Introduction

When expanding across borders, it’s easy to assume employment is employment. But labour laws vary enormously - and misunderstanding those differences can cost businesses time, money, and credibility.

The contrast between Bulgaria and the United States is a prime example. Both offer opportunities for growth, but their legal frameworks couldn’t be more different. From termination rules to benefits, missteps in either jurisdiction can lead to fines, reputational harm, or even business disruption.

This article is for anyone managing people across these two countries. Whether you're setting up a local entity or hiring remote staff, knowing the basics will help you protect your business and support your people.

Quick Tips

• In Bulgaria, employment is highly regulated and employee rights are protected by statutory law.

• In the US, employment is largely governed by state-level rules and often operates on an ‘at-will’ basis.

• Probation periods, notice periods, and redundancy processes are clearly defined in Bulgaria.

• US employers must navigate a patchwork of federal and state rules - there is no standard employment contract.

• Don’t assume what works in one country will work in the other - align with local advisers early.

Contracts and Termination: Stability vs Flexibility

Bulgaria requires written employment contracts outlining role, pay, working hours, and more. Terminations must follow a legal process - with minimum notice periods, valid grounds for dismissal, and often severance pay. The Labour Code is explicit in defining protections, especially for redundancies or disciplinary action.

In contrast, the US follows an ‘at-will’ doctrine in most states, meaning employers or employees can terminate the relationship at any time without cause (with exceptions for discrimination or retaliation). While this offers agility, it also increases risk if decisions aren’t well-documented.

For global businesses, this difference is critical. You may need more robust documentation and consultation in Bulgaria, while in the US, clarity and consistency in internal HR policies will protect you from wrongful termination claims.

Working Time and Leave: Statutory vs Discretionary

Bulgarian employees are entitled to a minimum of 20 days’ paid annual leave by law, plus public holidays. Overtime is limited and regulated, with additional pay or compensatory time off required. Sick leave is state-subsidised, and parental leave entitlements are generous compared to global norms.

By contrast, the US has no federal mandate for paid annual leave or maternity leave. Most leave policies are decided by the employer, although states like California and New York have introduced paid family leave. Federal law provides for 12 weeks of unpaid leave under the FMLA, but only for eligible employees.

HR leaders must plan accordingly. In Bulgaria, ensure you’re tracking leave entitlements carefully and budgeting for statutory obligations. In the US, clear internal policies and benefit packages are key to attracting and retaining talent.

Pay, Benefits, and Social Security: Collective vs Custom

In Bulgaria, pay is subject to a national minimum wage and regular social security contributions, including healthcare and pension. Many employees are also covered by collective labour agreements. Employers must ensure contracts and payroll systems are aligned with these frameworks.

The US has a federal minimum wage, but many states set higher levels. Benefits like health insurance are not state-provided and must be arranged privately. Social security contributions are shared between employer and employee but do not cover healthcare unless Medicare is triggered.

A US-based company hiring in Bulgaria, or vice versa, needs to reframe their approach. You can’t simply ‘mirror’ benefits - instead, you must build packages aligned to the expectations and legal norms of each country.

A Real Example: Avoiding Misclassification Risk

I recently supported a US tech firm hiring engineers in Sofia. Initially, they planned to treat them as independent contractors. But under Bulgarian law, the relationship met every test for employment - fixed hours, long-term obligations, and control over work. Had they proceeded, they risked misclassification penalties, back pay, and damaged trust.

We helped them set up a local entity, draft compliant contracts, and onboard the team with full employment status. Not only did this avoid legal issues, but it also improved employee satisfaction and retention.

Final Thoughts

Managing people in Bulgaria and the USA demands very different approaches. Bulgaria leans toward statutory protection and clear legal process. The US offers flexibility but demands internal rigour. Get either wrong, and the risks compound fast.

What’s next for your global people strategy?

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you’re expanding into new markets, reviewing cross-border contracts, or hiring remote teams, our global HR advisors are here to help you get it right - the first time.