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Coronavirus – Employment law measures - Hungary

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The Government has modified the previously introduced wage subsidies: wage subsidies for researcher and developer employees and short-time allowance can be applied for on more favourable terms, moreover, the application process has been simplified.

We summarize the changes below.

Subsidies for employers of researchers and developers

The conditions of wage subsidies for researcher and developer employees have remained almost unchanged. However, the employer is no longer obliged to maintain its average statistical workforce if it decides to apply. Accordingly, the employers can terminate other employees’ employment in accordance with the provisions of the Labour Code, and thus will be still entitled to the allowance.

Regarding the subsidy, more information can be found in our previous newsletter.

Short-time allowance (Hungarian Kurzarbeit) - reconsidered

One of the most significant change is that the subsidy can be applied for even in case of a 75% reduction in working hours. Under the new rules, reduction of working hours means working hours that are stipulated in the amended employment contract if on average over a three-month period it reaches at least the 25% but not more than 85% of the working hours before the change.

In the case of working hours of 8 hours per day, this means that those who agreed to reduced daily working hours of a minimum of 2 hours (25%) but a maximum of 6 hours 48 minutes (85%) are eligible for the benefit.

How much is the short-time allowance?

The amount of allowance is 70 % of the basic wage of the employee due for the lost working hours determined according to the general rules that is deducted with the personal income tax and contributions, i.e. 70 % of the net salary due for the lost working hours. The short-time allowance is due for maximum of 3 months.

The monthly amount of the short-time allowance may not exceed twice the mandatory minimum wage and may not be paid during unpaid leave. The allowance is free of public charges.

Considering the amount of net monthly minimum wage is HUF 107,065, the maximum amount of allowance in the case of 75% reduced working hours may not exceed approximately HUF 112,000 per employee (107,065 * 2) * 0.75 * 0.7 = 112,418).

How do you apply for the employment allowance in Hungary?

The short-time allowance is determined for the employee by the capital (Budapest) and county government offices acting as the state employment body at the joint request of the employee and the employer. The employer may submit the application for support electronically during the period of the emergency or within one month after the end of the emergency using an application form published on the website of the Public Employment Service (in Hungarian: ‘Nemzeti Foglalkoztatási Szolgálat’):

What are the other favourable conditions compared to the previous rules?

The employer should not enclose to the application form the agreement on reduced working hours and individual development time. At the time of decision on the subsidy, the employment contract is automatically amended by the virtue of the decision of government office - regarding the reduced working hours and the individual development time - as set out in the application, if the parties have not amended their employment contract accordingly.

Individual development time is only mandatory if the reduced working hours exceeds half of the working hours before the reduction. If the reduction is less, there is no need to agree on individual development time.

The employer must pay salary after the reduced working hours. In the event that the reduced working hours exceeds half of the working hours before the reduction (‘original’ working hours), the employer must also undertake that the amount of salary paid, together with the allowance, reaches the employee's original basic salary in force on the date of application. However, if the reduced working hours are less than half of the original working hours, the salary, together with the allowance, does not have to reach the employee's original basic salary.

The employer should not indicate in the application the economic circumstances justifying the application, their direct and close link with the emergency, the measures taken and expected to be taken to overcome the economic difficulties. And the employer should not

demonstrate that it has exhausted the possibilities for rescheduling work before the time of application.

The expiration or termination of the working time banking is not a condition for the application.

The employer is obliged to maintain the number of employees only in respect of the employee concerned by the application.

The allowance is also available in the case of agency work.

The amendments are included in the Government Decree 141/2020. (IV. 21.) entering into force on the 8th day after its publication, meaning that the new rules are applicable from April 29, 2020.