site.btaParliament Passes New Mechanism for Setting Minimum Wage at First Reading

Parliament passed, at first reading, amendments to the Labour Code, submitted by the Council of Ministers, introducing a new mechanism for determining the minimum wage. A total of 119 MPs from Progressive Bulgaria supported the bill, while 45 MPs from GERB-UDF, the Movement for Rights and Freedoms, Continue the Change, Vazrazhdane and three MPs from Democratic Bulgaria (DB) voted against. Seven DB MPs abstained.

Under the bill, the minimum wage will be determined based on four criteria: the purchasing power of the minimum wage, taking into account the cost-of-living level; the overall level and distribution of wages; the rate of wage growth; and long-term labour productivity levels in Bulgaria. 

The minimum wage for the following year will be determined by August 15 of the current year. A Council of Ministers ordinance will set out the procedure for determining it. 

The bill also provides for the President of the National Statistical Institute (NSI) to approve the procedure and methodology for determining and publishing cost-of-living data within nine months of the amendments taking effect.

Labour and Social Policy Minister Nataliya Efremova said that no high-income country has weak social dialogue. She said social dialogue between trade unions and employers was at the core of the new mechanism. They will negotiate the minimum wage and propose to the Government a specific amount for the lowest wage for the following year, Efremova added.

“Our common goal is to find a balance between the need for incomes to grow and the need for the economy to maintain its stability,” the Labour Minister said. She called for the minimum wage not to become a source of division but rather a starting point for a broad debate on people’s incomes, resulting from higher qualifications, productivity and a better environment for workers and businesses. 

During the debate, opposition MPs asked how the next minimum wage would be determined when one of the indicators in the new mechanism – the cost-of-living level – is not yet available, while NSI has nine months to establish the formula for calculating it.