Hiring Talent And Managing Payroll In Bulgaria

Agreements

• Chapter V, Section I of the Bulgarian Labour Code emphasizes all the legal provisions regarding employment contracts.
• Article 66 of the Labor Code stipulates that each employment contract must contain party identities, place of work, the employee's job description, agreed-upon terms specific to the employer and employee, basic and paid annual holidays, additional paid holidays, a termination period, concluding date of the agreement, the start date of actual performance, duration of a work day and work week, employer's salary, and supplementary salary.
• Employment agreements may not exceed 3 years (Article 68 of the Labor Code).
• Both parties receive copies of the contract, and the employee has to sign the agreement physically.
• The agreement must be filed with the Bulgarian Tax Office within 3 working days.
• Employment contracts for trial periods under Articles 70 and 71 of the Labor Code aid employers in confirming if the employee is a right fit.

Onboarding Process

• Bulgarian onboarding processes aim to ensure recruits feel well-prepared, informed, and trained to make the first few weeks as comfortable as possible.
• Processes specific to the company may include paying for a hotel room for the first few days/ week, arranging and paying for the flight, and conducting ice-breaking activities with employees.
• Onboarding requires you to possess certain documents carrying information such as your name, address, educational and qualification certificates, and previous employment certificates. The employees must have ID cards, passports, driving licenses, and other such documentation.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

• Employees aged 18-40 get their check-ups every five years, and aged 40 and up every three years.
• The employer must conduct healthcare training during work hours.
• All health documentation must be kept in records for at least five years.
• Numerous employers supply health insurance to their employees, in addition to supplying medical facilities and specialist examinations.
• Multisport cards are issued for the benefit of employees at the employer's expense. Food vouchers and meals are provided for by the employer as well.

Working Hours and Overtime

• Work hours: 8 hours per day in a 5-day work week; 40 hours per week. Maximum duration including overtime is not to exceed 12 hours in a 5-day work week; 56 hours per week.
• Break: 1 unpaid meal break of not less than 30 minutes. Section 152 of the Labor Code stipulates unquestioned daily rest for 12 hours.
• Overtime: Maximum 30 hours of daytime work and 20 hours of night work in 1 month; 6 hours of daytime work and 4 hours of night work in 1 week; 3 hours of daytime work and 2 hours of night work in 2 consecutive working days.

Social Security

Taxes for Employees

Termination

• If the termination is decided by the mutual agreement of both parties, then it can be done easily, by communicating the same in writing.
• If the employee is associated with any trade union, then the employer has to seek the permission of the union, before they terminate any employee.
• Significant issues are faced by employers when it comes to the termination of any form. There are many specific types n of terminations that are mentioned in the employment laws or the labor code.
• Here are some possible reasons for the termination:

  • less workload
  • organization getting closed, in which the employee is working
  • reduction in the working positions
  • employee lacks the necessary skills to perform his/her duties
  • lack of required education and professional qualification needed to perform the duties
  • employee's refusal to relocate to another location or town and more

Severance Pay

• Severance pay is a one-time payment upon termination, dependent on the type of termination (for example, termination by the employee, mutual agreement, without cause, cause within an indefinite term, and fixed term agreement).
• The standard maximum severance pay is one month's salary for dismissal on specific grounds (partial closure or closure of establishment, staff cuts, layoffs).
• The standard severance pay is two months' salary for dismissal due to disability/ health hazards to employees (given that the individual has been employed for at least five years, and has not received severance pay in these last five years).
• For individuals having worked with their employer for more than 10 years, severance pay amounts to six months' salary.
• For people attaining the entire length of service and have crossed their retirement age, the standard severance payment is two months' salary.
• When termination is a result of issues against payment of compensation by mutual agreement (by the employee's initiative), severance pay amounts to at least four months' salary.

Employees or Contractors

• Employee/ Worker: Bulgarian Labor Law applies here only. Employers are the economically stronger party and employees are financially dependent on them. There are three classifiers of workers (1st, 2nd, and 3rd categories); the third category being the most common and standardized.
• Independent Contractors/ Self-Employed: Civil and Commercial laws govern this sphere. Individuals providing services to an employer and are in a contractual relationship with the employer. They are not a part of their labor force. These include self-employed professionals, freelancers, and registered company executives.
• Failure to correctly classify a working relationship results in fines and penalties, legal issues, and the offending party is required to pay workers for any lost benefits/ wages.

Final Words