On 1 March 2021, amendments come into force to the Bulgarian Ordinance №5 of 2002 on the Content and Procedure for Sending the Notification Under Art. 62, para. 5 of the Labour Code (the ‘Ordinance’). The amendments are reasoned by general considerations of improved control on the compliance with labour and social security laws and protection of employees through timely collection of information about their employment (including postings and dismissals). Time will show if those aims will be achieved, yet it is beyond doubt, that the newly introduced requirements will increase administrative burden for businesses and will create new compliance traps.
Posting notification obligation
Bulgarian employers and temporary work agencies will be obliged to notify the National Revenue Office about posting and hiring-out of their workers within the framework of provision of services. The notification takes the standard form used by Bulgarian employers to declare conclusion, amendments, and termination of employment contracts. Notification is due within 3 days but it is not quite clear if the term should be counted as of the start of the posting or as of the date of conclusion of the posting annex, respectively of the hiring-out employment contract as it comes to temporary work agencies.
In our view, the 3-days term should count as from the starting date of the posting/hiring-out. For each single violation of the notification obligation an administrative sanction applies in the range of BGN 1,500 – BGN 15,000 for the employer and respectively in the range of BGN 1,000 – BGN 10,000 for the official in charge. Upon repeated violation, i.e. such that occurs within one year after a penalty act for the same type of violation has entered into force, the sanctions are higher, namely in the range of BGN 15,000 – BGN 20,000 for the employer and respectively in the range of BGN 5,000 – BGN 10,000 for the official in charge.
The Ordinance is silent on how chain postings (in a number of host states consecutively) need to be notified. Since the host state is not stated in the notification, based on the current texts of the Ordinance, we find good arguments to accept that a single notification is sufficient in such cases. However, state authorities may adopt different views on that matter.
Termination of employment contract
Another new obligation for employers is to disclose the specific legal ground for the termination of employment contract. For this purpose, a new field is included in the standard form of the notification that is currently submitted to the National Revenue Office within 7 days as of employment termination. The requirements is again justified with considerations for better protection of employee’s rights in case of dismissal and use of unemployment compensations.
The commented amendments can be assessed as controversial, in view of the fact, that most of the information employers are now required to disclose under the threat of sanctions is anyway available to state authorities through other channels. Processing this data smartly, they can extract any posting-related information they need. Moreover, other and much less intrusive mechanisms can be deployed to get any missing pieces.
Anyway, we can obviously anticipate strengthening the control on employers’ posting-related obligations, including regarding payment of remuneration levels as the respective host state requirements, related social security contributions, etc. As always, if you are an employer in need of help with understanding or improving your posting of worker process, you can reach out to us for assistance or consultancy on the matter here.