New rules regarding the posting and sending | KPMG | BG

New rules regarding the posting and sending of employees within the framework of provision of services

New rules regarding the posting and sending

New rules for the posting and sending of employees within the framework of provision of services are introduced by amendments to the Labor Code promulgated on 30 December 2016 and by the newly adopted Ordinance for the conditions and procedure for posting of employees within the framework of provision of services (“the Ordinance”) effective as of 10 January 2017.

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Below we present the most important changes introduced by the new rules.

Applicability

The new rules apply to posting of workers within the framework of the provision of services to Member States of the European Union (EU), the European Economic Area (EEA) and to Switzerland. The hypothesis of posting has been differentiated into “posting” and “sending”:

  • Posting of an employee by their employer in the following two cases, provided that there is an employment relationship between the sending employer and the employee during the period of posting: 1) in another undertaking on the account and under the direction of the employer under a contract between the employer and the party for whom the services are intended; and 2) in an undertaking which is part of the same group of companies. 
  • Sending of an employee hired by a temporary work agency to a user undertaking. 

The new rules are not applicable in the cases of posting of employees to third countries (outside the EU, EEA and Switzerland), as well as business trips, including for training, specialization, meetings, etc. In such cases, the provisions of the Ordinance for business trips and specializations abroad shall still apply.

Posting or sending of employees from Bulgaria to EU/EEA/Switzerland 

Mandatory preliminary regulation of the terms of sending and posting

Bulgarian employers are now obligated to conclude an additional agreement with employees prior to their posting to another Member State of the EU/EEA/Switzerland. The new rules define a range of matters which must be regulated by the additional agreement. The parties may include other matters as deemed necessary. The additional agreement shall amend the employment relationship for the duration of the posting. Posting of an employee without an additional agreement shall not be allowed.

The sending of employees by temporary work agencies is regulated in a similar way. The employment contract concluded in relation to the sending also includes statutory content regarding specific matters in addition to the ones already regulated by the employment contract for work in Bulgaria.

No obligations for payment of per diem and accommodation allowances

In the cases of posting or sending of employees to EU/EEA/Switzerland, Bulgarian employers and temporary work agencies are obliged to compensate the employees solely regarding the travel expenses, unless the employee benefitted from free transport on different grounds.

If the parties reach an agreement, they are free to include the payment of accommodation allowance in the additional agreement or the employment contract as well.

For the term of the posting or sending, the employers shall not owe daily allowances. However, they shall ensure a minimum level of payment established for the host country. 

Minimum working conditions and minimum remuneration 

The new rules obligate each employer, including temporary work agencies, to ensure that the minimum working conditions are at least those applicable in the host country where the employees shall be posted or sent, provided that these conditions shall not be less favorable for the posted employee. The employers must notify every employee to be sent or posted regarding the minimum working conditions of the receiving country.

The parties to the employment relationship are obligated to negotiate an amount of the employment remuneration not lower than the minimum salary (employment rates) applicable in the receiving Member State. The minimum level of payment is determined in accordance with the applicable level for the same or similar job at the host country.

The elements of the employment remuneration regulated by the additional agreement or the employment contract are determined by the legislation of the receiving Member State.

Posting or sending of employees from EU/EEA/Switzerland or a third country to Bulgaria

The employers registered in a Member State of the EU/EEA, in Switzerland or a third country sending or posting employees to Bulgaria must notify the Bulgarian Agency “General Labor Inspection” prior to the commencement of provision of services related to the sending or posting, as well as declare certain circumstances regarding the posting or sending. 

The foreign employers must provide the local undertaking which accepts the sent/posted employee with a set of documents regarding the employment relationship of the sent or posted employees, which shall be kept at the place where the work is performed by the employee, for the term of the posting or sending.

The foreign employer shall provide the documents regarding the posting or sending in the event of inspections by the controlling authorities within 1 year after expiry of the posting or sending.

Deadline for compliance of the current cases 

The employers and temporary work agencies which have posted or sent employees prior to the entry into force of the Ordinance shall ensure the compliance of the employment relationships with the new amendments not later than 8 February 2017.

© 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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