The paper deals with the problems of social policy development on modern labor market presenting the example of the transition period in the Republic of Bulgaria. Social policy is characterized in its different aspects, as well as different approaches on employment and unemployment regarding labor force. The content of social policy and generalized value indicators for the standard of living of the population are discussed, as well as different stages in labor market and social policy development in the country outlining the most significant features. Conclusions are made about the functioning of labor market and the link to social and economic development .