Legal amendments concerning employment

The effective regulation of employment changes significantly from 2010. The changes concern the temporary work booklet, the termination of the employer without legal succession, contracted staff and child care allowance. In the current issue of our newsletter, we provide information on the main changes from the regulation applied in 2009.

Elimination of the temporary work booklet, simplified employment

The temporary work booklet is eliminated from 1st April, 2010. The booklets have to be submitted to the Employment Bureau until 31st July, 2010.

The temporary work booklet will be replaced by the concept of so-called simplified employment. The employer must conclude an employment contract of a certain content with the employee if the period of the employee's work exceeds 5 consecutive days. In addition, the employer must register the employment of the employee electronically with the Hungaryian Tax Authority prior to the commencement of work.

If the employment of the employee does not exceed 5 days, an attendance sheet but the employment must be registered with Tax Authority in this case as well.

The employment of the employee may be registered by phone or electronically. In special cases the registration is done annually until the 12th of January of the year following the current year.

Cases of simplified employment:

• The employment is considered temporary if the term of the employment for a definite period does not exceed (i) 5 calendar days; (ii) maximum 15 calendar days monthly, or (iii) maximum 90 calendar days annually.
• The employment is seasonal (in agriculture; in tourism) and it does not exceed 31 days and, in case of employment in tourism it does not extend beyond the period of the season (e.g. Skiing season).
• The employment takes place in the household of a natural person.
• Employment by a public benefit organization.

Termination of the employer without legal succession

In the case of termination of the employer without legal succession, from 1st January, 2010, the appointed liquidator has an obligation to inform the competent state authorities of the relevant region 30 days before the termination similarly as in the case of group layoffs. The information must contain the expected date of termination of the employer without legal succession and the number of employees concerned.

Legal amendments concerning contracted staff

Based on the decision of the Constitutional Court, the rules of granting holidays change in the case of contracted staff. The employer must inform the employee of the holiday period at least a month before the starting date of the holidays.

The rules of imposing labour penalty are altered as well. According to the act, the employer is exempted from the labour penalty if he has fulfilled his obligation to register employment prior to the date of commencement of the labour audit in respect of the entire period of the employment or if the reporting obligation is fulfilled by another person instead of the employer based on a special regulation.

Changes concerning child care allowance

In accordance with the law effective from 1st May, 2010, the period of child care allowance (gyes) payment reduces from three to two years. However, the Labour Code does not shorten the period of the prohibition on the termination of employment in this regard, i.e. the employment termination prohibition remains in place until the child reaches the age of 3 years in respect of the parent, which most recently used unpaid leave to take care of the child.

Also from 1st May, 2010, a modification is introduced in respect of employees intending to adopt a child. The adoption is preceded by a mandatory care period therefore, the employee is entitled to the protection under the employment termination prohibition for a maximum period of six months from the starting date of the mandatory care.

The period of employment required for eligibility for the benefits connected to the recipient's employment or period of insurance, i.e. for pregnancy and confinement benefit (tgyás) and for child care fee (gyed) increases from 180 days to 365 days. This means that in the 2-year period before giving birth and applying for child care fee, the mother must have been in employment for at least 365 days to be eligible for pregnancy and confinement benefit and child care fee.

A further change concerning pregnancy and confinement benefit and child care fee is that not all of the period of attending college/university but only 180 days of it may be considered in the period qualifying the mother for these benefits. According to calculations of the Ministry of Social Affairs, the changes concerning child care fee will hardly affect 5 percent of the recipients. Child care fee will still be paid until the child reaches the age of 2 years.

No period of employment requirement will apply to child care allowance in the future either but the period of child care allowance payment will be cut from three years to two with the exception of twins. As previously, in case of having twins, the mother will receive the allowance until the end of the year in which the children reach school-age.

In the past, parents raising three or more children were eligible for child raising support (gyet) from the third until the eighth birthday of the youngest child. The amendment extends this period to start from the second birthday of the youngest child instead of the third. The end of the period of eligibility remains the same. This means that full-time mothers win one year.

Should you have any questions regarding the above, do not hesitate to contact our colleagues (phone: +36 1 886 3700, e-mail: edina.pentz@rsmdtm.hu).

The Newsletter contains general information. Therefore, the content of the Newsletter may not be regarded as professional advice or comprehensive information for decision-making. This information – due to its nature – may not address all details, especially all circumstances of a certain transaction. Although we used every effort for our Newsletter to be comprehensive, we cannot assume liability for the outlining and interpretation of the relevant regulations.