Economic development and the imperative to remodel business practice as part of Euro-Atlantic integration means that human resources practice is increasingly taking on a shape ever more similar to the ways of the West. Labour law is, however, still rather restrictive for the employer, involving a great deal of paperwork and bureaucracy as well as restricting the employer’s right to dismiss and replace staff. Bulgaria is frequently praised for its highly educated workforce, but at the same time the complaint can also be often heard that this same workforce lacks initiative and the all important service mentality.

Finding Staff
The most common ways are to use a human resource agency, of which there are now many, both local and international, or to advertise in the press or one of the online job sites. HR agencies usually carry out all of the work, including placing advertisements, prior selection, and psychometric testing of applicants. Most of these companies also have a database of people seeking work and head-hunting is becoming more frequent.

In Sofia unemployment is very low (probably only around 4 or 5%) and this makes finding good staff difficult. You may get 200 responses to an advertisement only to find that not one fits the bill.

The Law
Employment relationships are governed by law through employment contracts. The contracts must be in written form, and should specify the place and nature of work and salary. Usually, such contracts are for an indefinite period. However, the Labour Code also provides for fixed-term contracts, for temporary, seasonal, or other short-term work. Probation periods of up to six months are allowed. Contracts must include certain items set out by law: working hours, remuneration, holidays, safe and healthy conditions of work, social and cultural services, and conditions and requirements for termination of the contract.

Civil contracts are also used when the position is not a permanent one and rather leads to the fulfillment of a specific order. This means that the employer cannot specify the working times, leave, and other conditions standard to a labour contract. If there is a civil contract, the employee pays 20 per cent advance tax, as set out by the Law on Taxation of Incomes of Natural Persons, but neither the employer nor the employee pays the unemployment fund contribution. Therefore, if the contract is terminated, the employee cannot register as unemployed, and, logically, cannot receive unemployment severance.

Termination may be done in various ways. Notice of termination should be in writing, for a period of 30 days up to three months. If notice periods are not observed, either party can claim compensation, based on remuneration or damage caused, respectively. It should be noted that you cannot fire a staff member simply because you are unhappy with their work, you have to prove that they are specifically not doing certain tasks and that is why it is recommended you have a very detailed job description and a good lawyer!

Discrimination by employers on the basis of race or gender is not allowed.

Salaries
The rules for remuneration and salary structure are revised on a yearly basis and a complicated system of salary levels according to industry category and job class. The total cost of employment consists of the basic salary plus social security payments and a range of other smaller taxes. Monthly remuneration must not be less than the minimum wage, which for 2005 is 120 leva per month. Income taxes, mandatory and voluntary social security contributions are deducted at source. The employer is obliged to provide social security and make contributions regularly at the expense of the employee.

According to the Foreign Investment Agency, the most common forms of incentives are free medical service, food vouchers, transport cards for public buses, clothing allowances, and discounts on purchases of company products.

Social Security Contributions and Taxes
All workers have to be insured, whether on labour or civil contracts. The total insurance burden for an employee on labour contract for 2005 is 42%, officially split between the employer (70%) and employee (30%) (this ratio will gradually go up to 50/50 in 2007), though many employers pay the whole amount, quoting a net salary to the employee. For those on civil contracts, the insurance burden is lower and this option is chosen by freelancers and other professionals.

Employers now have to register any new employee at the local social security administration within seven days of the date of contract commencement. Public social security is obligatory for all employees employed by Bulgarian or foreign natural or corporate bodies within the country.
The social insurance code includes insurance for general illness, work accidents, diseases resulting from the occupation, maternity leave, old age and death, unemployment, as well as additional compulsory pension insurance.

Working Hours and Holidays
Working hours for a five-day working week are up to 40 hours, and 46 hours in a six-day week. Flexible working hours are permitted by law.

An employee is entitled to annual paid leave after eight months of service. The minimum annual paid leave is 20 days. Maternity leave currently is up to two years, during which time the employer is obliged to keep the position open and if anyone is taken on to fill the position their contract can only be temporary.

Foreigners and Working in Bulgaria
All foreigners who have permanent residence or are granted right of sanctuary or refugee status have the same rights to work as Bulgarian citizens.
Temporary work permits are issued by the National Office of Employment of the Ministry of Labour and Social Policy. These work permits are issued for a specified time, job and employer and can only be issued after an application is submitted by the employer. It is valid for the time of the employment contract but not more than one year. The permission may be extended.

The permit can be issued only if there is no Bulgarian citizen suitable for the job. The number of employees who are foreign citizens cannot exceed 10 per cent of the total workforce. The employer must ensure transport expenses for the foreigner’s return in the event of termination of the contract ahead of time, expiry or annulment of the work permit.

Work permits for foreigners will not be issued if the employer making the application has within the past eight months dismissed Bulgarian citizens suitable for the job for which the permit is being requested, or the offered work conditions and remuneration are less favourable than those usual for Bulgarian employees, or if the salary offered is insufficient to ensure the necessary means of existence, or the constitution or the law require Bulgarian citizenship for the job.

Contract disputes with foreigners may be handled either by Bulgarian or other courts, as agreed.