Background Checks

Employers must inform employees about the processing of their personal data, including which data is being handled and for what purpose. Disclosure of employee-related facts, data, or opinions to third parties is only allowed if permitted by law or with the employee’s consent.

• Employees can only be required to provide information that is essential for establishing, fulfilling, or terminating the employment relationship and does not violate their personal rights.
• These are only permissible if prescribed by employment-related regulations or necessary for exercising a right or fulfilling an obligation defined by such regulations.

Verification and New Hire Reporting

Special conditions for establishing an employment relationship (Title 24/A, 44/A and below, prohibition with whom employers cannot employ if employer carries out education, supervision, care and medical treatment of a person under the age of 18, or who provides services related to leisure, entertainment and sports for a person under the age of 18).

Employers must report new hires to the National Tax and Customs Administration (NAV) before the employee starts work.

Onboarding Process & Documentation

Collecting Required Documentation

• Personal identification (ID/passport)
• Tax identification number
• Social security number
• Bank account details
• Proof of education or qualifications

Providing Employee Rights and Obligations

Employers must provide a written employment contract.

• Within 7 days of starting, employees must receive written information about:
• Job duties
• Working hours
• Salary
• Leave entitlements
• Termination conditions

Healthcare

Hungary operates a mandatory state health insurance system, which is funded through social security contributions made by both employers and employees. This system ensures that all legally employed individuals are covered and have access to public healthcare services.

Employers are legally required to:

• Register employees with the National Health Insurance Fund of Hungary (NEAK).
• Calculate and deduct the appropriate social security contributions from employees’ salaries.
• Remit these contributions—including the health insurance portion—to the National Tax and Customs Administration (NAV) on a monthly basis.

Proof of employment and contribution payments is generally sufficient for employees to access healthcare services under the public system.

Supplementary Private Health Insurance While participation in the public healthcare system is mandatory, many employers—especially in competitive sectors—offer private health insurance as an additional benefit. Though not legally required, this is a highly valued perk among employees.

Employers typically:

• Partner with private insurance providers to offer group health plans.
• Cover the full or partial cost of premiums.
• Choose plans that offer faster access, private hospital care, and broader coverage than the public system.

The scope of coverage and services varies depending on the policy selected by the employer.

Retirement

Hungary’s mandatory pension system is a pay-as-you-go (PAYG) state pension scheme covering all employed individuals and recipients of unemployment and certain childcare benefits. This defined-benefit system is based on earnings and includes old-age pensions, a unique pension benefit for women with a “40 years eligibility period,” and survivors’ pension benefits.

• Minimum Old-Age Pension: Set at 28,500 HUF ($80.26 USD) per month for individuals with at least 20 years of service, affecting fewer than 200 individuals.
• Working Pensioners: Pensioners can receive benefits while working in the private sector without income limitations. In the public sector, pension payments are suspended, except for certain roles in education and social services.
• Early Retirement for Women: Women can retire with full pension benefits after accumulating 40 years of eligibility, including time spent in employment and child-raising or nursing fees. The eligibility period is reduced by one year per child raised, up to eight years for five or more children.
• Survivors’ Benefits: Based on the deceased’s pension entitlement, including pensions for widows/widowers, parental pensions, and allowances for orphaned children.

Employment Contract Details

• Written Form: All employment contracts must be documented in writing to be legally valid.
• Essential Elements: Contracts should include job title, job description, work location, salary, and working hours.
• Duration: Contracts can be of indefinite or fixed-term duration. Fixed-term contracts should specify a clear end date.

Probation Period

A probationary period can be applied, during which either party can terminate the contract without providing justification. This period should not exceed three months.

Visas

Overview of Visa Types

• Short-Stay Visa (Schengen Visa)
  • Tourism or Business: For visits less than 90 days for tourism or business meetings, a Schengen Visa (Type C) is required.
  • Transit: An airport transit visa (Type A) may be required unless exempted.
• Long-Stay Visa (National Visa)
  • Work Visa: For foreign nationals with employment in Hungary.
  • Student Visa: For individuals accepted into Hungarian educational institutions.
  • Family Reunification: For family members of Hungarian residents or citizens.

Visa Application Process

• Determine the Type of Visa Needed
  • Identify whether your stay requires a short-stay or long-stay visa.
• Gather Required Documents
  • Application Form: Complete and sign the visa application form.
  • Passport: Valid for at least three months beyond the intended stay, with at least two blank pages.
  • Photographs: Recent passport-sized photographs.
  • Proof of Accommodation: Document proving where you will stay (hotel reservations, invitation letter, etc.).
  • Travel Itinerary: Detailed plan of activities and travel tickets.
  • Financial Means: Evidence of sufficient funds.
  • Travel Insurance: Coverage for medical emergencies, valid across Schengen countries.
  • Additional Documents: Specific to the visa type, like employment contract or letter of admission.
• Schedule an Appointment
  • Contact the nearest Hungarian consulate or visa application center to schedule an appointment.
• Attend the Appointment
  • Attend the appointment with all required documentation and be prepared to answer questions.
• Pay the Visa Fee
  • Pay the applicable visa fee during the application process.
• Wait for Processing
  • Visa processing times vary, so apply well in advance of your planned travel.

Additional Considerations

• Recent Changes: Always check for recent changes to visa policies or entry requirements.
• Consultation: Consulting with immigration lawyers or visa specialists can help streamline the process.
• Border Control: Possession of a visa does not guarantee entry; border control officers may require proof of compliance with entry conditions.

Independent Contractors

Contractors work independently, using their equipment, and can allocate their working hours

• If a mandate agreement resembles typical employment characteristics, it may be re-qualified as an employment relationship.
• Contract Length can be for a definite or indefinite period, including framework agreements for repeated services.

Paid Time Off

Employees are entitled to a minimum of 20 workdays of paid leave annually.

• Additional days are added based on age, with an increase after every few years up to a certain limit. For example, employees over 25 receive an extra day, and over 45 receive ten extra days.

Public Holidays

• Jan 1: New Year’s Day
• Revolution Day
• Good Friday
• Easter Monday
• May 1: Labor Day
• Whit Monday
• Saint Stephen’s Day
• Republic Day
• All Saints’ Day
• Dec 25: Christmas Day
• Dec 26: 2nd Day of Christmas

Bereavement

While not federally mandated, most companies allow employees 2 days leave in the event of a death of family member.

Maternity Leave

Employees are entitled to 24 weeks, extendable up to 3 years.

• First 6 months: Pregnancy and Confinement Benefit (CSED) at 70% of salary.
• Next 18 months: Child Care Fee (GYED) at 70% of salary, capped at double the minimum wage.
• Child Home Care Allowance (GYES): Available for parents or grandparents until the child is 3 years old.

Paternity Leave

Employees are entitled to 10 days (12 days for multiple/complicated births) to be taken within 2 months following birth.

Parental Leave

Fathers and mothers with at least 1 year of continuous employment is entitled to 44 working days of leave until the child reaches 3 years of age.

Sick Leave

Employees are entitled to 15 days of paid sick leave, during which they receive 70% of their average salary from the past six months, paid by the employer.

If the illness extends beyond the 15th day, employees can take additional leave for up to one year, or indefinitely in the case of a work-related accident. During this extended leave, the sick pay is divided, with one-third covered by the employer and two-thirds by the National Health Insurance Fund.

Termination Requirements

If the employer terminates an indefinite employment contract by dismissal notice, the employer must provide written reasoning (except for retired employees) based on only the following reasons:

• The employee’s behavior at work (e.g., not fulfilling obligations, being unable to cooperate with colleagues, causing a breach of trust, etc.).
• The employee’s skills mismatch (e.g., lack of the right abilities, capabilities, knowledge, etc.).
• Company operations (e.g., reorganization within the company, “quality replacement” with a better qualified employee).
• The reason for termination must be factual, reasonable, and clear.

The employer has the right to terminate the employment contract with immediate effect under specific circumstances:

• Significantly breaches any substantial obligations deriving from the employment contract, willfully or with gross negligence.
• Behaves in a way that makes the continuance of the employment impossible.
• The breach of an obligation from the employment relationship must be significant to enable the employer/employee to terminate the employment relationship immediately. However, the significance of the breach correlates not to the amount of the damages occurred but to the degree of the gravity of the breach.

Notice Period

The standard notice period is 30 days, which may increase based on the length of employment.

• After three years of service, five additional days’ notice.
• After five years of service, 15 additional days’ notice.
• After eight years of service, 20 additional days’ notice.
• After ten years of service, 25 additional days’ notice.
• After fifteen years of service, 30 additional days’ notice.
• After eighteen years of service, 40 additional days’ notice.
• After twenty years of service, 60 additional days’ notice.

Severance Pay

Employees are eligible for severance pay based on the length of their employment after three years of service. The amount increases progressively, starting from one month’s salary after three years, up to six months’ salary after 25 years or more. Severance is not required when using a fixed-term contract.

Unemployment Insurance

Unemployment insurance in Hungary is contribution-based, with both employers and employees making contributions. The scheme includes active and passive labor market measures to support employment and provide for unemployed individuals. Placement services are available to all residents, including EEA nationals, regardless of insurance status.

Anti-Discrimination Practices

Employers must adjust the work environment, including tools and equipment, to enable employees with disabilities to perform their jobs effectively. Financial support from the central budget is available to help cover these costs. Additionally, employers must ensure the recruitment process is accessible to persons with disabilities, provided the job vacancy is publicly advertised, the applicant has communicated their specific needs, and accommodations do not impose a disproportionate burden on the employer.

Employers who hire workers with reduced work capacity are eligible for support from the central budget, as defined by specific regulations. These requirements apply exclusively to persons with disabilities and do not address religious needs. There are few court cases dealing with religious discrimination, and none have involved reasonable accommodation.

Recruitment processes must be free from discrimination based on gender, age, race, religion, disability, or other protected characteristics.

Employers must observe the requirement of equal treatment during the job interview process, throughout the entire period of employment, and also at the time of termination.

Harassment

Harassment involves behavior connected to a protected characteristic that violates human dignity and creates a hostile or offensive environment. It can result from active or passive conduct, whether one-time, ongoing, or recurring, and does not require intent. Employers are liable if they fail to act upon learning of harassment.

• Employers must uphold equal treatment and are accountable for workplace harassment.
• Employers are required to protect employees from harassment and psychosocial risks, such as workplace stress or conditions leading to psychosomatic illnesses, ensuring measures are in place to safeguard employee well-being.

Equal Pay

• Protected Characteristics: Includes an open-ended list, broader than other European countries, such as family status, social origin, financial situation, and part-time or fixed-term employment.
• Burden of Proof: Lighter for claimants due to the extensive list of protected characteristics.

Types of Violations

• Direct Discrimination: Less favorable treatment based on actual or perceived protected characteristics.
• Indirect Discrimination: Provisions that disproportionately disadvantage individuals with protected characteristics.
• Harassment: Behavior that violates human dignity and creates an intimidating or hostile environment.
• Unlawful Segregation: Separation of individuals based on protected characteristics without legal authorization.
• Retaliation: Harm or threats to individuals who raise concerns or participate in actions addressing violations.

Exceptions

• Job Nature or Organizational Ethos: Discrimination may be justified if proportionate and serving a legitimate purpose.

Preferential treatment to eliminate inequalities is allowed if based on law, government decree, or authorized collective agreements, and is temporary or condition-specific. Must not violate fundamental rights or exclude individual circumstances.

Workplace Safety Standards

Employers are required to implement safety measures, conduct risk assessments, eliminate hazards, and prioritize collective protections over personal protective equipment. They must also develop prevention strategies, maintain documentation, and provide health education, with costs not passed on to employees. The law applies to all organized working activities, covering workplace installations and safety requirements. Accident insurance is funded through a uniform social contribution tax, providing no direct financial incentive for employers to reduce workplace hazards.

Workers’ Compensation

Governed by Hungary’s Social Security Act. Employers must contribute to social insurance, which covers workplace injuries and occupational diseases. Employees are entitled to sick pay and disability benefits through the national health insurance system.

Labor Law Sanctions

Hungarian Labor Code (Act I of 2012):

• This is the primary legal framework governing employment relationships in Hungary. It covers contracts, working hours, wages, leave, and termination procedures.

Sanctions for violations include:

• Administrative fines for failing to register employees, underpaying wages, or violating working time limits.
• Suspension of business operations in cases of repeated or serious non-compliance.
• Civil liability, such as court-ordered compensation for wrongful dismissal or discrimination.

EU Working Time Directive: Implemented in Hungary, this directive ensures minimum standards for working hours, rest periods, and paid leave. Sanctions:

• Fines for exceeding maximum working hours or failing to provide rest breaks.
• Legal action by employees or labor inspectors for non-compliance.

Forced Labor and Undeclared Work: Hungary enforces EU Regulation 2024/3015, which prohibits forced labor and mandates action against undeclared work. Sanctions:

• Criminal prosecution for forced labor or exploitation.
• Heavy fines and business license revocation for employing undeclared workers