With State Gazette No. 66 of 01.08.2023 the obligation for employers with more than 100 employees to pay salaries only by bank transfer was introduced. The changes enter into force from 01.09.2023.
More specifically, the legislator introduces the following additions:
1. In the Labor Code
The provision of Art. 270, para. 3 of the Labor Code provides for the possibility for the employer to pay the monthly salaries to its employees by two ways:
1. personally, to the employee – i.e., in cash;
2. by bank transfer.
The lawmaker added a new para. 4 which shall enter into force from 01.09.2023. According to that new paragraph, employers under Art. 3, para. 1, item 3 of the Restriction of Cash Payments Act shall be obliged to pay salaries only by bank transfer or by deposit to a payment account in a bank specified by the employee in the country.
Below we will review what “employer under Art. 3, para. 1, item 3 of the Restriction of Cash Payments Act” exactly means.
2. In the Restriction of Cash Payments Act
In Art. 3 of the Restriction of Cash Payments Act, a new item 3 was introduced, according to which payments on the territory of the country shall be made only by transfer or by a deposit to a payment account, when they are salaries within the meaning of the Labor Code, paid by employers with 100 or more employed persons, with the exception of persons with whom an employment contract has been concluded for short-term seasonal agricultural work.
From the aforementioned, it is clear that “employer under Art. 3, para. 1, item 3 of the Restriction of Cash Payments Act” means an employer with 100 or more employed persons.
Reviewing the amendments in the Restriction of Cash Payments Act, we have to mention also the introduction of the new item 4 in Article 3, according to which dividends in amount equal to or greater than BGN 1,000 have to be paid only via bank transfer. In this case there are no exceptions in the scope of the provision concerning the payer of the dividend, thus it shall be applied to all payers.
3. An important clarification is made by the legislator – “specified… bank in the country”.
This clarification raises the question of whether the remuneration from an employer with more than 100 employees can be paid in a bank that is outside the country – i.e., that does not listed in the Register of licensed banks and branches of foreign banks in the Republic of Bulgaria, maintained by the Bulgarian National Bank.
This issue is unclear at the moment and is of interest to employers and employees who use the services of other well-known operators in the market. We, from Tascheva and Partner, will monitor the development of this case and will promptly notify our clients.