Bulgarian Labor Minister Unwaivering about Upping Minimum Wage

Bulgaria's Social Policy and Labor Minister, Totuy Mladenov, says employers want to keep the current minimum wage so that they can save on insurance and other benefits. Photo by BGNES

The funds needed to increase the minimum monthly wage in Bulgaria from BGN 240 to BGN 270, effective July, 2011, have been secured, Social Policy and Labor Minister, Totuy Mladenov, declared.

"I have fulfilled my commitment to Finance Minister, Simeon Djankov, and have also secured the needed BGN 7.5 M," Mladenov told reporters Friday.

Just days ago, Djankov reiterated, once again, there are no funds in the State budget to increase the minimum wage and asked the Minister to find the money on his own.

In 2010, the Main Labor Directorate (GIT) had issued labor safety fines in the amount of BGN 11 M and has collected BGN 5.5 M plus another BGN 3 M since the beginning of 2011, Mladenov informed.

Recently, the Labor Minister announced the minimum wage increase will up expenses in the State budget by BGN 3 M a month, or a total of BGN 18 M for the second half of 2011 and challenged Djankov to provide the remaining BGN 5.5 M by forcing the National Revenue Agency (NRA) to collect what is owed in taxes.

According to official data, 128 000 Bulgarians currently receive minimum monthly wages while the Social Ministry estimates show that upping them to BGN 270 a month would increase revenues from taxes and insurance by BGN 1.6 M a month.

Employers in the country also oppose increasing the minimum wage on the grounds it would raise pressure to up all salaries to lead to more expenses for the business and a new wave of layoffs.

Mladenov counters the employers actually want to keep the minimum wage so that they can declare salaries in the amount of BGN 240 and pay the difference in cash "under the table," adding NRA and GIT would be unwaivering about these types of violations.

The Friday check at a construction site revealed that 20 workers did not have a labor contract and safety insurance while in another case, employees have said they were making BGN 330 for an 8-hour workday while in reality they have been insured for working part time for BGN 180 a day.

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