New provisions for the Hungarian Act on Labor Code and the Act on Labor Inspection came into force in order to introduce the provisions of Directive 2014/67/EU of the European Parliament and of the Council on the enforcement of Directive 96/71/EC into Hungarian legislation; this concerning the posting (assignment) of workers who provide services. Based on the implementation of the Directive, additional administrative obligations arise in Hungary regarding the foreign individuals who perform work activities in Hungary.
This amended legislation imposes registration and reporting obligations on companies located within the EEA and who post or assign their employee(s) to Hungary in order to provide services. The regulation is also applicable if companies post or assign employee to their Hungarian establishment or subsidiary.
The obligations shall be fulfilled electronically (in Hungarian or English language) via the labor inspectorate website of the Hungarian Ministry of National Economy. The following data are required to fulfill the registration: foreign company’s data, information relating to the nature of the work activity, details of the foreign company’s contact person. (This contact person should be an individual who is able to represent the Company before the Hungarian Authorities at any time upon request.)
The registration shall be filed by the foreign company by the first Hungarian workday of the employee. In the case of ongoing assignments, the obligation shall be fulfilled by 31 August 2016.
Besides the registration and reporting obligations, foreign companies are obliged to apply the rules of Hungarian Labor Code to their employment relationships with the assignee with regards the maximum working hours, minimum paid annual holidays, the minimum wage, health, safety and hygiene issues at work and provisions for non-discrimination – unless the law applicable for the assignee’s employment is more favorable to the employees than the Hungarian rules.
However, these provisions shall not apply in certain cases, e.g.:
Prior to the start of the posting (assignment), the Hungarian company shall inform the foreign company about the above described labor rules applicable in Hungary. If the Hungarian company does not provide the information described above or if it can be proved that the Hungarian company had information that the foreign company does not meet the mentioned requirements, the Hungarian and foreign companies shall be subject to full financial liability for the payment of the salary and related social security contributions.
Furthermore, the Hungarian company is obliged to keep, and upon request disclose to the authorities, documentation concerning the assignee (e.g.: employment contract, time-sheets, proof of payment) during the period of the employee’s Hungarian posting (assignment) and for a further 3 years following the end of the posting (assignment).