Nina Boteva Law Office

Legislative changes were adopted in the Labor Code

At the beginning of February 2023, legislative changes were adopted in the Labor Code (LC) regarding the amount of the minimum salary. The changes relate to tying the amount of the minimum salary for the country to the reference values under the Directive of the European Parliament and the Council on adequate minimum wages in the European Union. It has been proposed to introduce and guarantee a lower threshold of the minimum wage for the country, the latter will be determined by the 1st of September of the current year – for the next calendar year, in an amount not less than 50 percent of the gross average wage for the country for the period of 12 months preceding the calculation.

After the European Commission has proposed the Directive in October 2020 as part of its commitment to a more social Europe, and after lengthy negotiations in the European Parliament and between Member State governments, a final text was agreed in June this year, and on 4 October 2022 EU ministers approved the "Directive of the European Parliament and of the Council on Adequate Minimum Wages in the European Union".

The Directive requires Member States that have a statutory minimum wage to introduce processes to ensure that it is 'adequate'. The Directive covers not only minimum wages but also collective bargaining schemes and requires Member States to draw up national action plans to increase labor force coverage with collective bargaining if it is below 80%. In Bulgaria, collective bargaining is significantly below 80%, which means that tools (including legal) will have to be sought to increase its scope. It also obliges Member States to introduce control mechanisms to ensure that workers have effective access to statutory minimum wages and to ensure that they have the right to collective bargaining.

The Directive provides that the minimum salary should be regularly monitored so that it will be reviewed if circumstances change, for example due to inflation. For the purposes of assessing the adequacy of minimum wages, the Directive proposes that Member States use reference values of 50% or 60% of the average gross wage.

A two-year process is foreseen for the transposition of the Directive into the national legislation and implementation by the Member States. To the extent that rising prices and inflation effectively 'reduce' minimum wages, faster implementation of the Directive by Member State governments is needed.

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