Bulgaria: Latest working life developments – Q3 2016

Government measures to support employment, the representativeness of the social partner organisations, and the social partners’ failure to agree on an increase in minimum insurance thresholds are the main topics of interest in this article. This country update reports on the latest developments in working life in Bulgaria in the third quarter of 2016.

Financial assistance for rent for unemployed and young people

Unemployed adults and young people from residential institutions who have completed their education and who find work more than 50 kilometres away from their home will be able to claim up to BGN 200 (€102 as at 21 October 2016) towards expenses for rent, preschool childcare and use of the Internet for up to one year. Zornitsa Rusinova, Minister of Labour and Social Policy, said on 5 July that she hoped this measure by her ministry would encourage the unemployed to seek work outside their local area and would support families in less-developed economic regions.

New maternity leave provisions

On 12 July, Mrs Rusinova also announced changes to the Social Security Code to support working mothers. Mothers who return to work after 135 days of maternity leave will receive both their salary and a maternity allowance amounting to 50% of their salary. The allowance will be paid by the National Social Security Institute until the child is one year old.

New work–life balance measures in state institutions

Mrs Rusinova also announced on 12 July that projects would be funded by the Ministry for Labour and Social Policy to create play areas for children of public sector employees. This measure aims to improve the work–life balance of employees of state institutions. The ministry has allocated BGN 2 million (€1 million) for this measure. Institutions will be able to submit projects costing between BGN 20,000 (€10,226) and BGN 70,000 (€35,791). Between 30 and 70 projects are envisaged.

Developments in representativeness of the social partners

According to a decision by the Council of Ministers, based on a census on the representativeness of the social partners in Bulgaria, there are five officially recognised nationally representative employer organisations and two trade unions. A statement from the Council on 10 August said that the representative trade unions are:

  • Confederation of Independent Trade Unions in Bulgaria (CITUB);
  • Confederation of Labour Podkrepa (CL Podkrepa).

The employer organisations officially recognised at national level are:

  • Association of Industrial Capital in Bulgaria (AICB);
  • Bulgarian Industrial Association (BIA);
  • Confederation of Employers and Industrialists in Bulgaria (CEIB);
  • Bulgarian Chamber of Commerce and Industry (BCCI);
  • Union for Private Economic Enterprise (UPEE).

Unsuccessful negotiations for minimum insurance income thresholds

The employer organisations refused to negotiate the minimum insurance income (MII) (the threshold at which they have to start paying social and health insurance contributions for their employees) with the trade unions because they claim the minimum wage is determined unilaterally by the Minister of Labour and Social Policy, with no discussion or consultation. In 2016, the MII was increased by an average of about 8% and the minimum wage increased by about 12%. The employers argued that, in certain economic activities where the average wage is close to the minimum wage, this may lead to layoffs or to companies resorting to the use of the informal economy. No agreement had been signed by 30 September 2016.

The employer organisation CEIB has proposed the ratification of Convention 131 of the International Labour Organization. According to Mrs Rusinova, a possible solution to the problems of MII 2017 is to keep the same level as set for 2016. Plamen Dimitrov, president of trade union confederation CITUB, also expects a compromise with employers to be achieved.

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