Background: A Client of ours, a small-sized company, recently hired a new employee without informing us as their Payroll & HR services provider. Our Client was unaware of the legal requirement to register the employment contract within three days of signing, but no later than the employee’s start date. As their payroll provider, we informed the client of the deadlines for registering employment contracts and the implications of missing these deadlines.
Legal Context: According to the Bulgarian Labor Code, if an employer misses the three-day registration period for an employment contract, the registration can only occur after a directive has been issued by the Labor Inspection Agency.
Issue: Upon receiving the monthly input, we noticed a new employee had been added, but the employment contract had not been registered with the authorities. In such situations, it is crucial to file a request for the issuance of a directive for contract registration.
Solution:
- Immediate Action: We promptly submitted a request on behalf of our client for the registration of the employment contract to the labor inspection authorities.
- Preliminary Preparation: We advised the client on the necessary documents required for the request:
- A completed application form.
- A scanned copy of the employee’s employment contract.
- Scanned documents proving the regular payment of wages and the contribution of social security from the employee’s start date until the submission of the request to the Labor Inspection Agency.
- A power of attorney because the request was being submitted by an authorized representative instead of the employer.
- Response from Authorities: Within a few days, the labor inspection contacted us to schedule a workplace verification for the new employee.
- Verification Process: The inspection team conducted a workplace visit and issued a directive for the registration of the employment contract.
- Final Steps: Along with the directive, we submitted a notification for the registration of the employment contract to the National Revenue Agency (NRA). Within two days, the employment contract was successfully registered.
Conclusion: This case illustrates the importance of timely registration of employment contracts and the role of payroll providers in ensuring compliance with labor laws. By acting swiftly and efficiently, we were able to rectify the situation and help our client meet legal obligations.