Labor law regulations

As a general rule, the labor law of the sending country must be applied in case of an assignment. Only certain minimum requirements regulating working conditions in the host country apply to the employee on assignment.

Hungarian law (Labor Code) must be applied, including the provisions of collective agreements extended to employment relationships, as follows (Labor Code §295):

1. the maximum working hours or the minimum rest period,
2. the minimum amount of paid annual leave,
3. the minimum wage,
4. the conditions for temporary agency work as defined in §§214-222,
5. occupational safety conditions,
6. employment and working conditions for pregnant women, women with young children, and young workers, and
7. the requirement for equal treatment.

Hungarian law does not need to be applied if the law otherwise applicable to the employment relationship is more favorable to the employee in the above cases.

In the event of a possible assignment to Hungary, it is necessary to examine whether the regulations of the sending country are more favorable to the employee in the highlighted subjects above. If more favorable, then the law of the sending country will fully apply during the assignment. If not, then Hungarian labor law norms will apply in the specified cases (e.g., maximum working hours or minimum rest period).

In non-specified cases (e.g., breaks, work on Sundays or public holidays), the law of the sending country generally prevails.

For practical reasons (to avoid legal disputes arising from the differences between the legal systems of the sending and host countries), in cases where the Labour Code will necessarily be applicable (i.e., where Hungarian regulations are more favorable in the matters listed above), it is advisable for the parties to stipulate Hungarian law for the duration of the assignment.

Administrative obligations related to assignments:

The company receiving the assigned employees must pay special attention to the following legal obligations:

Before concluding the contract for the provision of services, the entitled party (the receiving Hungarian company) is obliged to inform the foreign employer in writing about the applicable working conditions based on Section 295. In case of failure to provide this information, the entitled party shall be liable as a surety for the employee's claims specified in Section 295."

If the entitled party knew or should have known with due diligence that the foreign employer did not fulfill its wage and contribution payment obligations during the employment of the employee, the entitled party is jointly and severally liable with the foreign employer for the payment of the wages and contributions owed by the foreign employer

The entitled party must ensure that the following documents of the assigned employees are accessible and verifiable at the place of work during the entire assignment period and at the employer's headquarters or premises for 3 years after the assignment ends:

1. employment contract or equivalent document,
2. working time records, and
3. documents related to wage payment, either in paper or electronic form.

In the absence of clear provisions, it is recommended to keep the working time records in both Hungarian and English.

The foreign employer designates a person responsible for liaising with the labor authority acting as the designated authority and for sending and receiving the above documents. The foreign employer must immediately inform the labor authority about the appointed person and any changes in the appointed person.

Reporting obligations 

Several notifications may be required depending on the duration of the assignment.

Reporting obligation to the employment supervisory authority

To determine whether the employee is indeed considered an assigned employee, the authority must know the details of the employment. Therefore, notification to the authority is required before the actual start of the assignment.

The notification must generally be made by the foreign employer, but anyone can make the notification, including the person appointed by the foreign employer or the receiving Hungarian company.

The notification must include data about the service provider, the activity, and the employment. The notification must be made on the electronic platform operated by the employment supervisory authority, which was renewed on 1 March 2024 (https://mvff.munka.hu/#/kikuldetes). Pre-registration is required, and those who were registered on the old platform must re-register on the new platform.

Reporting obligation to the tax authority 

The reporting obligation is related to the personal income tax payment obligation arising from Act CXVII of 1995 on Personal Income Tax or the double taxation avoidance agreement or reciprocity applicable to it, so the receiving party is not subject to this reporting obligation for those assigned employees who are not expected to have a personal income tax payment obligation.

Where there is an obligation to pay personal income tax, a notification will be necessary. The reason for this is that the tax authority will be informed about those individuals who are not yet registered in its records but have tax obligations.

Failing to submit the notification can result in a default penalty of up to 500,000 HUF per notification.

The notification must be made by the legal entity or other organization employing the foreign-resident employee assigned for non-dependent activity. This notification must be made using the T104 form with the general form-filling (ányk) program.

The notification must be made within 30 days from the start of the activity. It must include basic data about the assigned employee and the foreign employer, as well as the start and end dates of the employment. The end of the employment must also be reported. This can be done 30 days before the end of the employment or leaving the country. If the information is not available within the deadline for some reason, the notification must be made the day after the end of the employment, stating the reason.