AOBE’S LETTER TO THE MINISTER OF LABOUR AND SOCIAL POLICY ON THE PROCEDURE FOR MINIMUM INSURABLE EARNINGS FOR 2018

The Association of the Organizations of Bulgarian Employers has sent a letter to the Minister of labour and social policy on the procedure for determination of minimum insurable earnings (MIE) for 2018. The reason behind this letter are media statements of the Ministry for an administrative determination of MIE. On this ground for a second year in a row the AOBE has refused to negotiate on the terms and condition of the procedure and recalls the following:

1. MIE, determined by occupations and economic activities, are regulations that are not applicable in any other EU Member State.

2. The actual administrative increase of MIE for 2017 amounts to 2.5%, although no administrative increase was applied under Art. 6, para. 2, item 3 of the Social Insurance Code. At the same time, for the first half of 2017 the growth of the average insurance income is over 6% and the income from insurance contributions increases by over 10% under comparable conditions. This once again and definitely proves the unnecessary use of MIE, for which we have repeatedly presented arguments against.

3. Already at the beginning of the year, the AOBE announced priorities, including the central role of the ratification of ILO Convention 131, the adoption of mechanism for determination of minimum wage and legislative changes to eliminate MIE.

4. The review of the so-called “country-specific recommendations” in recent years also shows that the EC also does not support the definition of MIE by occupations and economic activities.

5. The open procedure against the Republic of Bulgaria on the so-called excessive macroeconomic disballances of the EC should also be considered, in particular the excessive growth of the unit labor cost indicator and the increase in the tax and the social security burden on employment and jobs.

6. There is also a solidification of the dialogue and positions, even in the definition of a mechanism for the minimum wage, which is practically deviating from the direct application of the principles of the economic and social factors stipulated in Convention 131 prior to its ratification.

Under these conditions, and in the absence of any readiness for change in the definition of MIE, the lack of a change in the position of the AOBE in the 2018 MIE negotiations is fully awaited. In this regard, we consider it necessary for the MLSP to repeatedly encourage the supported by the employers' organizations collective bargaining at company and sector level, instead of drawing in the media intentions for administrative enforcement of new levels of MIE for 2018, without preliminary analysis, identified need and related consequences.