Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2010-32/2653 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Open ended, started on 01 August 2010|
|Context||COVID-19, Restructuring Support Instruments|
|Type||Legislations or other statutory regulations|
Ensuring business continuity and support for essential services
– Mobilisation of a larger workforce
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||23 June 2022 (updated 10 November 2022)|
Set up in 2010 by Act LXXV as an improvement to the casual employee’s booklet (alkalmi munkavállalói könyv), the 'simplified employment' system aimed at maintaining the flexibility of work while preventing undeclared work. Simplified employment is never compulsory and the parties are free to choose the conventional employment relationship even if the contract is stipulated only for a few days and a worker can have a simplified employment relationship simultaneously with more than one employer. The 'simplified employment' system covers two types of temporary work: casual work (in all sectors) and seasonal work in agriculture and tourism. Seasonal work means that the work can be performed only during a certain part or period of the year, and such seasonality is based on objective reasons and is thus not a question of how the work is organised.
The 'simplified employment' system is prohibited if there is already an employment relationship between the parties. Similarly, an already concluded employment contract cannot be replaced with simplified employment. The employer cannot employ the same worker using simplified employment for over 120 days in a given year.
Generally, any employer (natural or legal person) can make use of the 'simplified employment' system, but if in the public sector, only outside the core activities (for example, a public hospital can employ casual workers as janitors, but not as nurses). Employers with HUF 300,000 (approximately €900) or more unpaid and overdue taxes are excluded from simplified employment.
The distinguishing features of the simplified employment system include the fact that a written employment contract is never a requirement. But if the employer wishes, or the employee insists on a written contract, they can use the contract template provided as an appendix to the law.
Moreover, working time can be scheduled unequally – for example, three hours on one day and five hours on another. Also, working time can be scheduled on Sundays and public holidays according to the wishes of the employer, without having to pay the (otherwise statutory) Sunday wage supplement (the public holiday wage supplement, however, does apply). This way, the simplified employment rules permit flexibility in terms of seasonal and agricultural work, while still protecting employees and preventing undeclared work. An important feature of simplified employment is that registered jobseekers do not need to notify the employment services about the simplified employment relationship. This means that they can retain their jobseeker status, without interruption, for the duration of the simplified employment relationship.
From the employer’s point of view, simplified employment is flexible, with low administrative costs. Savings include no sick leave, lower tax obligation (flat-tax is paid per day). For non-qualified employees, the minimum wage is 85% of the generic minimum wage. In the case of qualified workers, the minimum amount is 87% of the ’guaranteed wage minimum’ – which is the official name of the minimum wage for qualified workers.
For the employee, simplified employment is a concrete and attractive alternative to undeclared work, especially for workers on the periphery of the labour market, as it earns pension and unemployment eligibility. Lower taxes mean a higher net income for the worker and casual work can sometimes lead to permanent contracts. It is useful for people re-entering the labour market after a prolonged leave or long-term unemployment.
Due to the low level of tax, however, employees in simplified employment are not covered by full social security. They are eligible only for pensions, accident-related health services and unemployment benefits (SE Art. 10).
The employer faces strict working time limits, work duration and headcount limits (for casual workers), such as how many casual workers can be employed simultaneously and for how long. Casual and seasonal workers are not considered as employees in most state tenders, which means a company may be excluded when a high number of employees is required. Most employers use the template contract annexed to the law, but this does not contain any reference to a probation period or special rules on responsibility for damages, even though these could be used in simplified employment. However, most employers are not familiar with the possibilities beyond the template.
Tax rules encourage the employer to keep wages low, around the minimum wage, and while working time rules are more flexible, sick leave and other unpaid leave are not guaranteed
According to a 2021 ministry report, the average number of persons involved in simplified employment decreased by 5.9% to 301,486 in a monthly average in 2020, after years of growth. The number of days worked in simplified employment rose by 0.7% to 14,474,491 in 2020. While the decrease in the number of seasonal workers in agriculture is a continuation of a long-term trend, the decrease in the number of seasonal workers in tourism and the number of casual workers is a disruption of the previous growing trend, probably a consequence of the pandemic. (The report covers the evolution of simplified employment only for the six months from May to October, the busiest period regarding seasonal work.)
Employees in standard employment
||Applies to all businesses||Does not apply to citizens|
No special funding required
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||No involvement||No involvement|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
No involvement has been reported.
The employment service’s department head observed that employers might use simplified employment to replace fixed-term contracts under the Labour Code and save social security contributions
Eurofound (2022), Simplified employment, measure HU-2010-32/2653 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2010-32_2653.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.