Bulgaria’s recent economic growth has been moderate, driven by exports and foreign direct investments. As of 2022, Bulgaria's GDP was estimated at US$90.35 billion. Some major industries in Bulgaria are manufacturing, agriculture, mining, and services. The country also boasts a well-educated and skilled workforce, particularly in IT, manufacturing, and engineering.

These factors make Bulgaria one of the most sought-after destinations in Europe for global business expansion. 

If you’re considering expansion in this country, here’s a comprehensive guide detailing the key employment laws in Bulgaria that govern labor relations. Also, learn how an employer of record (EOR) can simplify your international hiring plans.

Contractual Agreements 

Contractual agreements in Bulgaria are covered under the Labor Code. As per the Labor Code, the following elements must be included in an employment agreement:

• Place of work
• Job title
• Duration of the employment contract
• Date of contract commencement and implementation start date
• Stipulated amount of basic, extended, and additional paid annual leave
• Equal notice period for termination by both parties
• Remunerations 
• Length of the working day/week.

Additionally, under the contract employment law in Bulgaria, all employers must provide the worker/employee with a signed copy of the concluded employment contract.

Types of employment contract 

Under the Bulgaria labor law, there are three main types of employment contracts.

Open-ended employment contracts

• This is an agreement for an indefinite period.
• All labor contracts are generally considered to have an indefinite duration unless otherwise agreed upon by the parties.
• Under the labor law in Bulgaria, an open-ended employment contract cannot be converted into a fixed-term contract, unless there is explicit written consent from the worker or employer for such a change.

Fixed-term contracts

• Employment contracts can be established for a specific period, not exceeding three years, unless otherwise stipulated by law.
• These contracts are typically used for temporary or seasonal tasks and activities.
• In exceptional circumstances, a fixed-term contract for a minimum period of one year may be concluded for tasks or activities that are not temporary or seasonal.

Employment contracts with a trial period

• This type of contract is established when work demands an assessment of the employee’s suitability.
• These preliminary agreements specify whether the eventual contract will be fixed-term or open-ended.
• The trial period lasts for a maximum of six months, accounting only for actual work time.

Obligations and rights for both parties

Employers and employees in Bulgaria must adhere to all the regulations outlined in the Labor Code to foster a harmonious and productive working environment. This includes ensuring compliance with the working conditions, leave policies, and termination procedures. 

Employers are also advised to stay aware of the common global HR compliance mistakes to avoid hefty legal penalties. 

Working Hours and Overtime

The Bulgarian Labor Code addresses ‘Working Hours and Breaks,’ including the duration of the workday and workweek and regulations on overtime. 

Regular working hours

• The labor law in Bulgaria mandates a 5-day work week, with a standard daily duration of up to 8 hours and a weekly duration of up to 40 hours. 
• The typical night time working hours are 7 hours, while for the entire week, it is capped at 35 hours.

Overtime regulations and compensation

• Overtime work is generally prohibited according to Article 143 of the Criminal Code. However, exceptions may exist (Article 144 of the Labor Code).
• The total duration of overtime work in one calendar year for a single employee must not exceed 150 hours.
• Under a collective labor agreement, the duration of overtime work may be extended but not beyond 300 hours in a single calendar year.
• The compensation rate of overtime work for employees includes,

Minimum Wage and Compensation

According to the labor law in Bulgaria, the basic wage is disbursed in cash. The frequency of payment of the remuneration is usually determined through mutual agreement between the employer and the employee. When no such agreement exists, remuneration is typically paid bi-monthly, consisting of an advance payment and a final settlement.

The minimum wage rate in 2024

• As of January 1, 2024, the minimum wage in Bulgaria is BGN 933.00 per month and BGN 5.58 per hour. 

Factors affecting wage determination 

Wage determination in Bulgaria is influenced by multiple factors, such as:

• Cost of living
• Level of wages and income in the country
• Economic development
• Productivity and 
• Level of employment and relevant living standards of other social groups.

Employee Benefits and Social Security

The National Social Insurance Institute primarily governs social security schemes and employee benefits.

Statutory benefits

Family benefits

• Family allowances are available in both cash and in-kind.
• They can be issued as one-time payments or every month. 
• Some of the many benefits covered under family allowances include maternity, paternity, and family child benefits.

Health benefits

• Governed by the National Health Insurance Fund, these comprise long-term care benefits, healthcare, and sickness benefits. 

Incapacity benefits

• Incapacity benefits in Bulgaria provide crucial financial assistance to individuals unable to work due to illness or disability.
• It includes persons with disabilities, temporary incapacity to work, accidents at work, and occupational diseases. 

Old-age and survivor’s pension

• In Bulgaria, individuals can access a social pension upon reaching 70, provided certain conditions are met.
• Employees are also entitled to survivor’s pension, which includes a one-off benefit in the event of the death of an insured family member and a supplement from the pension of a deceased husband/wife.

Unemployment benefits

• These benefits can be accessed by individuals who have contributed to the unemployment fund of the General State Insurance Fund for a minimum of 12 months within the 18 months preceding their unemployment.
• The maximum benefit that can be availed under this scheme was set at BGN 85.71 per day in 2023.

Additional perks and benefits

Social benefits

• This is a form of financial assistance provided to low-income individuals at risk of poverty.
• It includes monthly benefits, one-off benefits, rent allowances, and heating allowances. 

Social security contributions and requirements

• The total national insurance contribution rate varies between 32.7% to 33.4%.
• Employers contribute 18.92% to 19.62%, while employees contribute 13.78%.
• The combined rate for social security contributions ranges from 24.7% to 25.4% (employees 10.58% and employers 14.12% to 14.82%).
• Health insurance contributions stand at a fixed rate of 8%, divided between 4.8% payable by employers and 3.2% by employees.)

Vacations and Paid Time-Off

In Bulgaria, the Labor Code regulates vacation entitlement and unpaid leave policies. 

Annual leave entitlement

• Every employee in Bulgaria with at least four months of work experience is entitled to paid annual leave.
• The minimum basic annual paid leave should not be less than 20 days.

Public holidays and special leave

The national holidays in Bulgaria are:

• New Year’s Day
• Labor Day
• St. George’s Day
• Day of the Sainty Brothers Cyril and Methodius, of the Bulgarian Alphabet, Education and Culture and of Slavic Literature
• Bulgarian Unification Day
• Bulgarian Independence Day
• National Awakeners Day
• Christmas Eve
• Christmas

Leave for fulfilling civic and public duties

• Marriage: Two working days
• Blood donation: Two days
• Death of a parent/spouse/child/sibling/ parent of the spouse: Two days

Leave during active duty in the voluntary reserve

• Under the labor law in Bulgaria, employees whose active duty in the voluntary reserve extends beyond 25 calendar days are entitled to two unpaid leaves before departure and an additional two days following their return.
• The same applies to fixed-term service in the voluntary reserve.

Leave of absence for trade unionists

• The labor laws of Bulgaria guarantee 25 hours of leave for one calendar year for part-time members of central, branch, and territorial management of trade union organizations.

Leave in case of temporary incapacity for work

• Employees are entitled to leave due to temporary incapacity for work due to general illness, occupational diseases, and occupational accidents, among other reasons. 
• The health authorities authorize these leaves. 

Leave for pregnancy and childbirth

• Under the employment laws in Bulgaria, employees are entitled to 410 calendar days of paid maternity leave, with 45 days allocated before birth.

Childcare leave

• Employees get paid childcare leave in Bulgaria.

Leave for adopting children

• A female employee who adopts a child aged two or older is entitled to leave for 365 days from the day of receiving the child for adoption, but not beyond the child’s fifth birthday.

Leave for nursing

• Under the labor laws of Bulgaria, employees are entitled to leave for nursing and feeding a small child.

Leave for raising two or more children 

• Paid leave is provided to employees for raising two or more children.

Leave for raising a child up to the age of eight.

• Each employed parent (adoptive parent) has the right to request up to six months of unpaid leave for child-rearing purposes until the child turns eight.
• Additionally, each parent can use up to five months of the other parent’s leave with their consent.

Study leave

• Under the labor law in Bulgaria, employees are entitled to 25 days of paid study leave for each academic year.

Unpaid educational leave

• Exam preparation and attendance: 20 days per academic year
• Entrance, matriculation, or state exams: 30 working days.
• State exams, including thesis or project defense in higher education institutions: Four months.
• Dissertation preparation and defense by part-time or independent doctoral students: Four months.

Leave for entrance exam in educational institutions

• For secondary school applications, workers are entitled to six working days of paid leave
• For higher education or doctoral studies, 12 working days of leave are granted.

Termination and Severance 

When concluding the employment relationship, employers must provide a termination order or another official document confirming the termination. The employer must notify the appropriate Tax Directorate of the National Revenue Agency within seven days of ending the employment contract.

Grounds for termination

Some of the common grounds based on which an employer can terminate an employment contract include:

• Closing part of the enterprise or reducing the staff
• Reducing the volume of work
• When work is stopped for more than 30 days
• Absence of qualities for adequate performance of work
• Lack of necessary educational or professional qualifications for the work performed
• Employees refuse to follow the employer’s enterprise when it is relocated to another community or locality

Notice period and severance pay 

• For an employment contract of indefinite period, the notice period is typically 30 days unless the parties have agreed on a more extended period, not exceeding three months. 
• For fixed-term employment contracts, the notice period is three months. 
• There is no statutory severance pay in Bulgaria except in special circumstances.
• When employment is terminated due to illness for an employee with at least five years of service, they are entitled to receive two months’ gross remuneration.
• Upon termination, after the employee becomes eligible for a pension, they are entitled to two or six months’ pay for a job tenure of 10 years.
• Not more than one month’s salary is provided following any individual or collective dismissal on economic grounds.

Discrimination and Equal Opportunity

In Bulgaria, various legislations, such as The Constitution of the Republic of Belgium, The Social Security Code, and The Discrimination Protection Act, prevent discrimination and ensure equal treatment of men and women. Employers must adhere to all these regulations to avoid any legal consequences. 

Prohibitions against workplace discrimination 

• Article 8(3) of the Labor Code prohibits discrimination in the workplace based on nationality, origin, sex, and age, among others.

Health and Safety Regulations 

• The Health and Safety at Work Act lays down the rights and obligations of the state, employers, and employees to ensure a safe and healthy workplace.

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FAQs

Q1: What are the working conditions in Bulgaria?

A1: Working conditions in Bulgaria are primarily regulated by the Labor Code. Currently, the standard daily working hours for employees consist of eight hours and a weekly duration of up to 40 hours. 

Q2: What is employment like in Bulgaria?

A2: The Bulgarian labor market is dynamic, with local and international companies operating in various industries. Some of the biggest opportunities in the job market can be witnessed in the fields of IT and language services.

Q3: What are the rules for termination of employment in Bulgaria?

A3: According to the labor laws of Bulgaria, employers must send a termination order or an official document confirming the termination before concluding an employment contract.

Q4: What is the notice period in Bulgaria?

A4: The notice duration varies depending on the type of employment contract. The notice period may range from 30 days to three months if it is an indefinite-term contract. For fixed-term contracts, the notice period is set at three months.