 of the code of civil procedure, the minimum wage is unseizeable. The compensation in case of incapacity of work is defined according to the minimum wage.
- The provisions regarding the minimum wage are valid for all employees working in Bulgaria.
- The minimum wage is defined as a monthly minimum labour remuneration assuming a normal daily working time and the fulfilment of all working days of the month.
- It is a basic remuneration (meaning that the employer owes it for the performance of the agreed work for the normal duration of the working time under normal working conditions). Additional labour remunerations are added to the basic remuneration.
Additional remunerations, allowances and bonuses
These payments in favour of the employee are made if:
- the employee demonstrates high results and performance,
- the employee has to perform the agreed work under conditions that deviate from the normal working conditions.
Types of additional payments:
- Allowances for the acquired seniority and professional experience (Article 12 of the Regulations regarding structuring and organisation of labour remuneration) – the payment starts from the third year of the employment and is paid for each year of service that has been performed;
- Allowances due to a higher academic degree;
- Allowances for night work (Article 261 of the Labour Code in rel. with Article 8 of the regulations regarding structuring and the organisation of labour remuneration);
- Allowances for overtime (Articles 262, 263 of the Labour Code);
- Public holiday allowances (Article 264 of the Labour Code) – the amount of this allowance may not be lower than twice the normal labour remuneration;
- Allowances for assuming additional tasks related to internal representation, Article 259 of the Labour Code (if an employee assumes another employee’s tasks partly or completely while continuing his own tasks);
- Allowances for assuming additional tasks related to an external representation (regarding additional assumed tasks that must be performed for another employer in another enterprise);
- Allowances at the employer’s discretion.