Overdue wages are paid after inspectors’ visits

Companies have begun paying their workers’ overdue wages, after Bulgarian labour inspectors found that 72 employers owed workers more than BGN 19 million. The inspectors, who began a cross-sector campaign in June 2010 to monitor companies’ compliance with labour law, found 15,000 violations. These included non-payment of wages, late payment or wages below the agreed minimum. The inspectors also ensured employees had contracts and that working times were respected.

Violations of labour laws discovered

In the second half of 2010, the Executive Agency General Labour Inspectorate (EA GLI) found about 15,000 violations of the labour law. They included:

• non-payment of wages;

• late payment of wages;

• payments below the minimum wage.

These cases were found most often in the construction, retail, restaurant and security sectors. Large-scale dismissals were made in these sectors during the height of the financial crisis. However, companies are still experiencing financial problems and have difficulty paying regular wages.

• December 2010, the inspectorate identified 72 companies, employing a total of 16,465 people, that were delaying the payment of workers’ wages to the value of more than BGN 19 million (€9.7 million).

Measures taken to improve matters included:

• increased supervision of companies;

• organised meetings with employers and officials;

• administrative measures implemented between 20 December 2010 and 25 January 2011

As a result, nearly BGN 8.7 million (€4.4 million), about half of the outstanding amount, has been paid. In short:

• 16 employers have paid in full their employees’ delayed wages;

• 45 have made partial payments;

• 11 have not paid the delayed wages within the prescribed period (so far, four are insolvent and three have reached a bilateral agreement with workers to reschedule the payments).

Any employer failing to comply with the inspectorate over non-payment of wages has to take full administrative and criminal responsibility.

Trade union reaction

Trade unions welcomed the activity of EA GLI, but are sceptical that all unpaid wages can be paid entirely by administrative force. They say that the Criminal Procedure Code needs to be modified to criminalise non-payment of wages or social security contributions.

Employers’ opinion

Employers are against the imposition of severe legal penalties. According to them, the relationship between an employer and an employee is regulated by an individual’s contract and any unpaid employee has the ability to take their company to court.

Commentary

Unpaid or delayed wages has been an issue during the last 20 years of Bulgaria’s economic development, and has worsened in times of economic crisis. The country’s National Council for Tripartite Cooperation, involving the government, unions and employers, designed an anti-crisis package (BG1004011I) in March 2010. It suggested that employers should prioritise paying staff when they themselves receive state payments. However, this measure was not binding and many employees were left unpaid despite government subsidies. As a consequence, the state, through EA GLI, penalised companies that did not pay their employees.

Although the penalties led to companies paying the wages, the effect of these penalties is unlikely to be lasting. Recent investigations show that some employers, having paid their debts to staff, have been late again with wage payments. Labour law experts say the best solution would be the creation of specialised labour courts with simplified procedures which could quickly resolve any labour law disputes, including those over delayed and unpaid wages.

Lyuben Tomev, Institute for Social and Trade Union Research (ISTUR)