On 22 January 2021 amendments to the Bulgarian Ordinance on the Terms and Conditions of Posting of Workers within the Framework of Provision of Services were promulgated in the State Gazette. To distinguish this type of business travels from those falling out of the scope of the EU legislation (such as assignments that are beyond the framework of provision of services or to third countries, which are subject to different requirements in Bulgaria), herein below we refer to them as ‘postings’, the employees on such assignments – ‘posted’, and the mentioned ordinance – the ‘Posting Ordinance’. The new rules on postings should have been enacted by 30 July 2020, by which date Directive (EU) 2018/957 (the ‘Revised Posting Directive’) had to be transposed. Anyway, this happens 7 months later and the amendments are effective as of 25 January 2021.
Employers and temporary work agencies (‘TWA’) that have ongoing postings by the date the amendments enter into force have a 30-days transition period to bring them in compliance with the new requirements. The transition period therefore expires on 24 February 2021.
Bulgarian law regulates both inbound and outbound postings. As regards outbound postings, observance of the host State posting requirements is of utmost importance to avoid sanctions.
In the brief below, we will outline a summary of the major changes and their impact, viewed from an inbound perspective. For information in regards to the changes for outbound postings, you can read more here.
Inbound Postings to Bulgaria
The rules governing inbound postings to Bulgaria are equally applicable both for EU/EEA and for non-EU/EEA employers, when sending workers to work temporarily in Bulgaria.
The amended Posting Ordinance details the rules on the application of the principle of equal pay for equal work introduced by the Bulgarian Labour Code and discussed in a previous post. More specifically, foreign employers are obliged to ensure to employees, posted to Bulgaria, a basic instead of a minimum salary, as well as all additional labour remunerations.
Bulgaria has a centralised minimum wage-setting system, making it easy to identify the minimum wage. Under the new rules, this will not be exactly the case, as sector-specific basic salary levels may be envisaged in universally applicable CBAs in respective business sector/industry. To identify the proper level of the basic salary due, it should be checked if a CBA applies and, if yes, what is the basic salary level determined there.
The additional components forming part of the remuneration include:
- night-work pay;
- increased pay for overtime work (allowed only in exceptional cases and up to certain limits);
- increased pay for work on Public holidays;
- additional payment in case of internal substitution of an absent employee;
- remuneration in case of non-fulfilment of labour norms for reasons not linked to the employee;
- remuneration in case of stay due to employer’s fault;
- remuneration for performance of other work due to production necessity;
- remuneration in case unsuitable production (output of the work) for reasons not linked to the worker;
- remuneration payable during annual paid leave;
- additional remuneration for relevant professional experience (0.6% on the basic salary for each year of relevant experience, recognised under special rules);
- supplement for a scientific degree (doctor and doctor of science);
- remuneration for staying at the disposal of the employer;
The last three constituent elements are not specifically mentioned by the amended Posting Ordinance, but being of permanent nature and being payable by Bulgarian employers on general grounds, in our view, they should be considered.
All elements above (basic salary + additional labour remunerations) should be considered, when making the gross-to-gross comparison referred to in other publications about the changes in Bulgarian Labour Code and rules on posting of workers. For the purpose of the comparison, amounts paid in reimbursement of travel, board, and lodging expenses should be taken out of the gross remuneration actually paid under Home State requirements.
If a Bulgarian, universally applicable CBA applies, the value of the aforesaid constituent elements should be determined as per the CBA provisions. If no CBA applies, the statutory levels apply.
Broader Scope of Core-Set Rules
The so-called core-set terms of employment are broadened to include, in addition to the current ones (minimum rests, remuneration and overtime pay, maximum working time, etc.), also:
- posted workers’ lodging conditions during the posting, insofar as lodging is ensured by the employer; and
- travel, board and lodging expenses in case a posted employee is re-posted (i.e. to perform work outside the place in Bulgaria, to which he/she was originally posted)
Depending on whether re-posting is to a place in the territory of Bulgaria or abroad, travel, board, and lodging expenses should be covered in the amounts set out in:
- the Ordinance on Business Trips in the country; or
- the Ordinance on Business Trips and Specializations Abroad.
The reference to the latter Ordinance is problematic. It applies to cross-border assignments, which do not constitute posting. In our view, in case of re-posting to an EU/EEA State, the reference should be to the outbound postings rules of Posting Ordinance, not the Ordinance on Business Trips and Specializations Abroad. Hopefully, this inconsistency will be addressed by administrative practices and case-law.
Long-Term Posting, Replacement, On-going Postings
The applicability of core-set terms of employment is expressly limited to 12 months, extendable to 18 months, if necessity arises. To utilise the extension possibility, the posting employer should submit a motivated notification to the Labour Inspectorate before the expiration of the 12th month. Although electronic submission is envisaged, such a functionality is not deployed on the Bulgarian single national website by the date of this publication.
Posting periods longer than 12/18 months trigger the application of a larger scope of Bulgarian labour law requirements, beyond the core-set rules including, among others:
- compensation for non-admission to work;
- compensation for temporary suspension from work;
- compensation for relocation;
- disaster compensation;
- compensation in case of employee’s lawful refusal to perform work;
- free food and/or food supplements, where applicable;
- periodic medical examinations;
- free work clothing/uniforms, where applicable;
- social and cultural services;
Even after the 12/18-month period, the following conditions remain governed by the law, applicable to the employment relationship and are not subject to Bulgarian legal requirements:
- the conditions for concluding and terminating the employment contract; and
- the rules for insurance in supplementary professional schemes.
If a posted worker is replaced by another one sent to perform same task at the same place, their posting terms are aggregated and counted together against the 12/18-month period.
When assessing the performance of the same task at the same place condition, account is to be taken of the nature of the work, the nature of the service provided, the user of the service and the address or addresses of the place of work.
With respect to postings, which are ongoing at the time the amendments, the 12/18-month period starts to count as from the beginning of the postings, not as of the date of the amendments. Foreign employers with workers posted to Bulgaria should assess the impact of this rule and plan submission of extension notification, as well as switching to the larger scope of Bulgarian labour law requirements, beyond the core-set rules.
Exemption for Installation of Equipment
A seemingly minor, yet important change is introduced for the application of the exemption from some of the core-set rules in case of installation of equipment. While previously the construction works (not eligible for the exemption) were listed exhaustively in the Posting Ordinance, the list is now exemplary. This opens a field for interpretation by local authorities and necessitates even more careful assessment of the activities to be performed by posted workers, when relying on the exemption.
It is stated, that if a non-genuine posting is ascertained, all requirements of the Bulgarian legislation are applied to the employment relationship, if more favourable for the employee, than those under the law of the sending State. In our view, the reference to the sending State law is incorrect. It should be interpreted as the law applicable to the employment relationship. In addition to this, however, sanctions may be imposed, if administrative violations are established.
Violations of the Bulgarian labour law requirements due to outdated information published on the Bulgarian single national website about mandatory terms and conditions of employment are to be considered committed under mitigating circumstances. This means, that the administrative authority should determine the sanction below the maximum amount or even as a minor violation, if the necessary conditions are met, namely:
- the violation has been remedied as soon as it has been established; and
- it has not resulted in harmful consequences for the employees;
However, it remains unclear if this provision will apply not only in cases of outdated information, but also in case of incomplete or incorrect information, which actually puts employers at higher risk. Hopefully, administrative practices and case-law will address this positively.
How We Can Help
WorkisrOund develops software solutions, automating the main processes of posting of workers to a number various Member States, including to Bulgaria. Our digital posting solutions can greatly support your posting activities, release you from burdensome paperwork and improve your compliance with posting regulations. Our experts are standing by to guide and advise you in any step of arranging of your postings to Bulgaria. You can request for a live demo and learn more by contacting us.
As always, keep in mind, that the information contained in this post is solely intended to alert you of legislative developments, that may be relevant to or affect your business. The information contained herein is by no means comprehensive and does not substitute actual legal advice.