Guide to employing in Hungary

Employees are entitled to be paid annual leave based on the time spent at the contract. The days increases based on the age of the employee, the number of children in the family or other special health conditions.

Statutory paid leave is 20 days per year and increases with +1 day in every 3 years until the employee’s age reaches 45 when a max +10 days vacation applies.

Extra vacation days are applicable to both parents based on the number of children:
For 1 child: + 2 days
For 2 children: + 4 days
For 3 children or more: + 7 days

An employee is entitled to 15 sick-leave days yearly while enrolled in the national social security system. During this 15 days of period employees must receive max. 70% of their base gross salary which is paid by the Employer.

After 15 days, the amount paid varies from 50% – 70% depending on employment social security coverage the employee has had 760 days backwards.

The sick leave allowance gets paid one third by the employer and the remaining amount is paid by the state. Sick leave is required to be proved by a medical certificate issued by a local certified doctor (GP). Such a certificate is to be provided to the local payroll immediately in every 8 days. Sick leave is maximized in one year if such leave occurs during termination period.

Expecting women have 24 weeks maternity leave, but are allowed to take up to three years off and receive maternity benefits. The maternity leave have to start 4 weeks prior to the scheduled delivery date unless the employee would like to work up to the delivery day on her own risk.

After delivery and for the first 6 months, a woman receives 70 % of her base salary paid by the State; this support is called Pregnancy and Confinement Benefit. For the next 18 months, until the child’s 2nd birthday, a Child Care Fee is available, however the employee is entitled to work part-time and still receiving this benefit by the State.

The father is entitled to 5 (five) days off for paternity leave which the employer must allocate within two months following the date of birth upon the father’s request. As a paternity leave, the father can take a leave instead of the mother until the child reaches 2 years of age.

Employees are entitled to short-term and paid child care leave. This type of special leave is certified by the employee’s GP.

Unpaid leave: Unpaid leave can only be defined as quasi extraordinary vacation without pay, which is an opportunity, but also there are compulsory cases according to the Hungarian Labour Law for reasons.

Employees shall convey the request for leave of absence without pay in writing, at least fifteen days in advance, for example for Long-term child care leave

Compassionate leave: when a close family member (i.e spouse or grandparents) of the employee is seriously or life-threateningly ill or be in such and requires care.

Emergency and short absence leave

Military service

The termination by mutual consent is not regulated by expressed Hungarian Labour Law provisions, because termination by mutual consent allows the employer and employee to agree freely but in written agreement with each other on the conditions of termination.

However terminating employment this way is a very common and highly supported practice due to parties waiving all further claims, subject to individual severance payment and notice period.

An employment relationship may be terminated by the employee or the employer by notice. If so, agreed by the parties, the employment relationship may not be terminated by notice for a period of up to one year from the date of commencement of the employment relationship.

Employers must justify their dismissals in writing. The reasons must be clearly specified, authentic and substantial. Reasons for termination by notice may be in connection with the employer’s behaviour in relation to the employment relationship, with the employee’s ability or in connection with the employer’s operations.

The employer shall be permitted to terminate a fixed-term employment relationship by notice:

• if undergoing liquidation or bankruptcy proceedings; or
• for reasons related to the employee’s ability; or
• if maintaining the employment relationship is no longer possible due to unavoidable external reasons.

Statutory notice period is 30 days but where employment terminated by Employer the thirty-day notice period shall be extended depending on the duration of the employment.

Employer or Employee may terminate an employment relationship without notice if the other party:

• wilfully or by gross negligence commits a grave violation of any substantive obligations arising from the employment relationship; or
• otherwise engages in conduct that would render the employment relationship impossible.

The right of termination without notice may be exercised within a period of fifteen days of gaining knowledge of the grounds. Therefore, in any case within not more than one year of the occurrence of such grounds, or in the event of a criminal offense up to the statute of limitation.

In case of termination without notice, the justification is obligatory for the employer or the employee as well.

The employee is entitled to severance pay if the employer terminates the employment relationship by ordinary termination with notice; the employees are entitled to receive varying amounts of severance pay depending on the length of employment with the employer.