The Bulgarian government has proposed changing the manner in which the statutory length of labour service is calculated under the Labour Code. The proposal was included in the draft 2026 Budget of the Republic of Bulgaria Act and adopted by the Bulgarian Parliament on 24 July 2026. The new rules enter into force on 1 January 2027.
What changes?
Under the current rules, a working day of at least four hours is recognised as one complete day of labour service. This rule is beneficial for employees and affects multiple employment rights in their favour.
Now the length of labour service will instead be calculated proportionately, based on the hours actually worked. In the context of a standard eight-hour working day, four hours of work per day will equal half a day of labour service. One calendar year under such an arrangement would result in approximately six months of recognised length of service in contrast to one complete year as currently.
Impact on employees
This change is justified by the objective to eliminate the practice of under-declaring employment, whereby employees are registered on fictitious four-hour work contracts to minimise tax and social insurance liabilities, while concurrently performing full-time duties and receiving the remainder of their remuneration in cash. It would also ensure alignment with the calculation of the length of social insurance service. However, while the change might seem fair and reasonable, there are concerns that the slower accumulation of length of labour service by part-time employees could adversely affect their:
- additional remuneration for length of service and professional experience;
- eligibility for positions requiring a minimum period of service;
- compensation for unused paid leave and severance payments linked to length of labour service;
- right to use paid annual leave and its minimum duration, as well as other employment rights.
Impact on employers
Employers would likely need to adapt their HR and payroll systems to calculate length of service on an hourly basis. They should also review internal salary rules, collective bargaining agreements, and benefit policies that link employee rights to length of service.
Future steps
This amendment will require changes to the ordinance on the length of labour service, and potentially other bylaws, such as the ordinance on working time, rest and leave.
For further information on the proposed amendment, its potential impact or other employment law matters in Bulgaria, contact your CMS client partner or the CMS experts who contributed to this article.
