Invisible Ink
Invisible Ink

The Hidden Clauses in Employment Contracts in Bulgaria

Summary/Abstract: The article explores the practice of concluding employment contracts with hidden clauses as a form of undeclared work. The hidden clauses of the employment contract either concern pay or working hours or both. This is illegal wage practice in which employers pay their declared employees two wages, an official wage which is declared to the state and an unofficial wage that is not declared for tax and social security purposes. Theoretically, these private agreements are interpreted through their dual nature. A dual agreement as related to the employment contract is understood as a targeted discrepancy between the official written agreement and an unofficial verbal agreement. A dual agreement implies the existence of an official contract and is defined as such precisely because of deliberate non-compliance with the official contract for private gain. The central research question concerns the social forces behind the proliferation of dual agreements and their social legitimacy. The central assumption is that there is a contradiction between the short-term and long-term interests of both employers and employees. The article claims that employers and workers are complicit in under-declaring wages because of their short-term economic interests. Dual agreement practices have gained social legitimacy and are now a well-established informal market institution, shaped by a specific socioeconomic context. The analysis is based upon data from nationally representative surveys and qualitative research with employees in the capital city of Sofia.

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