Банкеръ Daily


Basic Income According to BG Model

A new mechanism for setting the minimum wage will take effect next year. It is envisaged that it will be different for each branch and will be negotiated by each individual profession. Then the minimum levels of insurance determination for the industries, outlined with the Council of Ministers’ decision will be dropped. This will take place after a consensus between employers and trade unions.

All these and a number of other changes are enshrined in the tripartite agreement, which was solemnly signed on June 17 by businesses, the government and the trade unions.


Another compromise was reached - the first three days of sick leave will continue to be paid by employers. However, the trade union's proposal to return part of the income tax to the poorest families at the end of the year was not accepted.


The tripartite memorandum contains five sections related to business environment and economy, energy, social protection, green deal, demography, education, labor migration. Targets for labor productivity, compensation for social protection and expenditures for social protection, which amount to 20% of GDP, have been set.


"The minimum wage will continue to exist, it will simply not be the same for all sectors, so we will be able to remove the minimum insurance thresholds," explained Social Affairs Minister Denitsa Sacheva.


Businesses and unions need to talk about their initial determination.


The idea is that


the various minimum wages be increased under Swiss rule,


which includes inflation and rising average incomes.


It is planned to equalize the national minimum wage in a few years for the self-employed, tobacco growers and farmers, for whom the thresholds are lower, after which the Swiss rule will work for them as well. The same approach will be applied to the maximum insurance income, but from 2022.


"The agreement is the result of months of negotiations and includes 46 reforms. They will start in the next six months. One of these reforms is the setting of a minimum wage. It is currently being determined administratively. That is why we have been criticized by the European Commission ", the chairman of the Association of Industrial Capital Vasil Velev explained to "The Banker".


Velev announced that an agreement has already been reached with the unions to develop such a mechanism. The mechanism in question provides for


negotiating  a minimum wage which is to operate at national level


and to be valid for all industries and economic activities and under which workers may not be employed on an eight-hour working day.


"Apart from this and above, in terms of economic activities, the branch organizations of employers and trade unions will try to negotiate minimum wages for at least three categories of staff - low-skilled, high-skilled and workers with higher education. These minimum wages will not be lower than the national one ", explained the chairman of BICA.


According to him, in some industries the minimum wage for low-skilled staff will coincide with the minimum for the country.


For highly skilled workers and specialists with higher education, starting salaries are expected to be higher. Where no agreement is reached between employers and trade unions, the minimum wage for the country will be applied.


Vasil Velev announced that the negotiations with the unions will start before the beginning of the summer, although the situation for the next year is unclear, given the coronavirus pandemic and the economic crisis.


It is also unknown whether the government's promises, reflected in the coalition agreement between GERB and United Patriots, will be followed. It     states that in 2021 the minimum wage at the national level will remain at BGN 650.


"When the program was written, there was no economic crisis. There are still many unknowns for the next year," said Vasil Velev.


Asked if the national minimum wage could be reduced, he said: "I guess these will be the employers’ proposals. The unions will probably object. We will see what we’ll agree on!"


The chairman of BICA also announced that


the maximum insurance threshold


will remain at BGN 3,000 next year, as it is now. However, from 2022, it will begin to rise. The formula by which the increase will be calculated includes 50% of the average insurance income growth and 50% of the inflation. Velev clarified that this index is used to calculate annual pension increases in Switzerland.


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