Hiring workers without concluding labor contracts will continue to be penalized by the Chief Labor Inspectorate (GIT) and not by the National Revenue Agency (NRA).

Bulgaria's Parliament reached the decision on Thursday during the second reading of amendments to the Labor Code.

Menda Stoyanova, Chair of the Parliamentary Budget Committee, supported the proposed changes, saying that tax authorities had access to more information than GIT and it was only logical to allow the NRA to impose penalties for such violations.

At the same time, the opponents of the idea argued that this could result in a doubling of penalties for one and the same infringement.

The MPs also approved provisions stipulating that the absence of labor contract will entail sanctions for the worker, as well as for the employee.

Workers without labor contracts will be made to pay social security contributions for the preceding three months.

Hasan Ademov, MP from the ethnic Turkish Movement for Rights and Freedoms (DPS) party and Deputy Chair of the Parliamentary Social Policy Committee, criticized the proposal, claiming that social security contributions could not be used as the basis for determining administrative penal sanctions.

The amendment was proposed by the trade unions in the Three-Way Council, which also brings together the government and the business sector.

According to its author, Dimitar Manolov from the Podkrepa Labor Confederation, the illegal practice is most often caused by employers, while the workers are the victims, meaning that the two parties do not incur equal liability for the offence.

Employers will continue to face fines of BGN 1500 – 15 000 for the absence of labor contract.

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