The budget committee has voted to freeze the minimum wage at 620 euros during the second reading of the 2026 Budget. The decision, supported by the governing “Progressive Bulgaria” coalition, GERB, and “Democratic Bulgaria,” halts the current Labor Code mechanism that ties the minimum wage to 50% of the average wage until a new calculation formula is adopted.
Legislative Shift and Economic Rationale
Proponents of the freeze argue that the current automatic adjustment mechanism hinders economic development. According to the majority, increasing the minimum wage often drives up the average wage, which subsequently pushes the minimum wage higher again. This cycle, they contend, risks increasing unemployment. Social Minister Natalia Efremova defended the move, describing it as an effort to improve legislation. The Bulgarian Industrial Capital Association (KRIB) added that the current formula creates economic distortions.
Conversely, opponents labeled the decision a “double standard.” During the committee session, Assen Vassilev of “Prodalzhavame Promyanata” argued that the economy is currently seeing high demand for labor and rising numbers of social security contributors, suggesting the risks cited by the majority are overstated. “Prodalzhavame Promyanata” and the Movement for Rights and Freedoms (DPS) voted against the measure.
Did You Know?
The current Labor Code requires the minimum wage to be set at 50% of the average wage, a mechanism that lawmakers have now suspended for 2026 until a new formula is negotiated and enacted.
Impact on Public Sector Pay
Beyond the minimum wage, the budget committee decided to suspend formulas linking the pay of teachers, university professors, military personnel, and security sector workers to the average wage for 2026. While the formulas remain in their respective laws, they will not be applied to salary calculations for the coming year.
Krasimir Valchev of GERB expressed concern regarding the exclusion of education and defense from these cuts. Valchev argued that maintaining the link in education is essential to attracting high-quality candidates and that failing to do so breaks a political consensus on investing in human capital. He further noted that the defense sector faced significant staffing shortages before the 2024 legislative changes that indexed their salaries.
Future Implications for Negotiations
The path forward remains uncertain as the government has not yet proposed an alternative formula. Lyuboslav Kostov of the Confederation of Independent Trade Unions in Bulgaria (KNSB) warned that the decision complicates future negotiations. Because previous attempts to reach a consensus between unions and business leaders have taken years, there is a risk that the minimum wage could remain at the 620-euro level for an extended period if stakeholders fail to agree on a new calculation method.
Vladislav Goranov of GERB suggested that the government will continue to act as an arbiter between labor and business, stating that the law should not be expected to perform the work of trade unions.
Frequently Asked Questions
What is the new minimum wage for 2026?
The minimum wage is frozen at 620 euros until a new calculation formula is adopted by the legislature.
Who voted against the freeze?
The measure was opposed by “Prodalzhavame Promyanata” and the Movement for Rights and Freedoms (DPS).
Are the salary formulas for teachers and military personnel permanently removed?
No. The committee decided not to apply the formulas for 2026, but they were not permanently removed from the relevant laws.