A Law Amending and Supplementing the Labor Migration and Labor Mobility Act (the "draft") was published on the Public Consultation Portal of the Council of Ministers. Among other proposals, it also provides for the alignment of national legislation with European Union law, after the European Commission sent an official notification to the Republic of Bulgaria for incorrect transposition of provisions of Directive 2014/36/EU of the European Parliament and of the Council of 26 February 2014 on the conditions of entry and stay of third-country nationals for the purpose of employment as seasonal workers.

In view of the growing interest of employers in hiring foreign workers, the draft provides for an increase in the quotas for the total number of third-country nationals who can be hired under an employment relationship by a local employer. Currently, this number cannot exceed 20% of the average number of staff for large enterprises and 35% for small and medium-sized enterprises. The proposed amendments plan to increase the quotas by 5 percentage points to 25% and 40% for small and medium-sized enterprises, respectively.

Unlike the current regime, it is envisaged the requirement to be checked (whether it is fulfilled) for the last 12 months, whereas in case the enterprise has not been active - at the time of filing the application. A corresponding amendment to the Foreigners in the Republic of Bulgaria Act is also foreseen to reflect the changes.

There are also new provisions regarding the employer's liability. If the work permit is revoked due to the employer's fault, the latter will owe the employee compensation.

The draft also takes an important step towards clearer regulation of the activities of persons acting as intermediaries in informing and recruiting third-country nationals in Bulgaria, providing for amendments to the Employment Promotion Act (so-called intermediary companies) and explicitly regulating this activity.

At the same time, a regulatory gap established in practice is being overcome by introducing an explicit prohibition on employers not only hiring workers illegally residing in the Republic of Bulgaria, but also accepting them as seconded or posted workers. One may recall here that if an employer hires an illegal resident, they owe them the agreed remuneration, but not less than the minimum wage established for the country or for the relevant economic activity, for a period of three months, unless the employer or the employee proves a different duration of employment. The remuneration is subject to the relevant taxes and mandatory social security contributions provided for employees under Bulgarian law.

A financial penalty of between BGN 2,000 and BGN 20,000 (or EUR 1,022-10,225) is also envisaged for a local person who has employed a posted or sent foreigner who is a third-country national without a work permit or without registration with the Employment Agency.

In conclusion, the draft reflects the legislator's desire to respond both to the obligations of Bulgaria as a member state of the European Union and to the growing needs of the national labor market. The proposed amendments aim to facilitate access to the Bulgarian labor market for third-country nationals, create more flexible conditions for employers, and strengthen the protection of the rights of employees. In this sense, the amendments have the potential to contribute to more effective regulation of labor migration and to sustainably address the labor shortage in the country.

This material has been prepared for and is part of a legal information bulletin prepared by the law firm Penkov, Markov & Partners. The publications in it do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.