Key Changes to Hungary Labor Law

The Hungarian government made some significant changes to the labor law in the country in early 2020, targeting key issues to ensure the wellbeing of employers and employees as well as job security.

Amendments to Labor Code
For employees with children under four, employers are required to amend their employment to part-time if necessary. Part-time amounts to half the standard daily working time. If the employee has three or more children, the employment is supposed to be adjusted until the youngest child reaches the age of four.

Maternity Leave
Guardian parents are also eligible for maternity leave. Guardian parents are those appointed by a court or agency to take care of children before they go into a permanent foster placement. Employees are also entitled to three years of unpaid leave from the beginning of the time that the child is placed into their custody. If the child is three years or older, employees are entitled to an unpaid leave of up to six months.

Mandatory Written Non-Compete Agreement
A non-compete agreement is a contract between two parties- the worker and the employer. This agreement states that no employee will start a business in the same field as his employer and cannot enter into an employment agreement with another competitor during or after their employment term. In 2020, Hungary made it mandatory for non-compete agreements to be in written form. While many companies already follow this rule, now it has been made compulsory so that the employee and employer can have a safe, trustworthy relationship.

Tax and Contribution Rules
Grandparents childcare benefit was introduced on 1st January for the first time to help those grandparents raising children. The minimum contribution base is meant to be determined based on the minimum wage. Pensioners are not required to pay social security contributions, regardless of the status or form of their employment.

Act of Labor Protection
According to the rules of Act number XC111 of 1993, all employers are required to report their employees’ occupational exposure and record of exposure to carcinogenic or mutagenic substances. This helps to accelerate the reporting and investigation of occupational incidents of diseases that can cause harm to workers or customers. New guidelines clarify the concepts of increased exposure, PPE (personal protective equipment) hazardous material, and unsafe compounds.

To learn more about hiring and employment regulations in Hungary, click here

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