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Labour due diligence – Why is it important?

In this information leaflet we present the inherent opportunities offered by our labour due diligence service, which allows you to identify and minimize labour law and payroll deficiencies before tax authority or labour audits.

Do you have any question?
Don't hesitate to contact us!

Edina Pentz

Head of Payroll Services


Why do we offer labour due diligence?

The purpose of a labour due diligence is to conduct a comprehensive review of the given company from a labour law perspective in order to identify before an authority audit any non-compliances relating to the inappropriate application of labour law regulations and to allow our clients to correct these errors and potential deficiencies thereby preparing efficiently for a labour authority audit.

Our experience shows that in order for a potential tax audit or labour audit to be closed successfully from the perspective of the employer, without any or with as few as possible audit findings, a team of experts supporting the employer is necessary, which

  • has comprehensive and practical experience in both labour law and payroll;
  • can assess the needs and preferences of the employer specifically;
  • is familiar, from practical experience, with the audit guidelines and the audit process applied by labour inspectors;
  • is able to provide efficient and fast solutions and answers to emerging labour and payroll issues in accordance with the legal environment.

Who is our labour due diligence service for?

We offer our service to all employers and enterprises:

  • for which it is important to apply labour law and tax law regulations properly and who would like to prepare for a potential labour inspection and eliminate any labour and payroll deficiencies before the authority audit.
  • who wish to minimize and avoid labour penalties.

What default penalties may be imposed?

The employer may be sanctioned with a default penalty of up to HUF 500 000 in the case of late fulfilment of its registration obligation.

By the main rule, labour penalties may range from 30 000 to 10 000 000 HUF.


  • If the number of employees of the audited employer does not exceed 20 at the time of commencement of the audit, the amount of the labour penalty shall range from 30 000 to 5 000 000 HUF.
  • If a violation concerning an employee employed by a natural person employer (not as a private entrepreneur) is established, the amount of the labour penalty shall range from 30 000 to 1 000 000 HUF.
  • The amount of the penalty may be increased to up to twice the above mentioned limits if at least one violation identical with a previous violation is established within 3 years of the effective date of the resolution imposing a penalty as a result of a previous labour audit.

During the payroll and labour due diligence performed by our company we examine and review the following areas (with regard to the special needs of our clients):

  • labour law regulations and agreements;
  • employment contracts, amendments to employment contracts;
  • information, job descriptions;
  • legal declarations/agreements regarding termination of employment;
  • fulfilment of the obligation of reporting to the tax authority;
  • compliance with labour law regulations concerning work and rest time;
  • work time schedule and work time registration;
  • compliance with regulations concerning the granting of holidays;
  • settlement of salaries, absence fees, wage supplements and other benefits;
  • settlements relating to extraordinary work;
  • compliance with tax and contribution rules;
  • review of labour administration and basic payroll documents;
  • payroll;
  • proper operation of the system of fringe benefits and content of the relating regulations;
  • settlement of deductions from salary;
  • inspection of employment of special employees from a labour law and tax law perspective (simplified employment, employment by multiple employers, distance working, staff leasing).

If requested, we review certain partial areas separately, adjusted to the special needs of our clients.

Why should you turn to us?

Due to the diversity and constant changing of labour law regulations, the due diligence should be performed by an expert not only having comprehensive knowledge of the legal background of labour law but also years of experience in their day-to-day application in practice. The payroll division of our company has a large number of clients including small, medium-sized and large companies from various industries as well as multinational companies.

Thanks to the wide range of our client relationships, we can declare that with our labour due diligence we support clients efficiently with our knowledge of labour law background regulations and our experience in their practical application.

Our goal is to make sure that labour law regulations are implemented professionally and in compliance with the relevant laws, offering our clients the best solutions for any issues or deficiencies identified and, at the same time, minimizing the time and energy the company has to spend on these matters. Our many years of experience is the guarantee that our clients receive professional support during our labour due diligence in the identification and management of potential problems with our company also taking an effective role in the solving of these.

    If you have any question, please don't hesitate to contact our experts!

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