site.btaSocial Partners Divided on Minimum Wage Increase as of January 2024

The social partners were divided on a Council of Ministers’ draft decree proposing the minimum monthly wage to be increased to BGN 933 as of January 1, 2024, from the current BGN 780. The draft decree was discussed at an extraordinary meeting of the National Council for Tripartite Cooperation (NCTC) on Thursday. Deputy Prime Minister and Foreign Minister Mariya Gabriel, who chairs the NCTC, opened the meeting.

Labor and Social Policy Minister Ivanka Shalapatova said that the proposal for a minimum monthly wage increase is in keeping with a formula laid down in the Labour Code. According to this formula, the minimum monthly wage amounts to 50% of the average gross wage for the last 12 months, Shalapatova added. She said that the net income of minimum-wage earners would reach BGN 724, and assured that Bulgaria will work towards implementing a directive on adequate minimum wages with the support of the European Commission.

Trade unions backed the proposed wage increase and employers did not, Gabriel said at a briefing at the Council of Ministers.

The business community voiced its objections.

Bulgarian Industrial Capital Association’s Governing Board Chair Vasil Velev said that the Association does not endorse the proposal, and its position is that minimum monthly wages should be negotiated and should vary for different economic sectors.

Maria Mincheva of the Bulgarian Industrial Association (BIA) said that BIA is against the proposal. She noted that her organization aims to raise people’s income, and the question is how it can be achieved.

Bulgarian Chamber of Commerce and Industry (BCCI) President Tsvetan Simeonov said that BCCI will never support "the continuation of the administrative minimum monthly wage determination", which according to him, will lead to an expansion of the grey economy in Bulgaria.

Representatives of the Confederation of Employers and Industrialists in Bulgaria and the Union for Private Economic Enterprise also voiced their disapproval of the proposal.

The trade unions backed the proposed wage increase.

Lyuboslav Kostov, Chief Economist at the Confederation of Independent Trade Unions in Bulgaria and Director of the Institute for Social and Trade Unions Research, described the proposal as a “step in the right direction",  which should be built upon. He said that when the minimum monthly wage goes up, unemployment goes down, and domestic demand rises.

Podkrepa Labour Confederation Vice President Ioannis Parteniotis said that his union backs the proposal. "In terms of remuneration, Bulgarian employees rank last, despite the annual increase in the minimum wage in recent years," he said.