Hungarian employment law

Hungarian labour law aligns with European standards, requiring only minimal content for employment contracts to be valid. In international comparison, Hungarian labour law is still pro-employee, but the legislation has included several flexible, pro-employer elements in the last decade.

Key Points

• Contracts are generally indefinite, but fixed-term contracts are permitted with some safeguards.
• The primary source of labour regulations is statutory law. Still, case law, particularly that of the Supreme Court, significantly impacts applying labour and employment law in practice.
• Collective bargaining plays a limited role, and the number of collective agreements remains low (today only about 18 % of employees are covered by collective agreements).
• Statutory minimum wages are set by government decree, with different levels applying to those with at least secondary education.
• Family-related leave entitlements in Hungary are generally longer than in most EU countries, and employees enjoy relatively strong protection under labour law.
• Working-time regulations are strict and protective for employees.
• Job security is relatively high, employers must provide detailed reasoning when terminating employment.
• There is a general cap on claims for lost income in unlawful employer termination cases set at 12 months of salary.
• Non-EU and non-EEA citizens require residence permits to be employed in Hungary. Obtaining a residence permit involves a complex process, with conditions varying by citizenship, type of activity, qualification and special status of the employer. Employers must demonstrate efforts to fill the position locally before hiring third-country citizens.