Payback clause

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Name of the instrument - Local language
възстановяване на разходи за обучение
Name of the instrument - English translation
Payback clause
Scheme ID
33
Country
Bulgaria
Reporting year
2020
Type of instrument
Payback clause
Sub-type of instrument
Payback clauses are possible with no explicit limitations
Type of entry
Single instrument
Short description

Employers and employees can agree on a payback clause. In compensation for employer-provided/financed training, employees commit themselves to stay in the company for an agreed period or (partially) pay back the costs of training. According to the Labour Code, this period differs according to the type of the training contract: contract for acquiring qualification: 6 years, apprenticeship contract: 3 years; contract for higher qualification training and retraining: 5 years. Payback clauses are possible for any type of education.

Level of operation
National
Name of a part of the country
Not applicable
Name of the region (for regional instruments)
Not applicable
Name of the sector (for sectoral instruments)
Not applicable
Relevance
Further instrument
Labour Code (Art. 229-234)
Objective(s) and target(s)
Reducing employers' risk of investment in VET
Year of implementation
1986
Operation/management
The General Labour Inspectorate, under the Ministry of Labour and Social Affairs, manages the employee's rights and obligations including the payback clause.
Eligible group(s)
All employers
Group(s) with preferential treatment
No preferential treatment
Education and training eligible
Payback clauses are possible for any type of education
Source of financing and collection mechanism
Employer funds training, employee provides (partial) repayment eligible training costs in case of premature depature from the company
Financing formula and allocation mechanisms
The Labour Code defines a maximum period that an employee may be liable to work in the same company after completion of training financed by employer. This period differs according to the type of the contract: contract for acquiring qualification (Art. 229) = 6 years; apprenticeship contract (Art. 232) = 3 years; contract for higher qualification training and retraining (Art. 234) = 5 years. The employee is obliged to pay back the costs of training to the employer in case of employee's voluntary resignation within binding period, dismissal due to a serious contract break or non-termination of the training. In case of apprenticeship contract, the amount to be reimbursed to the employer may not exceed 3 times the minimum monthly salary for the country. The conditions for reimbursement of training costs laid down in the Labour Code are general. More detailed conditions may be endorsed in the individual contract between employer and employee.
Eligible costs
No specific regulation on the costs which can be covered by the payback clause.
Volumes of funding
Not applicable
Beneficiaries/take up
Not applicable
Organisation responsible for monitoring/evaluation
Not applicable
Most relevant webpage - in English
Not available
Recent changes

Recent changes in response to COVID-19

No changes

Sources
Labour Code2. http://www.mlsp.government.bg/bg/law/law/KODEKS_na_truda.rtf3. Cedefop Database on Financing Adult Learning
http://www.cedefop.europa.eu/FinancingAdultLearning/DisplayCountryDetai…
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