Understanding Bulgarian employment contracts is crucial for businesses to ensure compliance with local labour laws and regulations. Whether hiring for permanent roles or temporary positions, it’s important to structure agreements correctly.
In Bulgaria, there are different contract types to accommodate various business needs. Fixed-term contracts are commonly used for short-term projects or seasonal work, whereas indefinite contracts offer long-term stability and security for both employers and employees. Businesses seeking greater flexibility may opt to work with independent contractors, provided they adhere to local regulations.
To stay compliant, companies must pay close attention to contract details, including probationary periods, terms of extension, and remote work arrangements. They should also be aware of penalties in employment contracts in Bulgaria, which may apply in cases of early termination or breach of contractual terms.
This guide will break down the key aspects of employment contracts in Bulgaria, helping you draft agreements that align with both business goals and legal requirements.
Hiring employees in Bulgaria comes with legal requirements that employers must follow to remain compliant. From drafting contracts to ensuring an equal employment policy, understanding these rules is crucial for a smooth employment process.
In Bulgaria, an employment contract must be in writing to be legally valid. Employers are required to notify the relevant territorial directorate of the National Revenue Agency (NRA) within three days of signing the contract. A copy of this notification must be provided to the employee before their official start date.
A legally compliant contract must include:
A well-defined job description must also accompany the contract, specifying employee rights and obligations related to the position.
Bulgarian labour law does not explicitly regulate probationary periods in employment contracts. However, many employers choose to include them to assess new hires before confirming permanent employment. If a probationary period is included, it should be clearly stated in the contract to ensure transparency and agreement between both parties.
Employers in Bulgaria should establish clear workplace policies, including an equal opportunity employer policy. This ensures a fair, non-discriminatory work environment, aligning with Bulgaria’s legal framework for workplace equality.
A key component of employment policies is the job description, which serves as an official reference for an employee’s rights, responsibilities, and expectations.
To ensure compliance, employers must notify the NRA’s territorial directorate about new employment contracts within three days of signing. Any modifications to essential contract terms, such as salary, working hours, or contract duration, also require notification.
By adhering to these requirements, businesses can maintain transparency and legal compliance in their employment practices while fostering a structured work environment.
Knowing the differences between contract types and avoiding unfair contract terms penalties is essential to maintaining compliance and protecting employee rights.
An indefinite employment contract is the standard form of employment agreement in Bulgaria. These contracts do not have a predefined end date and continue until either the employer or employee terminates them under the conditions specified by Bulgarian labour law. Employers must ensure that contract terms are fair and legally compliant to avoid disputes over what is an unfair contract term.
Fixed-term contracts are permitted under Bulgarian law but are generally allowed only in specific circumstances, such as seasonal work, project-based employment, or temporary replacement of an absent employee. These contracts must clearly outline their duration and conditions for renewal. If a fixed-term contract is continuously renewed, it may be deemed an indefinite contract by law. Employers should be mindful of unfair contract terms penalties that could arise if contract terms disproportionately disadvantage employees.
Bulgarian labour law mandates that employees must begin work within seven days after the employer provides a signed copy of the contract and a notification form certified by the appropriate regional department of the National Revenue Agency (NRA). Employers should maintain proper documentation to confirm adherence to this requirement. If the employee does not assume job responsibilities within this period, the contract is considered dissolved.
The employment contract officially takes effect when the employee starts work, which must be verified in writing. Additionally, if a collective labour agreement is in place before an individual contract is signed, the individual contract’s clauses must offer more favourable terms to the employee. Otherwise, those clauses will be considered void.
Employers must also ensure that all contract terms are clear and transparent, minimising the risk of disputes. Regularly reviewing employment agreements in line with labour law updates will help businesses maintain compliance and a fair working environment.
Employment agreements in Bulgaria can be concluded for an indefinite period or as a fixed-term contract. Fixed-term contracts may be renewed under specific conditions, but if extended continuously, they may be deemed indefinite by law. Employers must follow the legal framework to ensure compliance and avoid disputes related to Bulgaria’s extension policies.
When renewing a contract, employers should assess factors such as job performance, business needs, and financial sustainability. If a fixed-term contract is extended multiple times, the employer must be cautious to avoid the risk of it being reclassified as an indefinite contract, which would grant the employee additional rights and protections.
Employees who wish to continue their employment may submit a request letter for extension of employment contract by employee. However, the decision to extend rests with the employer, who must evaluate business needs and legal constraints before approving the request. Proper documentation of the extension is crucial to ensure transparency and legal compliance.
Bulgarian labour law does not explicitly regulate the extension of probationary periods. However, if a probationary period is included in an employment contract, any extension should be clearly outlined in a written agreement and mutually agreed upon by both parties. Employers must ensure that such extensions do not violate fair employment practices and remain compliant with Bulgaria’s contract extension rules.
Probationary periods allow employers to assess whether a new employee is a good fit for the company. If an extension is necessary due to unforeseen circumstances, such as additional training requirements or delays in evaluating performance, it must be justified and communicated clearly to the employee.
Unlike employment agreements, civil contracts are always concluded for a specific duration — either a set timeframe or until the completion of an assigned task. Independent contractors in Bulgaria operate under civil contracts rather than employment contracts, meaning they do not receive standard employment benefits such as paid leave, social security contributions, or job protection. Employers should ensure that civil contracts clearly define the scope, duration, and expectations to avoid misclassification issues.
When working with independent contractors, businesses should specify deliverables, payment terms, and contract termination conditions to prevent disputes. Employers must also ensure that contractors are genuinely independent and not functioning as disguised employees, as misclassification can lead to legal penalties and financial liabilities.
By carefully managing contract extensions and ensuring compliance with Bulgarian labour regulations, employers can create a stable and legally sound workforce while avoiding potential legal pitfalls. Proper planning and documentation help foster a transparent and fair employment environment for all parties involved.
Fixed-term employment contracts are a common arrangement in Bulgaria, providing flexibility for employers while ensuring that employees receive fair treatment under national labour laws. In the spirit of fair work, fixed-term contracts have to be well-planned, managed, and executed.
Fixed-term contracts are permissible under specific circumstances, such as seasonal work, short-term projects, or training programs. The duration of these contracts can range from one day to several years but may not exceed three years. For non-seasonal activities, fixed-term contracts must be for at least one year unless otherwise justified by the nature of the work.
When terminating a fixed-term contract before its expiry, employers must comply with Bulgarian labour laws, including applicable notice periods. Typically, if an employer terminates a fixed-term contract prematurely, they must provide justification and adhere to statutory notice requirements. Employees may also request modifications to their contracts, such as switching from a fixed-term to an indefinite contract, through a written proposal.
Termination of fixed-term contracts in Bulgaria
Termination of a fixed-term contract generally occurs upon the expiration of the agreed-upon period. Unlike indefinite contracts, fixed-term contracts end automatically without requiring a formal notice of termination. However, if an employee continues working for more than five days beyond the contract’s end without a written objection from the employer, the contract is automatically converted into an indefinite.
A fixed-term contract with a single employee for the same position can only be renewed once, and the renewed contract must be for a minimum of one year. Employers must ensure compliance with these regulations to avoid potential legal disputes.
Severance pay for fixed-term contracts in Bulgaria
Employees working under fixed-term employment contracts enjoy the same rights and benefits as those with indefinite contracts. This means that employers cannot terminate fixed-term contracts early without proper justification and adherence to Bulgarian labour laws. While severance pay is not automatically granted upon expiration of a fixed-term contract, compensation may be required if termination occurs unfairly before the agreed-upon end date.
To comply with fair work principles, fixed-term contract employers must ensure that employees receive all legally mandated benefits and protections, as outlined in provisions under Bulgarian law. Failure to adhere to these requirements may result in penalties or legal claims by affected employees.
Fixed-term employees are entitled to the same workplace rights, protections, and benefits as their permanent counterparts. This includes access to paid leave, social security, and workplace protections against unfair dismissal. Employers should ensure that contract terms align with Bulgarian labour standards and that employees receive fair treatment throughout their employment.
Additionally, employees have the right to propose amendments in writing to switch from a fixed-term to an indefinite contract. If an employer refuses, they must provide a written explanation for their decision. Ensuring fair and transparent contract management not only helps businesses comply with labour laws but also fosters a positive work environment.
The usual working hours in Bulgaria follow a standard framework of 8 hours per day, 40 hours per week, from Monday to Friday. This structure applies to most industries, ensuring a consistent schedule for employees. However, collective agreements or specific job requirements may allow for adjustments to these hours while still maintaining compliance with national labour laws.
In corporate environments, office working hours in Bulgaria typically align with this schedule, although some businesses may adopt flexible working arrangements depending on operational needs.
Overtime work is strictly regulated under Bulgarian labour laws to ensure employees are fairly compensated for additional hours worked while preventing excessive workloads. Employers must carefully manage overtime arrangements to avoid non-compliance with legal limits and potential penalties.
Overtime is any work performed beyond the standard 40-hour workweek and must be authorised in accordance with employment contracts or collective agreements. Employers are responsible for tracking overtime hours and ensuring they do not exceed the maximum thresholds.
Overtime limits are set as follows:
Employees working overtime receive higher pay rates, which are set as:
In addition to financial compensation, employers may offer additional time off in lieu of overtime pay, provided this is agreed upon in advance. Failing to comply with overtime regulations can result in legal disputes, fines, and reputational damage for businesses. Therefore, it is essential for employers to implement clear policies and maintain accurate records of employees’ working hours.
While most businesses operate within the country’s working hours framework, certain industries, such as hospitality, healthcare, and manufacturing, may require shift work or extended hours. In such cases, employers must adhere to labour laws governing night shifts, rest breaks, and maximum weekly working hours.
For example, the Bulgarian post office working hours may differ from standard office hours, with some locations offering extended services on weekends or evenings to accommodate public demand.
Employers should also consider flexible working arrangements where applicable, especially with the rise of remote and hybrid work models. By ensuring compliance with Bulgarian labour laws while providing employees with a well-structured schedule, businesses can maintain productivity while fostering a healthy work environment.
As remote work continues to grow in popularity, understanding the legal framework and employer responsibilities in Bulgaria is crucial. Remote work in Bulgaria is governed by specific labour laws that ensure both employers and employees operate under fair and regulated conditions.
The legislation on remote work is outlined in Section VIII b of the Bulgarian Labour Code. Remote work can be implemented through mutual agreement between the employer and employee, either via a collective agreement or an individual employment contract. However, in exceptional circumstances, such as a state of emergency or an epidemic, employers may impose remote work unilaterally without the employee’s consent.
Employees also have the right to propose remote work arrangements, but employers are not obligated to approve such requests. In some cases, if an employer rejects a remote work proposal, they may need to provide a written justification.
Employer responsibilities for remote workers in Bulgaria
Employers overseeing remote or work-from-home employees in Bulgaria must adhere to key responsibilities, including:
For foreign nationals working remotely while living abroad in Bulgaria, visa requirements depend on their nationality and employment status. The country does not currently have a dedicated digital nomad visa, but remote workers can enter under long-term residence permits, business visas, or freelance permits, depending on their situation.
There are many reasons to work remotely in Bulgaria, including its relatively low cost of living, favourable tax rates, and growing expat-friendly infrastructure. However, it is essential for remote workers and employers to ensure they comply with immigration and tax regulations when working remotely from Bulgaria.
Like all countries, Bulgaria has its own regulations regarding employment contracts — and failing to comply can result in serious legal and financial consequences.
Fortunately, our team has extensive experience in drafting customised, fully compliant employment contracts in Bulgaria (and in over 100 other countries worldwide). By partnering with us, you can eliminate the stress of navigating local labour laws and instead focus on what truly matters: growing your business.
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