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Employment of foreign citizens in Hungary! Registration obligations relating to foreigners employed in Hungary!

Globalization and the expansion of international relationships also have an impact on employment.

Statistics confirm that the number of people leaving their country of birth permanently or temporarily to try their luck abroad is growing year on year and so is the number of people coming to work in Hungary from other countries, of course.

Before discussing matters of employment of foreigners, I have to note that according to Hungarian regulations, different rules apply to the employment of citizens of the European Economic Area (the EU + Norway, Iceland and Liechtenstein) and Switzerland and citizens of third countries in Hungary.

Employment of EU/EEA and Swiss citizens, registration of their employment

Citizens of the EU, EEA and Switzerland are persons having the right to free movement and residence in Hungary and, pursuant to the government decree on the application of the transitional rules relating to the free movement of labour to these citizens, they may work in Hungary without a work permit. We have to note, however, that the decree does not apply to employment under assignment, transfer and employee leasing.

However, the obligation of registration remains in place in respect of the citizens of the above countries also and the group of persons to be registered is even extended as the employer is obliged to register with the employment centre competent based on the place of employment the employment of each person having the right to free movement and residence also.

The start of employment shall be registered on the first day of employment at the latest while the termination of employment shall be registered on the day following termination. No specific form is prescribed for registration purposes. Registrations may therefore be submitted in any form but they must always include at least the following data:

  • number of employees,
  • nationality of the employees,
  • form of the work relationship,
  • indication of relative status in the case of relatives and
  • indication of whether the work relationship was established or terminated.

The employment centre certifies fulfilment of the registration obligation and also keeps a record of the registered data. Although registration and the certification of the fulfilment of the registration obligation do not qualify as conditions for starting employment, a failure to meet this obligation may be sanctioned with a penalty of HUF 5 to 500 thousand.

Hungarian employment of third country nationals not having the right to free movement and residence

Citizens not having the right to free movement and residence, i.e. citizens not coming from the European Economic Area and Switzerland qualify as third country nationals and, by the main rule, they may only work in Hungary based on a permit.

The employer shall file the work permit requests with the employment centre competent based on the place of employment on the form prescribed in Annex 1 to the decree. The following documents shall be attached to the request:

  • a certificate on the registration of the labour need,
  • an authentic copy of the document certifying the foreigner’s qualification to perform the given activity and its authentic Hungarian translation (if the document was issued in a foreign language),
  • a medical certificate of the foreign citizen’s fitness for work and, if it was issued in a foreign language, an authentic copy of the certificate and its authentic Hungarian translation.

The employment centre issues the work permit if the employer has a valid labour need in relation to the activity to be performed by the third country national. A further condition is that no Hungarian or EEA member state nationals or relatives of Hungarian or EEA member state nationals registered as job-seekers based on the relevant special legal regulation and satisfying the conditions prescribed by law and specified under the conditions of employment in the employer’s labour need were mediated to the employer from the date of submission of the labour need.

For the purposes of the legal regulation, a valid labour need shall be filed by the employer at the time of or before filing the work permit request but not more than sixty days earlier. Labour needs filed more than sixty days earlier but extended not more than sixty days before the submission of the work permit request are acceptable also.

The employment centre decides on the approval of the employment of the employee. A work permit may initially be issued for a maximum period of two years but may be extended.

There are cases in which the employment centre issues a work permit for a third country national without an assessment of the labour market situation, for example, if:

  • the employment falls within the employment quota defined in the relevant international treaty,
  • the work permit is requested for the educational, scientific or artistic employment not exceeding 10 working days of an internationally acknowledged foreigner invited by an institution of higher education, a scientific research institution or an institution of public education,
  • the work permit is requested for the Hungarian employment of a close relative of a staff member of a diplomatic representation or consulate of a foreign state if no reciprocity is in place between the states concerned,
  • the work permit is requested for the spouse who has lived for at least one year in Hungary with of a person acknowledged as a refugee or asylum seeker or a person having immigrant or resident status,
  • and if the employer submits the request for the extension of the work permit at least  fifteen days before the expiry of the work permit at the latest.

In our next post we will summarize the tax rules pertaining to the Hungarian wages of foreigners employed in Hungary.

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