07.03.2024

PROBLEMS ARE COMING IN THE LABOR MARKET

While only a year ago we were wondering whether the Bulgarian labor market was heading towards an overheating phase, by the end of 2023 the trends point more towards stagnation. Unemployment remains low, but along with it the demand for labor is gradually decreasing, and structural problems remain unsolved, the Institute for Market Economy points out.

According to their analysis, after the labor market crisis of spring 2020, which followed the outbreak of the covid-19 pandemic and restrictive measures for business, travel and social life in general, unemployment in Bulgaria follows its usual seasonal dynamics - with peaks in the winter months and distinctly lower unemployment in the summer, thanks to the activity of the tourism sector and agriculture.

As of mid-2021, the unemployment rate has remained in the range of 4 - 5.5%, which corresponds to between 140 and 160 thousand persons registered at the labor offices - a significantly lower number even compared to the period before the pandemic. Unemployment in the country appears to have reached its natural low, with those who are employable having found jobs, and almost all who are not making it permanently into the inactive pool. It is significant that, despite the high declared labor shortage, the rest of the unemployed do not manage to realize themselves - they either have inappropriate education and skills compared to the demand, or are in regions where the demand is low.

Part of the reason for this is the profile of a large proportion of the unemployed. The number of people under the age of 29 registered at the labor offices has decreased significantly – to 15-18 thousand people in the various months of 2023, compared to over 40 thousand at the peak of the pandemic. The decline in the case of the permanently unemployed is weaker - up to 35 thousand people. To the extent that these two groups encounter particular difficulties in finding employment, the probability that they will leave the group of the unemployed in the near future seems relatively small, the Institute for Market Economy points out.

In 2023, a visible decline in vacancies registered in the labor offices begins. On the one hand, the annual spring labor demand peak is weaker and shorter compared to 2021 and 2022, and consequently the demand for workers throughout the summer and fall remains at significantly lower levels. This is especially clear in the last two months of 2023, when registered vacancies fall even below the level of the period of the strictest restrictive measures. This, on the one hand, may reflect reduced expectations by employers of the potential for expansion in 2024 and, on the other hand, an adjustment to the inability to fill jobs.

According to economists, the current state of the labor market is most clearly described by the Beveridge curve, which is a comparison of the unemployment rate with the number of vacancies relative to the total size of the labor force. The resulting indicator serves to determine the moment of the business cycle through the dynamics of the labor market, with recessions characterized by high unemployment and lower demand for labor, and periods of economic growth - by low unemployment, many vacancies and, accordingly, high competition for workers.

According to this approach, the last months of 2023 are characterized by both low supply and low demand for labor – in other words, the labor market stagnates. It is too early to say whether the trend is sustainable, as a more certain indicator of this will be the demand for labor in the first months of 2024. However, the cooling of the labor market has serious consequences both for the expected dynamics of wages in the short term, as well as for economic activity in general. Shrinking competition for workers potentially reduces pressure on employers to raise wages, especially given the drop in demand in the high-tech sector. The slowdown in employment growth, in turn, threatens to miss the growth potential of the economy due to the inability of companies to realize their expansion plans.

The new picture of the labor market from mid-2023 is largely foreshadowed. The changes mostly represent the final normalization after the shock caused by covid and the revival after the lifting of restrictions. Against this background, however, the long-term structural problems come to the fore again - the low levels of education and skills of people outside of employment, regional inequalities, weak retraining and activation policies. This, in turn, puts on the agenda the urgent need for reforms of labor market-related systems, so that these problems are addressed in order to overcome the risk of stagnation and therefore missed economic growth due to missing or otherwise unskilled workers, the Institute for Market Economy concludes.

06.03.2024

PAYING OVERTIME WHEN WORKING ABROAD

It is not uncommon in practice for a worker or employee to perform tasks abroad under a contract with another company. To achieve the goals, the worker is sent to the respective countries, where he works for some time (for example, two weeks), after which he returns for a certain period to Bulgaria and then leaves again for the next business trip.

Usually, in these situations, the worker or employee receives, in addition to the travel allowance and additional hourly remuneration for the work he performs, as well as for the travel time from Bulgaria to the respective country and back.

Those working in such conditions often have claims for additional compensation in the form of days off for the time during which they traveled, as well as for the work they did on Saturdays there, to use after they return to Bulgaria.

Is there any reason for employers to recognize this claim and provide the compensation that workers claim?

In order to give an accurate answer to these questions, first of all, it should be analyzed whether the worker or the employee is working overtime.

According to Bulgarian legislation, travel time on a business trip does not constitute part of working time. Therefore, in respect of travel days, there is no basis for granting the claim.

According to the legal provisions, an additional agreement is signed with the seconded worker or employee, which includes determining the length of the working day and working week, the daily, inter-day and weekly rest, as well as the days of public holidays in the host country.

In practice, if the host company works according to a schedule that causes the employee in question to work on Saturday, a day off (for example, Saturday), he most likely rests, for example, on Sunday and Monday. In such situations, the Bulgarian employer should have information about the exact number of hours worked in order to additionally calculate the hourly remuneration. If some of these hours are overtime, they should be paid at increased overtime pay.

In Bulgarian labor legislation, there is only one case of compensating overtime with rest, and that is when there is overtime on the two days of the interweek break.

The law indicates that for overtime work on the two days of the weekly rest, when calculating the working hours per day, the worker or employee has the right, in addition to increased pay for this work, and a continuous rest period in the following working week in the amount of not less than 24 hours.

Reference:

Art. 2, para. 2, item 5 of the Ordinance on the terms and conditions for secondment and dispatch of workers and employees within the framework of the provision of services

Art. 153, para. 4 of the Labor Code

01.03.2024

THE LABOR MARKET IN BULGARIA HAS THE WORST FORECAST IN THE EU

The working age population between 20 and 64 in our country will decrease by one third by 2050. According to this indicator, our country has the worst forecast in the entire European Union. This is shown in the latest report of the Allianz Trade company (Allianz Trade, formerly Euler Hermes).

The main reasons are the demographic crisis and migration, as Bulgaria is one of the main "donors" of labor to other countries in the EU.

According to the data in the report, about 50 percent of the migrants to the labor market in the EU since the beginning of the 21st century came precisely from Bulgaria, Romania and Poland. Therefore, the forecast for the contraction of the working-age population in Poland is 26 percent by 2050, and for Romania - by 22 percent. It is also expected to decrease dramatically in countries such as Lithuania and Latvia. Among the main possibilities for improving the prospects in Bulgaria and the rest of the countries of the group, the analysts predictably point to an improvement in working conditions and an increase in wages, which would reduce the flow of migrants abroad.

Due to the serious demographic problems of the Old Continent, the experts of "Allianz Trade" expect a deepening of the shortage of qualified labor in almost all EU countries, and by 2050, the average population between the ages of 20 and 64 will decrease by 20 percent. They consider several possible scenarios for countering the negatives in the four largest economies – Germany, France, Italy and Spain – using different combinations of instruments – changes to labor market policies, productivity gains and attracting migrants.

The analysis shows that none of the four countries can find a sustainable solution if they rely only on the inflow of labor from outside. In such a scenario, they would need between 100,000 and 500,000 migrants per year. Specifically, Germany would need about 482,000 people, Italy – 414,000, Spain – 338,000, and France – 115,000.

The situation appears most complex in Germany, where even with an increase in the retirement age to 68 and targeted efforts to increase the participation of women and pensioners in the labor market, estimates show that 200,000 migrants will be sought annually. Spain and Italy have a larger reserve of population that is not currently employed in the labor market. If it is successfully attracted and activated, an additional 89,000 and 131,000 migrants per year would be needed respectively. The prospects are most favorable in France, where such measures would be sufficient to solve the problem even without the need for additional labor from outside.

However, Allianz Trade experts emphasize that attracting migrants will be an increasingly difficult process due to the deepening demographic crisis in more and more countries in Europe, as well as the emergence of the same problems in large economies in Asia and Latin America. Given the fact that only in Africa is the population between the ages of 20 and 39 not declining, the fight for skilled labor will become increasingly competitive everywhere in the world, they warn.

In this unfavorable context, among the possible measures and solutions indicated in the report are an increase in real working hours in some European countries and an improvement in the integration and qualification of migrants, including achieving a higher degree of engagement of women among them. A good example of this is Sweden, where the prospects for preserving the workforce and, accordingly, the stability of the economy at the moment seem most optimistic.

29.02.2024

HOW TO REACT WHEN THEY CHANGE OUR JOB

In today's society, where the dynamics of the labor market and the business environment are in constant change, understanding and respecting the rights and obligations of both employers and employees plays a key role in maintaining fair and balanced employment relations. In this context, one of the main principles that regulate the relationship between employers and workers is the principle of modification of the employment relationship.

This principle, which is enshrined in the Labor Code, requires the express and written consent of all participants for any change that affects their employment status. Let us consider the importance of this principle and what are its applications in practice.

According to the current legislation, the general principle when amending the employment relationship is to do so with the express consent of the parties, which must be expressed in writing. Regardless of whether it is for a fixed or indefinite period, the employer must offer the change to the employee in writing by means of a supplementary agreement or a new contract, with the employee certifying his possible consent by his signature.

One of the key points in this context is the mandatory content of the employment contract, which includes the place of work, the title of the position and the nature of the work. Changing any of these items requires the employee's written consent. For example, if the employer offers the employee a change of workplace or job title, it is necessary for the employee to agree in writing to these changes.

However, according to the Labor Code, it is not considered a change in the employment relationship when the worker is transferred to another workplace in the same enterprise without changing the place of work, the position and the amount of the basic salary. This means that if a worker is moved from one building to another without changing other aspects of his work, no express consent is required for this change.

For example, if a worker or employee in a large corporation that has several offices in different parts of the city works as an administrator in the company's office in the city center. At some point, due to changes in the organization of the work space, the company decided to move some of the workers or employees from the central office to newly rented premises in another district, but without changing their positions or salaries.

According to the Labor Code, this change in the workplace, without affecting other aspects of his work, is not considered a change in the employment relationship. Here, the express consent of the worker or employee is not required for this change, as the basic parameters of his position and remuneration are preserved. In this way, he can be transferred to the new office without having to sign a new employment contract or additional agreement.

Understanding the principles and requirements when changing the employment relationship is essential to maintaining a fair and balanced working relationship between employers and employees. Requiring express consent and written form of changes ensures clarity and protection for all participants in the work process.

Reference:

Art. 66, para. 1, Art. 118, Art. 119, Art. 120, paragraphs 1 and 3 of the Labor Code

29.02.2024

INDUSTRIAL MUNICIPALITIES LEAD IN THE CREATION OF NEW EMPLOYMENT

And in 2022, the recovery of regional labor markets is uneven, with more than two-thirds of municipalities employing people remaining below the record levels of 2019. The most serious delays are seen in municipalities with a focus on the local economy in tourism and in those with the most significant demographic problems, while the industrial regions manage to create new jobs the fastest.

According to the latest data for 2022, the number of employed people in the country as a whole reaches 2.27 million people - a visible increase compared to the "bottom" of the labor market in 2020, when their number had dropped to 2.2 million , but still far from the record of 2019, when 2.32 million people were employed.

The largest number is in the capital - 768 thousand people, followed by Plovdiv with 143 thousand people and Varna with 124 thousand. There are a total of 16 municipalities with over 20,000 employees. There are 80 municipalities with less than 1,000 employees compared to 82 a year earlier, and those with less than 2,000 - 135, or half of all. As expected, given their large population, all municipalities in the top twenty are regional centers.

The relative share of the employed is a sign of the activity and dynamism of the local labor markets. Referred to the population aged 15 and over (which also includes people of retirement age), the largest share of employed people is in small industrial municipalities - Devnya (94%), Sopot (88%), Chelopech (84%), as the high shares reflect the fact that these municipalities attract a lot of labor from neighboring municipalities.

The top five is completed by the energy center Radnevo (74%) and the capital (70%). In as many as 100 municipalities, however, the share of employed people is below 20% - this reflects both relatively low economic activity and weak local labor markets, as well as the influence of nearby strong economic centers. Only a year ago, however, their number was 131, which clearly points to shaking off the effect of the pandemic and restrictions.

As the labor market recovery appears to be over, at least in the leading municipal economies, it is worth comparing the number of people employed in 2019, a record for the labor market in many places. In 178 municipalities, there is a decrease in the number of employees, and this is most visible in Varna (-5.1 thousand workers), Nessebar (-3.3 thousand workers), Kazanlak (-3 thousand workers), Burgas (-2, 5 thousand workers).

By all accounts, the declines are mostly related to the inability of the tourism industry to restore employment to pre-crisis levels.

In relative terms, small municipalities such as Nikola Kozlevo (-33%), Georgi Damyanovo (-31%), Koprivshtitsa and Ivaylovgrad (-24%) are losing the most employees, and for many of them the reasons for this are mainly demographic. as a result of the rapid decline of the working-age population.

However, a considerable number of municipalities have managed to create new jobs and exceed their pre-crisis employment, as in Maritsa the number of employees has increased by 1.7 thousand people, in Rodopi - by 1.5 thousand people, in Bozhurishte - by over 900 people. Here, too, the biggest increases are in relatively small municipalities, among them Kovachevtsi (64%) and Novo Selo (53%).

There are several clusters of municipalities with growth in employment, most visibly in the industrial peripheries of Sofia and Plovdiv. There, declines in the pandemic years have been weaker, and labor demand far outstrips supply, meaning the upward trend in employment there is likely to be more durable.

28.02.2024

IN WHICH CASES CAN WE REQUEST A CHANGE OF OUR JOB POSITION

Most often, in practice, reassignment is made on the basis of the Labor Code, which contains the general regulations for changing the employment relationship by mutual agreement.

The general legal principle regarding contracts is enshrined in the law - they can be amended by the common will of the parties, that is, with the mutual consent of the worker or employee and the employer, expressed by signing a so-called supplementary agreement.

As the rule is that the form of the agreement amending a contract must be the same as the form of the contract itself, the supplementary agreement to amend the employment contract must also be in writing.

According to the Labor Code, within three days of the conclusion or amendment of the employment contract and within seven days of its termination, the employer or a person authorized by him is obliged to send a notification of this to the relevant territorial directorate of the National Revenue Agency. That is, after forming the additional agreement, the employer's obligation is to send a notification to the National Revenue Agency within three days.

At the moment, this is the legal regulation in the Labor Code regarding the change of the position of the worker or employee.

As has already become clear, according to the law it is required that the change of the employment relationship, in the case of the position, takes place when there is the consent of both the worker or the employee and the employer. Please note that the law speaks of "Change of the employment relationship by mutual consent". Therefore, workers and/or employees should agree. Consent should also be given by the employer as a party to the employment relationship. The judgment of this remains his on a case-by-case basis.

The job description is this important document from the worker's or employee's work file, which specifies all the work duties of the position held.

Upon conclusion of the employment contract, the employer is obliged to hand the worker or employee a job description. It expressly regulates the rights and obligations of the worker or employee related to the nature of the work assigned, resulting from the position held. It also indicates the code according to the National Classifier of Professions and Positions, the educational and qualification requirements for occupying the position, connections and interactions with other positions that will take place in the enterprise during the execution of the contract.

The job description specifies the volume and range of requirements for the worker or employee to perform the position, his work functions and duties. They should be logically related to the position by their nature, and their volume should not exceed the physical human capabilities for their implementation within normal working hours.

In particular, it should be noted that there is no obstacle for the employer to approve changes in the job description after concluding the employment contract, and this in no way necessarily means that the position to which the worker or employee is assigned should also be changed. These changes may result from amendments to regulations, be related to setting higher requirements for holding the position, and others.

Reference:

Article 119 of the Labor Code

Art. 62, para. 3 of the Labor Code

28.02.2024

MINISTRY OF INNOVATION WITH NEW MEASURES FOR STARTUPS

Several measures to promote entrepreneurship in our country are planned by the Ministry of Innovation and Growth, it is clear from Minister Milena Stoicheva's answer to a parliamentary question regarding the additional BGN 10 million requested by the department from the budget.

First of all, it is planned to develop a National Program for the support of innovation valleys, which will provide national funding for approved projects under the Horizon Europe Program, the minister points out. She reminds that on May 17, 2023, the program published a call for projects for connected regional "valleys for deep technological innovation" to unite regions with a lower and those with a higher degree of innovation development.

The aim is for the institutions responsible for innovation to work together with the local sector and science to build a common vision and activities aimed at creating key sectors for Europe such as reducing dependence on fossil fuels, increasing food security, digital transformation and cyber security, improving health care, etc. Each innovation valley project consists of two components - for the preparation of an action plan and for a joint transregional competition for the recruitment of project proposals.

In addition, the ministry plans to launch a new initiative aimed at promoting open investment. It aims to create a dynamic ecosystem for start-ups to stimulate the participation of such enterprises in open innovation platforms. These include various stakeholders who are involved in the process at all levels – eg academia, government, civil society, etc. The Ministry will support the launch of such an ecosystem through a platform aimed at innovative small and medium-sized enterprises, as well as organizing a direct connection of the successful participants of the platform with leading global high-tech corporations.

Mentoring and coaching sessions will be provided with experts in the relevant field, sessions with presentation of the subject of activity and the potential need for financing, as well as for finding potential partners, the ministry specifies.

Another measure envisages the creation of a Program for the promotion of the Bulgarian innovative start-up ecosystem in an international aspect. It will ensure the participation of start-up innovative enterprises in summit meetings, specialized events and conferences with the aim of presenting Bulgarian entrepreneurs. The main goal of the measures is the positioning of Bulgaria as a high-tech hub in the Balkans, a good investment destination and a place full of talent and potential, says Stoycheva.

27.02.2024

THE AGENCY FOR PEOPLE WITH DISABILITIES HAS CREATED AN INTERACTIVE MAP WITH ACCESSIBLE OBJECTS S IN BULGARIA

The accessible sites in Bulgaria, which citizens themselves register in the specially created register of the Agency for the People with Disabilities, can now be visualized through an interactive map. The new functionality of the register allows each object entered in it, after validation of the coordinates for its location, to be marked on the map of Bulgaria with the familiar sign for a place that is accessible to people with disabilities.

After clicking on the sign, a detailed map appears with information about the object, including the elements of accessibility - accessible entrance, provided parking spaces, provided services for blind people, translation services into Bulgarian sign language, accessible tourist routes, adapted sanitary facilities, counters, etc.

The register of the Agency for People with Disabilities contains only objects that citizens have entered. Anyone can do it electronically by filling in the information about the object - name, activity, address, as well as the information about its accessibility - in a card specially developed by the Agency. Citizens can search for relevant sites by region, municipality, settlement. The search can also be by industry and category.

The register is available on the website of the Agency for People with Disabilities in the section "Registers", section "Accessible objects", submenu "Register of accessible objects" or at the following link: https://ahu.mlsp.government.bg/da/view/

In the same section, in the submenu "Map of accessible objects", the interactive map is visualized: https://ahu.mlsp.government.bg/portal/objects/map

The Ministry of Labor and Social Policy and the Agency for People with Disabilities rely on the activity of citizens who provide services in accessible facilities, work or visit them, to register them in the Register in order to make more of them visible to people with disabilities.

26.02.2024

THE NUMBER OF THOSE WHO STARTED WORK IN JANUARY IS INCREASING

The number of unemployed persons who started work in January with the assistance of the Employment Agency was 11,343, the increase compared to the previous month was 2,436 people, according to the institution's administrative data.

The largest share of those on the labor market is in the manufacturing industry - 15.8%, followed by trade - with 14.6%, state administration - with 9.3%, human health care - with 6.7% and construction - with 4.6%. During the month, 326 pensioners, students and employed people found work with the support of the labor offices. In countries of the European Union, 914 unemployed people started work with the mediation of the labor offices, the Employment Agency announced.

A total of 280 unemployed people from the risk groups have found their employment through subsidized jobs - 74 under employment programs and measures and 206 - under schemes of the Human Resources Development Program 2020-2027. A total of 232 unemployed and employed people are included in various trainings, and 587 people have completed the training started in previous months, having acquired a new profession or key competence.

The level of registered unemployment in the country increased slightly by 0.2 percentage points on a monthly basis and reached 5.8% in January. The number of registered unemployed persons at the end of the month was a total of 165,840, with the increase compared to last month by 7,635 persons. 26,981 new unemployed persons were registered in the labor offices in January. There is an increase compared to the previous month by 8,204 persons, and compared to January 2023, the newly registered are 2,687 more, the agency also informed.

Another 601 people from the groups of jobseekers employed, students and pensioners also registered with the employment offices during the month. This group also saw an increase compared to the previous month in the demand for the agency's services - by 77.3%. As a result of the work of the Roma and youth mediators, as well as the labor mediators in the labor offices, a total of 4,250 persons inactive on the labor market were activated during the month.

In the labor offices in January, the representatives of the primary market declared 10,037 vacancies compared to 4,452 in December 2023. In the real economy, the largest number of vacancies are in the sphere of processing industry – 28.2%, state administration – 12.4 %, trade - 12%, education - 9.6%, hotel and restaurant industry - 7%, administrative and auxiliary activities - 5.8%.

The most sought-after professions by businesses in January are: machine operators of stationary machines and equipment; cleaners and helpers; staff caring for people; sellers; personnel employed in the field of personal services; workers in the mining and processing industries, construction and transport; skilled workers in the production of food, clothing, wood products and related; drivers of motor vehicles and mobile equipment; metallurgists, machine builders and related workers and artisans; teachers, etc., the Employment Agency also informed.

The Minister of Labor and Social Policy, Ivanka Shalapatova, announced that an increase in labor market activators is planned. Their task will be related to finding inactive people and including them in the labor market, she explained at a meeting of the parliamentary social committee on February 7.

The minister also said that by the middle of the year, the electronic register for economically inactive persons is expected to be ready, which will help in the information connectivity of the overall status of unemployed people.

23.02.2024

OVER A THIRD OF MANAGERS IN ROMANIA ARE WOMEN

Four out of ten entrepreneurs in Romania are women and more than a third of managers in the economy as a whole are women, according to a speech by the President of the National Council of Small and Medium Enterprises in Romania (CNIPMMR) Florin Gianu at a conference of the European Employers' Association of Business Women (PEFA).

"In terms of women running listed companies, we are number one in Europe, which is outstanding, with an average of 31.6%, with the European average being 20%. At the level of the entire economy in Romania, 33.2% of managers are women, a percentage close to what happens at the European level, i.e. 35%, a higher percentage than in the traditional countries: Germany has 29%, Italy - 28% and the Netherlands – 26%. These are official data from Eurostat," stressed Florin Gianu.

According to data presented by the head of the National Council of Small and Medium Enterprises in Romania, four out of every ten entrepreneurs (38.4%) in Romania are women. The best representation was registered in the Center region (44.5%), followed by the Bucharest-Ilfov region (44%). A lower presence of female entrepreneurs is reported in the Western region - 31.9%.

On the occasion of the establishment of the European Employers' Association of Business Women (PEFA), the chairman of the National Council of Small and Medium Enterprises in Romania indicated that the organization is joining an extremely professional and ambitious family.

Representatives of the Romanian authorities and business circles participated in a debate on the topic "Equality between the sexes. Agenda 2030", on the sidelines of which the creation of the European Employers' Association of Business Women was announced.