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Written Agreements

The Labor Code of Hungary states that employment contracts must be in writing. Failure to record in writing can be invoked by the employee only within 30 days of taking up employment. In the contract, the parties must agree on the employee's basic salary and position, duration of work, working hours, and probationary period. Employers are obliged to inform their employees in writing within 15 days from the date of commencement of the employment relationship regarding working time, wages, benefits, payroll frequency, job functions, notice period, leave, overtime, etc.

Employment contracts can contain non-compete clauses in writing, through which employers require employees to agree not to start a competing business, not to begin working for a competitor during the course of their employment, or for a certain period after the termination of the employee-employer relationship. Such agreements must be made in writing and are valid for a maximum of 2 years. For the duration of the agreement, the compensation cannot be less than one-third of the basic salary for the same period.

Oral Agreements

Employment contracts must only be concluded in writing. Invalidity on the grounds of failure to set the agreement in writing may only be alleged by the employee within 30 days from the first day on which work is commenced.

The law, therefore, allows oral contracts up to day 30 of employment. Beyond this period, they are considered illegal.

Implied Agreements

Hungarian Labor Code does not offer provisions with regards to implied contracts. Employment contracts must only be concluded in writing. Invalidity on the grounds of failure to set the agreement in writing may only be alleged by the employee within 30 days from the first day on which work is commenced.

In Hungary, the daily working time in full-time jobs is eight hours, but based on an agreement between the parties, it may be increased to a maximum of 12 hours for employees working in standby jobs, or who are relatives of the employer or the owner.

An employee's scheduled daily working time may not be under four hours, except for part-time work, and may not exceed 12 hours (24 hours in the case of standby jobs). The weekly working time may not exceed 48 hours (72 hours in the case of standby jobs).

In the case of remote work, the contracting parties must expressly agree on remote working in their employment contracts. Remote employees work no more than one-third of the total working days in a year in their employers' premises. Employers exercise their control right remotely by using a computer technology device. Employers must provide remote employees with all the information they provide to other employees.

The Labor Code lists the following public holidays:

• New Year's Day - January 1
• National Day of Hungary - March 15
• Good Friday - date subject to change annually
• Easter Monday - date subject to change annually
• Labor Day - May 1
• Whit Monday - date subject to change annually
• State Foundation Day - August 20
• National Day - October 23
• All Saint's Day - November 1
• Christmas Day - December 25
• Second Day of Christmas - December 26

Per the Labor Code of Hungary, the parties of an employment contract can agree to a probationary period of up to 3 months from the employment relationship's commencement date. If a shorter probationary period has been stipulated, the parties can extend it once, as long as it does not exceed 3 months. If the employment contract falls under a collective agreement, the probationary period can last up to 6 months.

During the probationary period, either party can exercise the right of termination without notice without reason.

Notice Period

In Hungary, employment relationships can be terminated by either employers or employees, and notice is required. Employees may terminate an indefinite employment contract at any time without giving grounds for termination. However, for fixed-term employment contracts, grounds must be given, and termination is allowed only for justified reasons. The notice period begins on the day following the date when dismissal is communicated.

The notice period must be at least 30 days, but, in the case of dismissal by the employer, it may increase by up to 60 days, depending on the employee's length of service.

Severance Benefits

Employees are entitled to severance pay if they have been working for at least three years for the employer, and the employment relationship is terminated by the employer or upon dissolution of the employer without succession.

Severance payment may vary between one and six months of pay, depending on work seniority. The amount of severance pay increases if the employee is within five years of becoming eligible for a pension.

Employees are not entitled to severance pay if:

• They are recognized as a pensioner at the time when the notice of dismissal is delivered or when the employer is terminated without succession.
• They are dismissed for behavioral reasons, or on grounds other than health reasons.

Minimum Wage

In Hungary, there are 2 types of minimum wages:

• The National Minimum Wage, which is for employees without an official profession, unskilled workers, or employees who are skilled, but work in positions that do not require an official certificate.
• The Guaranteed Minimum Wage is set for professional workers in jobs requiring at least a secondary level of qualifications or vocational training.

Current minimum wage rates (effective from December 2023) are as follows:

In the absence of a contract, the salary must be paid at least once a month. The salary must be paid by the 10th day of the month following the month in question, along with a written pay slip. If the wage payment day falls on a weekly rest day or a public holiday, it must be paid on the previous working day at the latest.

Overtime, Holiday & Vacation Pay

At the employee’s request, overtime work must be ordered in writing. It may be requested on public holidays if the employee can otherwise be required to work on such a day, or in the interest of prevention or mitigation of any imminent danger of accident, natural disaster, or serious damage, or of any threat to health and environment. In connection with full-time jobs, a maximum of 250 hours of overtime work can be ordered within a given calendar year for a single worker.

Overtime pay is set at a 50% supplement based on the base wage for work performed in addition to the daily working time presented in the work schedule. The employer can avoid paying the 50% wage supplement if the employee is given additional equivalent time off. Where overtime work is ordered on the scheduled weekly rest day, a 100% wage supplement must be paid, unless the employer provides another weekly rest day, in which case the supplement is only 50%.

A 100% wage supplement is payable for work performed on any legal public holiday, on Easter or Whit Sunday, or on a Sunday, which would otherwise be a legal public holiday. Employees are also entitled to their regular pay while on annual leave.

Visas

In Hungary, visas are generally required for over 90 days within a 180-day period. These are:

• Visa for entitlement to receive a residence permit (maximum validity is 1 year) is issued for the purpose of collecting the residence permit or the national permanent residence permit, and for stay for a period not exceeding 30 days.
• Seasonal employment visa (maximum validity is one year) is granted for single or multiple entries and for employment for an intended stay of more than 90 days within any 180-day period and maximum 6 months.
• National visa (maximum validity is five years) is issued for single or multiple entries and for stays in the territory of Hungary for an intended stay of more than 90 days within any 180 days under an international agreement.

Hungary joined the Schengen Area on December 21, 2007. From that time, visas and residence permits issued by one of the Schengen Member States are also valid in Hungary, and visas and residence permits issued by Hungarian authorities are, as a general rule, valid for the entire Schengen Area.

Work Permits

In Hungary, a residence permit may be issued for the purpose of employment to third-country nationals, under certain conditions. Generally, they must first sign an employment contract before obtaining a work permit. EU nationals working in Hungary do not typically need a work permit.

The validity period of a residence permit granted for the purpose of employment must not exceed the term specified in the specialist authority’s assessment; that, however, may be extended up to the time indicated in the specialist authority’s assessment given if the procedure was re-opened.