Bulgaria introduces new mechanism for determining minimum wage

The Bulgarian Council of Ministers has approved amendments to the Labor Code, introducing a new mechanism to determine the minimum wage. This system aims to make wage setting more transparent, predictable, and fair for businesses, workers, and the state by replacing subjective decisions with a composite indicator based on four specific criteria.

The four criteria are: purchasing power (measured via a small consumer basket), the overall level of wages (based on changes in median gross wages), the growth rate of minimum wages, and labor productivity (measured by changes in gross value added per employee over a 10-year period).

Under the new rules, the government must propose a new minimum wage amount by August 15 each year following consultations and negotiations with social partners. Additionally, an adequacy assessment will be conducted every three years. The long-term goal is for the minimum wage to simultaneously reach 60% of the median wage and meet the cost-of-living standard. To support this, the National Statistical Institute will develop a methodology for calculating the cost of living within nine months of the law's adoption.

For the year 2027, the new formula projects a minimum wage range between 620.20 euros and 672.80 euros.