In anticipation of reaching a consensus on the adoption of the budget laws for 2023, the National Assembly took the necessary measures to ensure the operational activity of the state administration. The caretaker government, on its part, decreed an increase in the amount of the minimum wage.
On 1 January 2023 a law extending the effect of specific provisions of the 2022 budget laws until the adoption of their analogues for 2023 enters into force* (Act on implementation of the provisions of the 2022 State Budget of the Republic of Bulgaria Act, the 2022 State Public Insurance Budget Act and the 2022 Budget of the National Health Insurance Fund Act). On the same date, the decree of the Council of Ministers for determination of the new amount of the minimum wage enters into force as well (Decree No. 497 of 29.12.2022 for determination of the amount of the state minimum wage).
Alike the situation at the beginning of 2022, the National Assembly had to resort to this temporary solution until an agreement on the adoption of the state budget framework is reached. At the same time, unlike the last year, the Council of Ministers decided to increase the amount of the monthly minimum wage from 355 EUR (BGN 710) to 390 EUR (BGN 780), and the amount of the minimum hourly wage from 2.10 EUR (BGN 4.29) to 2.36 EUR (BGN 4.72) for work on regular working hours – 8 hours per day, 5-day workweek. The increase is aimed at overcoming the consequences of the high inflation in the country in the last year (16.9% according to the latest data) – 20 % on an annual basis.
Regardless of the minimum wage increase, the minimum insurance thresholds, the maximum insurance income, as well as the calculation of the social insurance contributions and other payments relevant to employers, are unchanged. In particular:
- The amounts and the distribution of the social insurance contributions for each of the social insurance funds, as well as the amount of the health insurance contribution, are preserved. The minimum social insurance income per main economic activities and qualification groups of professions as well as the maximum monthly insurance income of 1700 EUR (3400 BGN) (despite the proposed increase to 2100 EUR (4200 BGN) during the discussions) are also preserved.
- The employer-insurer continues to pay the employee a compensation in case of temporary incapacity for work for the first three working days in the amount of 70% of the average daily gross remuneration, the compensation from the fourth day of the incapacity being paid by the state social insurance.
By their nature, both normative acts represent a temporary solution until an agreement on a number of urgent changes in the field of employment and social security law in 2023, regarding the mechanism for determination of the minimum wage and the transposition of the EU Directive on adequate minimum wages, is reached.
* The next budget laws shall be adopted by the end of March 2023, unless in case of early parliamentary elections. If the current National Assembly is dissolved before 1 April 2023, the law will remain in effect beyond that term.