BESCO Position Paper on the Draft Act Amending and Supplementing the Protection against Discrimination Act

To
THE 52nd NATIONAL ASSEMBLY

CC:
Committee on Human Rights, Religious Affairs and Citizens' Petitions (lead)
Committee on Labour, Demographic and Social Policy (participating)
Committee on Economic Policy, Investment and Industry (participating)
Committee on European Affairs and Oversight of European Funds (participating)

from
The Association "BULGARIAN ENTREPRENEURSHIP ASSOCIATION", UIC 177239971, represented by its Executive Director Alexander Nutsov

Re: Position on the Draft Act Amending and Supplementing the Protection against Discrimination Act, reference no. 52-602-01-42/11.09.2026

DEAR LADIES AND GENTLEMEN,

The Association "BULGARIAN ENTREPRENEURSHIP ASSOCIATION" (BESCO) submits this position on the Draft Act Amending and Supplementing the Protection against Discrimination Act, reference no. 52-602-01-42, introduced by the Council of Ministers on 11.09.2026 (the "Draft Act").

BESCO brings together more than 1,000 companies from the Bulgarian innovation ecosystem that develop high-value-added products, services and technologies and make a significant contribution to the competitiveness and development of the Bulgarian economy. BESCO's member companies are employers, and BESCO therefore submits this position because the new rules proposed will directly affect how employers organize their work and operate.

Our position on the Draft Act is as follows:

1. Postponing the entry into force of the law

We believe the Draft Act should enter into force in its entirety 6 (six) months after its publication in the State Gazette, a period during which employers can bring their internal processes and documents into line with the new requirements. This approach would not restrict the rights of workers and employees, but would ensure a higher-quality and more sustainable introduction of the new regime. The aim of transposition should be the effective application of the principle of equal pay, not the penalization of employers for initial technical or organizational non-compliance during a period when there is no established practice, guidance or sufficient time to adapt policies and procedures.

In the alternative, if the proposal to postpone the entry into force of the law is not accepted, we propose a one-year period during which employers will not be penalized for failing to meet the obligations set out in the Draft Act.

2. A lighter regime for employers with fewer than 50 employees

The Directive gives Member States the option to exempt employers with fewer than 50 workers from the obligation to provide information on the criteria for pay increases. The Draft Act does not use this option, even though it is micro and small enterprises that would feel the greatest administrative impact of such an obligation.

It should be taken into account that employers with fewer than 50 workers and employees usually have no dedicated HR, legal or compliance units, nor formalized, multi-layered systems of job levels, performance assessment and pay changes. In these companies, the processes for setting and changing pay are often simpler, directly tied to the specific position, individual performance, the enterprise's economic capacity and the agreements between the parties to the employment relationship.

Introducing an obligation to permanently maintain detailed, pre-formalized criteria for pay increases would therefore be disproportionate to the scale and structure of these employers. Such a requirement would create an administrative burden exceeding what is necessary to achieve the objectives of the Directive and would run counter to the principle of proportionality.

3. On § 1: amendments to Article 12 on pre-employment transparency

3.1. The proposed wording of the new paragraph 2 of Article 12 needs to be refined. The Draft Act provides that "In a job vacancy notice, the job title shall be stated in a gender-neutral manner, unless it is in accordance with a statutory job classification". This wording covers only the job title, not the content of the notice itself. As a result, the Bulgarian provision does not conform to Article 5(3) of the Directive, which requires both vacancy notices and job titles to be gender-neutral. The subject of the statutory requirement should therefore not be limited to the formal job title. A job advertisement as a whole may not contain expressions or conditions suggesting that persons of a particular gender are preferred for the position. For the transposition to be complete and correct, the provision should therefore cover both the job title and the content of the notice, insofar as it relates to access to the job in question.

3.2. The Directive provides that job applicants have the right to receive from the prospective employer information on the "initial pay or its range", determined on the basis of objective, gender-neutral criteria for the position.

At the same time, the concept of "pay" within the meaning of the Directive is broader than "basic salary". We therefore believe the Bulgarian legislator should follow the Directive's terminology and use the term "initial pay or its range", rather than introducing a narrower formulation limited to the basic salary. It is also necessary to introduce into the Draft Act a legal definition of "pay" consistent with the Directive. Without one, both employers and job applicants will struggle, as it will be unclear which elements must be included in the information on initial pay or its range.

We propose the following wording for Article 12(4), item 1:

"The employer shall provide job applicants with information on:
the initial pay or its range for the position, determined on the basis of objective, gender-neutral criteria;"

We additionally propose that a legal definition of "pay" be introduced in the Additional Provisions of the Act, by analogy with the Directive.

In the alternative, we propose the following wording for Article 12(4), item 1:

"The employer shall provide job applicants with information on:
the initial gross remuneration or its range for the position, determined on the basis of objective, gender-neutral criteria;"

4. On § 2: amendments to Article 14 on the criteria for equal pay for equal work and work of equal value

The Draft Act contains no express rule corresponding to Article 4(4) of the Directive, under which, when assessing the value of work, "relevant soft skills are not undervalued". This requirement is not merely declaratory: it bears directly on the correct determination of equal work or work of equal value. In many cases, soft skills are an essential component of the real value of a position. This applies particularly to positions where the result of the work depends not only on formal qualifications or technical expertise, but also on skills in communication, coordination, client work, team management, negotiation, conflict resolution, process organization, mentoring or working under pressure.

It is in employers' interest that the recognition of soft skills be expressly regulated, since it allows the value of work to be assessed more realistically. If these skills are not recognized as a relevant criterion, there is a risk that positions that differ in content and responsibility will be formally treated as equal solely on the basis of job title, educational requirement, technical tasks or working hours.

5. On § 3: new Article 14a on the right to information

5.1. Article 7(1) of the Directive provides for workers' right to receive information on their "individual pay level" and on the "average pay levels", broken down by sex, for categories of workers performing the same work or work of equal value to theirs. The Draft Act itself introduces a legal definition of "pay level", defining it as the annual gross remuneration and the corresponding gross hourly remuneration, thereby correctly transposing the Directive. Nevertheless, the proposed Article 14a(1) uses the term "his or her remuneration". This creates a risk of terminological and practical uncertainty as to whether gross or net remuneration is meant. The uncertainty is especially problematic because failure or partial failure to meet the transparency obligations may lead to adverse consequences for the employer. We therefore believe the Draft Act should consistently use the Directive's terminology, namely "pay" and "pay level", both in Article 14a and throughout the rest of the text.

In the alternative, if the legislator retains the term "remuneration", it should expressly specify whether gross or net remuneration is meant.

5.2. The proposed Article 14a(2) provides that where the information is inaccurate or incomplete, the worker or employee has the right to request additional clarification, and the employer must provide a reasoned written reply within 14 days. This wording goes beyond the requirements of the Directive and creates a disproportionate administrative burden for employers. Article 7(2) of the Directive provides for the right to "additional and reasonable clarifications and details" and to receive a reasoned reply, but does not introduce a 14-day period. A 14-day period may objectively be insufficient for employers with complex pay systems and structures. Moreover, the Draft Act does not reproduce the requirement that the clarifications be "reasonable". This is a significant omission. An employer should not be obliged to respond to unlimited, repetitive, irrelevant or excessive requests that go beyond the purpose of the right to information.

In view of the above, we propose that Article 14a(2) be amended as follows:

"Where the information under paragraph 1 is inaccurate or incomplete, the worker or employee has the right to request additional and reasonable clarifications. The employer must provide a reasoned written reply within 1 (one) month of receiving the request."

5.3. The proposed Article 14a(3) of the Draft Act provides that the information may be requested through the trade union organization in the enterprise or through the Commission for Protection against Discrimination. This wording is incomplete compared with Article 7(2) of the Directive, which allows workers to request and receive the information through their worker representatives in accordance with national law and/or practice, as well as through the equality body.

Under the Labour Code, workers' representatives are not only trade union organizations. They also include the representatives under Article 7(2) of the Labour Code. The provision should therefore be supplemented with "the representatives of workers and employees under Article 7(2) of the Labour Code", so as not to create an unjustified restriction in enterprises without a trade union organization.

5.4. The proposed Article 14a(5) correctly takes into account the risk that providing information may lead to disclosure of another worker's individual remuneration. However, the Draft Act provides for the information to be given to the trade union organization and/or the Commission for Protection against Discrimination. This provision should also include the representatives of workers and employees under Article 7(2) of the Labour Code and, where applicable, the Executive Agency "General Labour Inspectorate", since the Directive allows limited access for worker representatives, the labour inspectorate or the equality body.

6. On § 4: new Article 14b on pay gap reporting

6.1. The Draft Act places the entire obligation to collect, calculate, structure and submit pay gap information on employers. This is the most administratively burdensome model of transposition. Article 9(8) of the Directive expressly allows Member States to collect part of the information themselves on the basis of administrative data, including data provided by employers to the tax or social security authorities. This approach is intended precisely to reduce the burden on employers. In Bulgaria, employers already submit a significant volume of data on remuneration, insurable income, social security payments and employment relationships to state bodies, including the National Revenue Agency, the National Social Security Institute and the National Statistical Institute. The Draft Act should therefore provide a mechanism for the ex officio use of available administrative data, with employers supplying only additional information that is not available to these institutions and is necessary for reporting purposes. This would avoid duplicate reporting and achieve a better balance between the aims of transparency and the principle of proportionality.

It should also be taken into account that meeting the obligations to collect, structure, analyze and report the information may require not only additional administrative resources but also technical adaptation of the HR and payroll systems used by employers. These costs may be substantial, especially for employers who do not currently maintain data in the structure and level of detail required by the Draft Act. The administrative and financial impact of the new regime should therefore be realistically taken into account when setting the deadlines for its introduction and the methodological support for employers.

6.2. The Draft Act does not regulate how the number of workers and employees is determined for the purposes of the thresholds: as of a specific date, as the average headcount for the preceding calendar year, or by another objective criterion. This is a significant issue, as it determines whether an employer falls within the scope of the reporting obligation. We propose introducing a rule that makes clear to employers the point in time at which the number of workers and employees in the enterprise is determined.

6.3. We believe the proposed Article 14b(4) should be deleted. The provision states that where the information under Article 14b(1) shows a difference of at least 5 percent in the average pay level of women and men in a given category of workers and employees, the employer must prepare and submit to the Commission for Protection against Discrimination a justification for that difference. Directive (EU) 2023/970 contains no such obligation in Article 9, which regulates reporting on the gender pay gap. The 5 percent threshold is set in Article 10 of the Directive as part of the joint pay assessment mechanism. The mere existence of a difference of at least 5 percent is therefore not in itself grounds for submitting a justification at the reporting stage under Article 14b. Still less does it constitute a violation or an indication of discrimination. Pay differences can be entirely lawful where they are based on objective, gender-neutral criteria. Moreover, the Draft Act already regulates, in Article 14c, the joint pay assessment where there is an unjustified and uncorrected difference of at least 5 percent. Article 14b(4) therefore creates a duplicate and premature obligation that moves the justification of the difference from the joint assessment stage to the initial reporting stage. This needlessly increases the administrative burden on employers and creates a risk that any statistical difference of 5 percent will be seen as a problem requiring special justification before the Commission for Protection against Discrimination.

6.4. Article 14b(5) provides that the employer must provide the information under paragraph 3, item 7 to the trade union organizations in the enterprise and to all workers and employees. It should be borne in mind that information by category of workers and employees may lead to direct or indirect disclosure of individual pay levels, especially where a given category has a small number of people or only one worker of a particular sex. The Draft Act should therefore provide that the information is given to all workers and employees in aggregated form that does not allow individual remuneration to be identified. Where there is a risk of identification, access to the full information should be limited to the representatives of workers and employees, the trade union organizations, the Commission for Protection against Discrimination and/or the Executive Agency "General Labour Inspectorate", subject to a duty of confidentiality.

The provision should also cover not only the trade union organizations but also the representatives of workers and employees under Article 7(2) of the Labour Code.

6.5. Article 14b(7) provides that where pay differences between men and women are not justified under the criteria in Article 14(5), the employer must take corrective measures within six months. This wording is unclear and creates a risk of incorrect application. It is not clear from what moment the six-month period starts to run, whether within that period the employer must merely take measures or achieve full correction, or how this provision relates to Article 14c on the joint pay assessment. The Directive provides for correction within a reasonable period. The six-month period matters in assessing whether the joint pay assessment mechanism is triggered, but it should not become a fixed deadline for full correction in all cases. For large employers, complex remuneration systems, collective labour agreements, budget cycles or the need to change internal rules, full correction may objectively require a longer period. What matters is that the employer takes real, reasoned and proportionate measures within a reasonable time.

6.6. Article 9(5) of Directive (EU) 2023/970 provides that Member States shall not prevent employers with fewer than 100 workers from voluntarily providing pay gap information. At the same time, the Directive allows, but does not require, Member States to introduce a reporting obligation for employers with fewer than 100 workers as well. The Draft Act contains no express provision on this matter. We support the fact that the Draft Act does not introduce a reporting obligation for employers with fewer than 100 workers and employees, as such an obligation would create a disproportionate administrative burden for micro, small and some medium-sized enterprises and would go beyond the minimum required by the Directive. At the same time, we believe the Draft Act should expressly allow employers with fewer than 100 workers and employees to provide the information voluntarily where they judge that they have the necessary administrative and technical capacity. Such voluntary reporting should not equate these employers with those for whom reporting is mandatory, nor give rise to additional penalties if they choose not to report. Such a provision would be consistent with the Directive and would encourage good practice without creating a disproportionate burden for small employers. In the alternative, if the legislator provides special incentives for voluntary reporting, they should be expressly regulated, for example a pay transparency label or access to methodological support, without leading to less favorable treatment of employers who are not required to report and have not chosen to do so voluntarily.

7. On § 5: new Article 14c on the joint pay assessment

Article 14c(4) provides that the employer must make the joint pay assessment available to workers and employees, their representatives, the trade union organizations and the Commission for Protection against Discrimination, and, on request, to the Executive Agency "General Labour Inspectorate". The full joint assessment should not automatically be provided in full to all workers and employees if this would lead to disclosure of individual pay levels. A summary version or extract that does not allow individual remuneration to be identified and does not reveal sensitive information may be provided to all workers and employees.

8. On § 11: legal definitions

We believe the proposed legal definitions in § 11 of the Draft Act should be refined and supplemented, as in their current form they do not fully reproduce the Directive's conceptual framework and may cause significant difficulties in the practical application of the law.

First, the Draft Act introduces a legal definition of "pay level" but no separate definition of the underlying concept of "pay". This is a significant omission.

The Directive defines "pay" as the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly from the employer in respect of the worker's employment, including additional or variable components. Only then does the Directive define "pay level" as gross annual pay and the corresponding gross hourly pay. The Draft Act, however, adopts only a definition of "pay level", stating that it is "the annual gross remuneration and the corresponding gross hourly remuneration". The lack of a definition of "pay" creates uncertainty about the scope of the elements to be included when calculating the pay level and when reporting pay gaps. This uncertainty is not merely editorial. It has significant practical consequences for employers. Without a clear definition, disputes may arise over whether the concept includes only basic remuneration and additional remuneration of a permanent or variable nature, or also payments in kind, social benefits, vouchers, supplementary health insurance, a company car, compensation, termination payments, business travel allowances, reimbursed expenses and other payments. Such uncertainty is unacceptable, because the information and reporting obligations carry potential sanctions, evidentiary consequences and reputational consequences. The employer must know in advance and unambiguously which elements "pay" includes for the purposes of the law and which it does not, especially where certain payments are not consideration for work but reimbursement of expenses or compensation. We therefore propose that the Draft Act reproduce the legal definition of "pay" from Directive (EU) 2023/970 or introduce a national definition that clearly corresponds to its scope. In the alternative, if the legislator retains the term "labour remuneration", it should clearly specify whether it covers all elements of pay within the meaning of the Directive or only the elements of labour remuneration under national labour law. Otherwise, there will be a risk of mismatch between the scope of the Directive and national legislation.

Second, the definition of "gender pay gap" in the Draft Act uses the expression "average levels of gross labour remuneration". In view of the definitions in the Directive, it is more appropriate to use the term "average pay levels", since "pay level" is already a separately defined concept.

Third, the definition of "median pay level" should also be aligned with the Directive's terminology. Instead of "the level of gross labour remuneration", "the pay level" should be used.

9. On the proposed amendments to the Labour Code

9.1. On the proposed new letter "c" in Article 52(1), item 2 of the Labour Code

Under the proposal, trade union organizations will be able to receive:

"information on average salary levels in the enterprise by job level and on the rules and procedures for setting and changing basic salaries and additional labour remuneration, and may require confidentiality."

We believe this provision needs to be refined in several respects.

First, the term "job levels" is not identical to the term "category of workers and employees performing equal work or work of equal value" introduced in the Draft Act, which relates to the performance of the same work or work of equal value. In practice, one job level may include positions with different functions, responsibilities and value of work, and persons at different job levels may in certain circumstances perform work of equal value. Using different definitions for grouping in the Labour Code and in the Protection against Discrimination Act may lead to different results in determining the relevant comparison group.

Second, the Draft Act uses the terms "salary", "labour remuneration" and "pay level" at the same time. Given that "pay level" is the term defined for the purposes of the new regime, we consider it necessary to harmonize the terminology so that no doubts arise about the scope of the information provided.

9.2. On the new paragraphs 2 and 3 of Article 128a of the Labour Code

The proposed provision largely duplicates the new Article 14a of the Protection against Discrimination Act, but introduces a different comparison criterion and a different scope of information. Under Article 14a of the Protection against Discrimination Act, the comparison is made against the relevant category of workers and employees performing equal work or work of equal value, and the information on average pay levels is provided broken down by sex. In the proposed Article 128a(2) of the Labour Code, the basis of comparison is "the same job level", without a breakdown by sex. As a result, one and the same worker may hold two separate rights to information, for which the employer would have to form two different comparison groups. This creates an unnecessary administrative burden and a risk of contradictory results.

We consider the use of the term "the same job level" incorrect. As noted in 9.1, a job level does not in itself prove either equal work or work of equal value.

The proposed paragraph 3 of Article 128a of the Labour Code is also unclear. It provides that additional information is to be provided within 14 days, "unless the request has been made more than once in a one-year period". Such a limitation is provided for neither in Directive (EU) 2023/970 nor in the proposed new Article 14a of the Protection against Discrimination Act. Within one and the same Draft Act, this creates two parallel regimes for providing additional information that differ in a significant element: the possibility of a repeat request within one year. It is not clear why, when exercising the right under the Labour Code, a repeat request for additional information is restricted, whereas no such restriction exists when exercising the similar right under the Protection against Discrimination Act.

We therefore believe the regimes under Article 128a of the Labour Code and Article 14a of the Protection against Discrimination Act should be aligned.

9.3. On paragraph 3 of Article 243 of the Labour Code

We believe the wording should be aligned with the new paragraph 2 of Article 22 of the Protection against Discrimination Act. Under that paragraph, restrictions on the disclosure of individual remuneration "for the purposes of exercising the right to equal pay" are prohibited. In Article 243(3) of the Labour Code, however, this qualification is missing and the prohibition is worded in absolute terms. As a result, the same Draft Act creates two rules of different scope on the confidentiality of individual remuneration.

The Directive aims to ensure that a worker or employee is not prevented from disclosing their pay where necessary to exercise and defend their right to equal pay. This does not necessarily imply a need for a general, unlimited prohibition on any confidentiality clauses concerning individual remuneration, regardless of the purpose of the disclosure.

We therefore propose that Article 243(3) of the Labour Code be aligned with the proposed new paragraph 2 of Article 22 of the Protection against Discrimination Act.

We express our readiness to take part in working groups, parliamentary committee sittings and other formats for expert discussion of the Draft Act. We hope that the proposals and arguments set out here will be taken into account in the course of the legislative procedure and that the relevant provisions will be refined accordingly.

Yours sincerely,
Alexander Nutsov
Executive Director