site.btaUPDATED Government, Social Partners Align on Minimum Wage-Setting Mechanism

The Government, trade unions and employers reached an alignment on a mechanism for setting the national minimum wage, the Finance Ministry said Monday.

Changes in four equally weighted indicators will determine how much the minimum wage may increase. The Price Index of a Small Basket will be used to determine the purchasing power of the minimum wage while taking the cost of living into account. The gross median wage will determine overall wage levels and their distribution, while the average gross wage will determine the rate of wage growth. Gross value added per person employed over the past 10 years will determine the country's long-term labour productivity levels.

The minimum wage for each subsequent year will fall within a range defined by a lower and an upper limit, the Finance Ministry explained. The lower limit will be the minimum wage for the previous year. The upper limit will be determined by the weighted average of the four indicators, using data for the latest completed year provided by the National Statistical Institute (NSI).

The procedure for setting the minimum wage will comprise several stages.

By April 1, the Labour and Social Policy Minister will provide the social partners with data on the range within which the minimum wage should be set, including the information used to calculate the upper limit. Employers and trade unions will have until May 15 to negotiate its amount and until May 31 to prepare a report.

Taking the social partners' report into account, the Council of Ministers must set the final minimum wage for the following year.

The adequacy of the minimum wage will be assessed every three years, the Finance Ministry said in its press release.

Substantial progress has been made on the mechanism for setting the 2027 minimum wage, with only details concerning official statistics and wage adequacy criteria still unresolved, Labour Minister Nataliya Efremova told journalists, speaking after the meeting.

Dobri Mitrev, Chairman of the Management Board of the Bulgarian Industrial Association, did not comment on the specific amount of the minimum wage for 2027, but said that ultimately, the decision will be made by the government.