LEGAL ALERT, JUNE 2026
CRITICAL LEGAL UPDATE: NAVIGATING THE NEW PAY TRANSPARENCY REQUIREMENTS FOR YOUR BUSINESS
As we approach the transposition deadline for EU Directive 2023/970 on Pay Transparency, the Bulgarian government has introduced a draft bill amending the Protection Against Discrimination Act (PADA) (“Закон за защита от дискриминация” in Bulgarian) and the Labor Code.
The Bulgarian legislator, looking for a balance introduced stricter local compliance rules and at the same time utilized maximum permissible grace periods to protect small and medium businesses.
Here is what you need to know to prepare your organization:
Where Bulgaria is Getting Stricter (Gold-Plating)
- Tight Response Windows: While the EU Directive leaves internal response times flexible, the Bulgarian draft introduces two contradicting (at least at first glance) deadlines: (i) short 14-day deadline under the Labor Code for employers to provide information on average salary levels of employees at the same job grade upon an employee’s request; and (ii) more reasonable 2-month deadline under the PADA for the employer to provide written information for the salary levels with specification of gender of employees providing the same or equal labour.
- Fixed Annual Deadlines: Employers must proactively and in writing notify all employees about their right to pay information by January 31st of each calendar year.
- Broader Scope under the Labor Code: Right-to-know provisions regarding average pay scales are being integrated into collective bargaining and general labor rights, meaning the information requests will not be restricted solely to gender-based comparisons.
Where Bulgaria is Offering Maximum Flexibility
- Exemption for Smaller Businesses: The draft adopts the lightest possible reporting regime by completely exempting companies with fewer than 100 employees from mandatory periodic reporting.
- Extended Implementation Timeline: Bulgaria is using the maximum allowed transition periods. While the law officially enters into force on June 7, 2026, the heavy administrative reporting duties are deferred:
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- June 7, 2027: For companies with 150+ employees.
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- June 7, 2031: For companies with 100 to 149 employees.
- Trade Secret & GDPR Safeguards: Employers will have the legal right to withhold or redirect information requests if fulfilling them would directly expose the specific, individual salary of another employee.
Key Compliances Remaining Intact
The draft strictly mirrors the EU requirements regarding hiring: employers will be prohibited from asking candidates about their salary history and must disclose the starting salary or salary range in job advertisements or prior to interviews. Also employers will no longer be entitled to prohibit discussions on salaries between employees.
What should you do next?
Even with the extended grace periods for reporting, the 14-day internal response mandate and recruitment restrictions require immediate adjustments to your HR workflows and payroll structures. Start auditing and properly structuring your employment grid, job titles, job descriptions, job grading systems and pay equity structures today to avoid operational bottlenecks tomorrow.
Call us if you need help from our employment law team that will help you to find the best approach for your business.
Dinova Rusev & Partners Law Office
17, Vasil Aprilov Str., 1504 Sofia, Bulgaria
Tel: +359 (0)2 903 0101