Pay transparency – what is coming for employers in Bulgaria

The right to equal pay for equal work or work of equal value is not new – it has been part of the Protection Against Discrimination Act (Закон за защита от дискриминация (opens in a new tab)) and the Labour Code (Кодекс на труда (opens in a new tab)) for years. In practice, however, it is hard to enforce, because employees usually do not know what their colleagues earn and cannot prove they are underpaid. Directive (EU) 2023/970 (opens in a new tab) on pay transparency aims to change exactly that. The transposition deadline expired on 7 June 2026, and the Bulgarian bill is still before the National Assembly.

Where the bill comes from and who it affects

The bill was prepared by the Ministry of Labour and Social Policy (opens in a new tab) and was under public consultation (opens in a new tab) from 19 May to 18 June 2026. On 11 September 2026 the Council of Ministers submitted it to Parliament (reference 52-602-01-42 (opens in a new tab)), with the Committee on Human Rights as lead committee. The changes are mainly to the Protection Against Discrimination Act, with additions to the Labour Code.

The scope matters. It is often assumed that the new rules affect only large companies, because public discussion focuses on pay gap reports. Reporting does indeed apply only to organisations with 100 or more employees. Most other obligations, however – transparency in recruitment, the right to information, the ban on confidentiality clauses – will apply to every employer, including a company with three employees.

Supervision is entrusted to the Commission for Protection against Discrimination (opens in a new tab) (CPD), which will collect the reports and publish aggregated data. The General Labour Inspectorate (opens in a new tab) will receive information on request. The bill does not introduce separate fines for the new obligations. According to its explanatory memorandum, proceedings before the CPD, the shifted burden of proof and penalties are already governed by the existing Act and will also apply to breaches of the transparency rules.

Pay must be known before hiring

The first change every employer will notice concerns recruitment. The bill requires the employer to tell candidates the basic pay or its range, the permanent supplementary pay for the position and, where there is a collective agreement, its pay terms. The Directive requires this in the job advertisement or at the latest before the interview, so that the candidate can negotiate on an informed basis.

At the same time, the employer loses the ability to ask candidates what they earn or earned in their current or previous jobs. The reasoning is that previous pay often carries over old inequalities – someone underpaid before remains underpaid in the new job. The job title in the advertisement must also be gender-neutral, unless it follows the statutory classification of occupations.

In practice, advertisements stating “salary negotiable” will need to be revised. If pay really is negotiated individually, the answer is to state a range, not to leave the information out.

Objective criteria for setting pay

The bill adds to Art. 14 of the Act the criteria for assessing whether two jobs are of equal value – skills, effort, responsibility and working conditions. The criteria must be objective and gender-neutral and apply both to setting pay and to pay rises.

This is a more significant change than it may seem. Many small and medium-sized businesses have no written pay rules – salaries are agreed individually and raised at the manager’s discretion. In a dispute the employer will have to explain why two people in similar positions are paid differently, and without documented criteria that is difficult. Work of equal value can exist between different positions, for example in different departments, so the comparison is not made only by the title in the staff schedule.

The employee’s right to know

The core of the new rules is the right to information. Every employee will be able to request in writing information on their own pay and on the average pay levels, broken down by sex, of colleagues doing the same work or work of equal value. The employer must reply within 2 months, and if the information is inaccurate or incomplete the employee may ask for clarification, to which the employer must give a reasoned reply within 14 days. The request may also be made through a trade union or the CPD. The Labour Code is being amended in parallel – employees will be able to request the average pay for their job level, again within two months.

So that this right does not remain on paper, the employer will have to inform employees every year by 31 January that they can request such information and how to do so. The bill also protects other people’s data – if a reply would reveal a specific person’s pay, for example in a two-person department, the information goes to the trade union or the CPD rather than directly to the employee.

Pay gap reports

Larger employers will have to submit a report to the CPD after consulting the trade unions. The frequency depends on headcount:

• 250 or more employees – every year, from 7 June 2027;
• 150–249 employees – every three years, from 7 June 2027;
• 100–149 employees – every three years, from 7 June 2031.

The report covers seven indicators – among them the gap in mean and median pay between women and men, the gap in bonuses and other supplementary pay, the proportion of women and men in each pay quartile and the gap by category of employees doing work of equal value. The report is due by 7 June and covers the previous calendar year. The data by category is made available to all employees and the trade unions. Workers placed by a temporary work agency count towards headcount, and the user undertaking performs the obligations towards them.

This is where the most serious consequence lies. If the average gap in any category is 5% or more and the employer cannot justify it with objective criteria, it must remedy it. If it does not do so within 6 months, a joint pay assessment follows with the employees’ representatives – an analysis of the causes, corrective measures and a review of whether earlier measures have worked.

The Directive requires the first reports by 7 June 2027. The bill introduces the obligation from that date but does not say expressly whether the first report will cover 2026 or be due a year later. The calculation method will be set out in an ordinance to be adopted within three months of the law’s publication.

What happens in a dispute

The Directive sets several standards that Bulgarian law must ensure. The employee is entitled to full compensation – back pay, bonuses and other payments, non-material damage and interest (Art. 16). The burden of proof is shifted: if the employee establishes facts from which discrimination may be presumed, the employer must prove there was none. Where the employer has not met its transparency obligations, the burden as a rule rests entirely on the employer (Art. 18). The limitation period may not be shorter than three years from when the employee knew or could reasonably have known of the breach (Art. 21).

The bill contains no separate rules on compensation, limitation periods or proof – according to the explanatory memorandum, these matters are already governed by the Act, including the shifted burden of proof under Art. 9. The practical effect of the shifted burden is considerable. An employer that has not stated pay in its advertisements or has not answered an information request will find it hard to rebut the presumption of discrimination, even if the pay difference has a perfectly reasonable explanation. The employee may file a complaint with the CPD or bring a claim before the court, and the Labour Inspectorate may also carry out an inspection.

Will the law achieve its aim?

The idea behind the new rules is understandable. Pay inequality is rarely the result of an open decision – more often it builds up quietly, through individual arrangements, different bonuses and pay carried over from previous jobs. Transparency makes these differences visible, and the shifted burden of proof encourages employers to explain them in advance rather than defend them in court.

The bill also has weak points. The CPD supports transposing the Directive in principle, but not the bill in its current form. It argues that collecting pay data duplicates information already held by the National Revenue Agency, the National Statistical Institute and the Labour Inspectorate, that some of the data is specially protected personal data and that a supervisory role does not match its functions as an independent body that hears complaints. During the public consultation, business organisations raised questions about transition periods, the definition of “pay”, temporary agency workers and the deadlines for answering requests.

The supervision rules and some deadlines may therefore change at second reading. The core obligations – transparency in recruitment, the right to information, the ban on pay secrecy and the reports – derive directly from the Directive and cannot be dropped.

How to prepare

Most obligations will take effect when the law is published, and changing pay systems takes time. It is therefore sensible to start preparing now:

1. Review employment contract templates and internal rules for pay confidentiality clauses.
2. Revise job advertisements – with a pay range and gender-neutral job titles.
3. Document your criteria for setting pay and for pay rises.
4. Group positions into categories of work of equal value and compare women’s and men’s pay in each category – including bonuses and benefits, not just basic pay.
5. Set up a procedure for answering information requests within 2 months and for the annual notice by 31 January.
6. If you have 150 or more employees, check whether your payroll system can calculate the seven indicators.

If you need a review of contracts and internal pay rules, or help preparing the report, see our employment law services or contact us.