Bulgarian Parliament adopts new minimum wage calculation mechanism

The Bulgarian National Assembly has passed amendments to the Labor Code, introducing a new mechanism for determining the national minimum wage. The new formula will be based on four primary criteria: the purchasing power of the minimum wage (calculated via cost of living and a small consumer basket), the overall level and distribution of wages in the country, the growth rate of wages, and long-term labor productivity.

Under the new law, the minimum wage must be determined by August 15 each year following negotiations with social partners and an act by the Council of Ministers. However, the legislation has faced intense opposition. Critics, including members of the 'Progressive Bulgaria' and 'We Continue the Change' parties, have described the law as a ‘blank check’ or a ‘Schrödinger’s ordinance’ because it establishes criteria without defining the specific methodology for implementation.

Specifically, the law requires the National Statistical Institute to develop a methodology for measuring the ‘cost of living’ within a nine-month period. Opponents argue that leaving the technical application to future sub-legislative acts creates uncertainty and grants excessive discretion to the Council of Ministers, potentially failing to respond effectively to sudden economic shifts or inflation.