Background information

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.

Content of measure

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

Use of measure

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.)

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

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
• Main level of involvement: Unknown

Involvement

No involvement has been reported.

Views and reactions

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

Sources

• 01 August 2010: Act LXXV of 2010 on simplified employment (njt.hu)
• 08 February 2017: Halmos, Szilvia (2017): Az idénymunka munkajogi szabályai. (The rules of seasonal work) (ado.hu)
• 20 January 2020: Ministry of Interior: Jelentés a 2020-ban egyszerűsített foglalkoztatás keretében tervezett foglalkoztatottak számáról (Report on the envisaged number of persons to be employed in 2020 under simplified employment contract) (kozfoglalkoztatas.kormany.hu)
• 16 April 2020: Govt decree 122/2020 (Apr 16) on some exceptional agricultural regulations during the 'state of danger' (njt.hu)
• 17 April 2020: National Tax and Customs Adminimstration (2020): Emelkedett az egyszerűsített foglalkoztatás lehetséges időtartama (Maximum duration of simplified employment raised)
• 16 June 2020: Act LVIII 58/2020 on the state of pandemic emergency (njt.hu)