Bulgarian HR policy: hiring and managing staff

Hiring

When an employee takes up a job, the employer must conclude an employment contract with them (fixed-term or open-ended). After that, within three days the employer must notify the tax authorities of the contract.

An employee may only start work after signing the contract, which sets out all the terms, in particular:

• place of work;
• job title and nature of the work;
• date of conclusion of the contract and start date;
• duration of the work;
• information on leave;
• notice periods for termination of the employment contract (the same for both parties);
• basic and additional remuneration and the dates of payment;
• length of the working day and week.

Any changes to the contract must be reported to the National Revenue Agency (NAP) within three days.

The employment contract may specify a probation period of up to 6 months (for a fixed-term contract, up to 1 month). This option is preferable if neither the employer nor the employee is sure they are ready to cooperate over the long term. The advantage of such a contract is that it can be terminated easily and without unnecessary formalities during the probation period — there is no requirement to give the other party advance notice.

The employer’s obligations include not only paying the employee’s salary, but also paying income tax and social contributions. The latter (osigurovki) are paid partly by the employer and partly deducted from the employee’s salary.

Working conditions

The employer is obliged to provide employees with suitable working conditions — healthy and safe. In particular, it is necessary to:

• provide employees with medical services from an occupational medicine service;
• provide health and safety training;
• assess risks to the health and safety of employees;
• arrange special conditions for employees with reduced working capacity;
• record, investigate and report all accidents and occupational diseases;
• allocate funds for the collective and personal protection of employees;
• provide employees with special clothing and protective equipment according to the risks;
• take measures to prevent harmful consequences in the event of an emergency;
• see to the protection and evacuation of employees when hazards arise.

All costs associated with ensuring working conditions are borne by the employer. Depending on the specific nature of the company’s activity, additional obligations may arise.

For instance, hazardous working conditions require compulsory insurance for employees, and if the work is in any way connected with food products or activities with children, the employer must ensure that all employees have valid health records.

The size of the business and the number of employees are not decisive. Even when hiring a single employee, a contract must be concluded with an occupational medicine service (“Trudova meditsina”), and failure to do so means paying a substantial fine of between 1500 and 15000 leva.

Compensation

Under the Labour Code, the employer is obliged to pay the employee compensation in the event of an accident at work or an occupational disease resulting in temporary incapacity, disability or death. It does not matter who was at fault (the only exception is if the injured person deliberately harmed themselves or committed a gross violation that led to the accident). Employer costs can be reduced by taking out employee insurance.

The obligation to pay compensation also arises in other cases:

• unlawful refusal to allow an employee to start work;
• unlawful suspension from work;
• during a business trip;
• when the place of work changes;
• upon taking up employment;
• if the employee fails to come to work because of a disaster;
• where the employment contract is terminated without notice;
• where an employee is dismissed on certain grounds;
• where there is unused paid leave;
• in the event of unlawful dismissal or refusal to admit a reinstated employee to work.

Dismissal of employees

The law protects employees’ rights, so in the event of dismissal the employer is in many cases obliged to pay compensation to those dismissed. No compensation is payable if the employee is dismissed during the probation period, resigns of their own accord or leaves by mutual agreement.

In some cases, conversely, the compensation is paid by the employee, for example if they resign without giving the notice specified in the contract.

Sound personnel management

Most foreign company owners in Bulgaria have no time to go into the specific details of HR policy and personnel management. The obvious solution in such a situation is to entrust personnel management to experienced specialists. The staff of Bulgarian Expert are ready to advise on all the nuances of Bulgarian labour law and to help with the paperwork.

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