site.btaEmployers Demand Abolition of Contributory Income Thresholds

Employers Demand Abolition of Contributory Income Thresholds

Sofia, August 5 (BTA) - In a formal common position addressed to Labour and Social Policy Minister Zornitsa Roussinova and Finance Minister Vladislav Goranov, the nationally representative employers' organizations insist on the immediate abolition of contributory income thresholds, the Bulgarian Industrial Association said in a press release on Friday.

The employers argue that since the start of the global economic crisis in 2008, the contributory income thresholds, imposed by administrative order, diverge dramatically from the economic state of the separate sectors and enterprises, the fluctuation of employment, total and sectoral labour productivity, and the increase of prices.

The nationally representative employers' organizations have repeatedly stated that this method expands the grey sector and curbs employment in certain regions, sectors, enterprises and of vulnerable low-skilled social groups, the position recalls. These arguments have also been raised on numerous occasions in recommendations of the European Commission, the World Bank and the International Monetary Fund, the position adds.

According to the employers, such mechanisms of setting contributory income thresholds differentiated by occupation, position and economic activity are not applied in any EU Member State.

The organizations insist that the control authorities fulfil their legally regulated obligations to the full extent and highly effectively, so as to contain dramatically social-security fraud and unreported work, because the powers vested in them are sufficient in terms of functionality and capacity for control, impact and prevention.

The employers refuse to negotiate on the setting of contributory income thresholds for 2017 until the social partners and the State adopt a consensual model on fixing a minimum wage in Bulgaria.

Contributory income thresholds represent the minimum amount on which employers are obliged to pay social and health insurance contributions for their employees. In a number of sectors, the actual wages are far above these thresholds, but in some sectors the wages are lower.

For 2016, employers and trade unions agreed on an average 7.5 per cent increase of the contributory income thresholds. The then Labour and Social Policy Minister Ivailo Kalfin extended this increase by administrative order to the activities in which no agreement was reached.