The Hungarian Government introduced some significant changes to labor law effective as of January 1, 2020. The changes addressed key issues regarding employee welfare and job security. In this article, we address some of the major changes in the 2020 Hungary Labor Code.
Increasing the Scope of Part-Time Work
Effective January 1, 2020, employees with children will be able to request a reduction in their shift hours by half. Those with children under the age of four can file a formal request to switch to part-time work. As per amendments to the 2020 Hungary Labor code, employers are obligated to grant the said request of such employees.
The amendment also states that for employees with three or more children, they can avail of this privilege until their youngest child reaches the age of six.
Mandatory Written Non-Compete Agreements
A non-compete agreement is an agreement between two parties – the employer and the employee. In this agreement, the employee agrees that they will not start a business in the same field as their current employer or will not enter into an employment contract with a competitor, during or after their employment term.
One of the changes in the 2020 Hungary Labor Code makes it mandatory for all non-compete agreements to be in writing. Even though it was already common practice throughout the country, it is now compulsory by law and aims to ensure a smooth-sailing relationship between an employee and employer.
As per the new amendments, guardian parents, those appointed by court or law as official caretakers of a child, are also eligible to apply for maternity leaves. They now qualify for up to three years of unpaid leave from the moment the child comes into their custody, provided the child is less than three years old. If the child is aged three or older, they can receive up to six months of unpaid leave.
Minimum Wage Increase and Guarantee
Another significant change in the 2020 Hungary Labor Code is the guaranteed minimum wage and minimum wage increase. Both have been increased by 8%, taking the guaranteed minimum wage to EUR 635 and minimum wage to EUR 486.
Tax and Contribution Roles
As of January 1, 2020, grandparents are liable to receive childcare benefits. The contribution rate will depend upon the minimum wage rate and will be calculated based upon the latest increment.
As of July 1, 2020, pensioners are also no longer obligated to pay social security no matter what their prior form of employment.
Latest Provisions in the Labor Protection Act
As per the rules stated in the 1993 Labor protection act, employers must provide a detailed report regarding employees’ occupational exposure. They are also supposed to maintain a detailed record of employee exposure to toxic or carcinogenic substances as well as chemicals that can possibly cause mutations and other health defects.
A new term, ‘hazardous compounds,’ was added to the list of must record substances. Concepts of increased exposure, the need for personal protective equipment, and hazardous materials were also introduced in the 2020 Hungary Labor Code Changes.