When you are bringing talent to your Hungarian company from your home country, you should be aware of the most important aspects of employment as defined by the local labor law. Take a look at our quick summary of the most basic employee rights in Hungary!
Hungarian Labor Code defines all aspects of employment in Hungary
The Labor Code protects both employer and employee rights in Hungary. It provides a framework for a healthy employment relationship where both parties know their rights and obligations, and can rest assured that the other party will observe them.
The most important aspects controlled by the Labor code include the employee’s right to:
- compliant employment (labor contract, taxes)
- proper wage and receiving payment on time
- get proper rest and paid holidays
- safe working environment
- trial and notice period
Learn the basics below, or ask our HR experts before you apply for the work permit of your new employee.
Legal requirements for working in Hungary
It is the employer’s responsibility to make sure that the employment relationship complies with legal requirements. In this sense, it is the employee’s right to have these things taken care of for them.
- It is regularly the employer who drafts the labor contract that will define the gross salary, the first day of employment, the daily working hours, the place of work, and the length of the trial and notice period. It will probably contain a detailed job description as well in its annex, although it is not mandatory.
Some “basic” points are considered obvious based on the Labor Code and are often not included in the labor contract, like how the employee must come to work on time and do their job properly, or that the employer must provide a safe work environment and pay on time.
- Tax number: The employee needs an ID number with the Hungarian tax authority based on which they can pay taxes – and the employer must report the start of the employment relationship to the tax authority in advance.
- Social security number: The employee needs an ID number with the Hungarian healthcare system based on which they can pay their social contributions and can receive healthcare services in Hungary.
If you employ a local, they will probably have a tax number and a social security number already. However, when a third-country national arrives to Hungary, this piece of administration must be taken care of before they can start to work.
Paying your employee
While how much you are paying your employee is between the two of you, a minimum wage is defined to make sure your employee receives a living wage. In fact, there are two types of this: “minimum wage” for positions that do not require any special skills, and “guaranteed minimum salary” for positions that need at least a high school diploma. Both are defined in gross, and adjusted yearly. Learn more here.
This gross salary is a monthly salary, and you have to pay your employee by the 10th of the month following performance. However, you will pay your employee only their net salary (gross salary minus taxes), because you will have to pay their taxes to the Tax Authority for them.
Above the monthly salary agreed on in the labor contract, various wage supplements may apply, usually for working outside hours (e.g. overtime, night shifts, working on holidays, etc.). Wage supplements are defined by law, in proportion to the regular salary of your employee. Learn more here.
The right to rest and paid holidays
It is in your best interest as an employer that your employee performs their work in top condition. In line with that, the number of working hours is limited. In a regular “full-time” job, your employee will work 8 hours a day and 5 days a week, so 40 hours a week. (Saturdays are regularly rest days, while Sundays are holidays.) For positions where this setup would not be reasonable or feasible (e.g. truck drivers), there is an option for working time banking were 640 hours may be “depleted” in 16 weeks. However, there is still a maximum number of continuous working hours and a minimum of hours assigned to getting rested between shifts.
Employee rights in Hungary also include paid holidays. Their yearly number depends on the employee’s age, the number of years spent in employment, and marital status, among other things. It is best if the employer and the employee can always agree on when vacation days are taken, but employees have the right to take 7 days a year whenever they want to. Learn more here.
Proper work can only be expected in a safe work environment. You as an employer must provide the right equipment as well as trainings about the job, work safety, and fire safety. You must also organize yearly health check-ups for your employees to make sure they remain fit for work.
Trial period, notice period, termination
The Labor Code protects both the employer and the employee, both at the start and the end of the employment relationship. When hiring a new employee, there is a trial period that can last up to 3 months (may be shorter; its length should be indicated in the labor contract). During this time, both parties are allowed to end the employment relationship without giving a reason and without a notice period.
After the trial period, termination is strictly controlled by law. There is usually a notice period of 30 days, but it might be shorter if termination happens with mutual consent. Learn more here.
Let us help you bring foreign talent to Hungary
When you are bringing a third-country national to work for your Hungarian company, you must be prepared to comply with the local Labor Code and respect employee rights in Hungary. Let us take care of the work permit, and our HR team will assist you in remaining compliant with all regulations relevant to the employment relationship. Just fill in our contact form, send an email to firstname.lastname@example.org, or call our office on +36 1 317 8570. Get in touch today!