Working time allocation
According to Act I of 2012 of the Labour Code ("Labour Code") the working time cycle may be four or six months. However, as of 11 April 2020, the employer may order a maximum 24 month cycle of working time during the state of emergency derogating from the relevant provisions of the Labour Code.
Employers are also entitled to extend the length of the ordered work cycle up to 24 months. The work cycle is one of the methods in which an uneven work schedule may be ordered, accordingly the daily working hours of the employee may be different on each day. If the state of emergency is terminated, it does not have an effect on the allocated work time in a work cycle during the course of the state of emergency. This means that the ordered work cycle will not cease to exist or shall not be terminated at the end of the state of emergency. Collective bargaining agreements may not diverge from the abovementioned provisions.
As of 25 April 2020 neither the parties nor collective bargaining agreements may derogate from – except in some specific sectors set out in Section 135 (4) of the Labour Code – and Section 99 and 104-106 of the Labour Code, which set forth the daily working time, daily and weekly rest periods.
Entitlement to healthcare services
During the state of emergency, the employee – who is on unpaid leave due to the state of emergency - is entitled to healthcare services as of 26 April 2020. In other words, employees on unpaid leave will not lose their right to health care services.
From 1 May 2020, the employer shall establish, pay and declare the healthcare service contribution in respect of the employee concerned. The employer may request a moratorium until the 60th day after the end of the state of emergency.
Reduced working time subsidy
If the employee and employer agree on the employment within reduced working time due to the coronavirus pandemic, they may request a subsidy for the employee for a three month period from the respective government agency. The parties may electronically submit the application during the state of emergency or one month after the end of the state of emergency. The reduced working time – set out by the modification of the employment contract concluded after the announcement of the state of emergency (i.e. 11 March 2020) - means part-time employment which (i) must be at least 25 % of the working time, but (ii) may not exceed 85 % of the working time determined in the employment contract and applied before the modification in a three month average ("original working time").
The basis of the subsidy is the monthly base salary of the employee concerned, on the day of the submission of the application reduced by the amount of the advance of the personal income tax and contributions ("base salary"). The eligible base salary is maximised by law. The eligible maximum amount of the base salary may not exceed double the amount of the national minimum salary less the amount of taxes and levies at the time of the application.
The amount of the subsidy is 70 % of the base salary for the period of the time lost from work (in Hungarian kieső munkaidő) due to the reduced working time. When calculating the base salary maximum the double amount of the base salary may be taken into account, the maximum amount of the subsidy is therefore approx HUF 112,000 per employee. The subsidy is free from taxes and social security contributions. The subsidy may not be paid for a period of an unpaid leave.
The conditions of the subsidy are set out in the respective government decree in a detailed manner. Hereinafter we outline some of the main conditions of the subsidy.
As stated above, the employer and the employee must conclude an agreement on the subject of the employment within reduced working time. Furthermore, if the reduced working time exceeds half of the original working time the parties must also agree on a so-called individual development timeframe (in Hungarian egyéni fejlesztési idő) at least for the period of the duration of the subsidy. This timeframe covers 30% of the work time reduction (in Hungarian kieső munkaidő), and during its term, the employee must be available for the employer for development purposes in connection with the job or the employer's activity during the subsidy or within 2 years thereafter. For the period of the individual development timeframe, the employer must pay the base salary to the employee. If the amount of the work time reduction exceeds 50 %, the agreement on an individual development timeframe is optional.
Further conditions in respect of the employee are that the employee:
- may not be entitled to any other subsidy in connection with the part-time employment in relation to the same employment relationship;
- has been employed by the employer at least since the day of the announcement of the state of emergency (i.e. 11 March 2020); and
- does not use his/her total notice period.
The employer concerned must have been in operation for at least six months and may not receive any job creation or job retention wage subsidy (in Hungarian bérjellegű támogatás) which are financed from EU resources or D&R research based on Government Decree 103/2020 (IV.10.) in respect of the employee. The employer must meet many other criteria, of which we highlight a few.
Accordingly, the employer must:
- maintain the employment of the employee concerned during the term of the subsidy and one month thereafter;
- set out in their application for subsidy the economic circumstances – connected closely and directly to the state of emergency – which prove the necessity of the employment of the employee with reduced working hours and prove that the employee retention is connected to the continuous economic activity of the employer which is in the interest of the national economy; and
- ensure that the employee's base salary together with the subsidy reaches the employee's earlier base salary in the course of the subsidy provided that the parties are obliged to agree on individual development timeframe.
Research and Development Subsidy
The Hungarian State provides a subsidy for a maximum three month period to those employers employing researchers and developers based on Section 3 (15) of the Act 2014 of LXXVI. The application requirements of the subsidy are set out in the respective government decree.
The amount of the research & development subsidy may not exceed HUF 318,920 (approx. EUR 1,000) on a monthly basis per employee.
The above summary is provided for general information purposes and is not to be construed as a substitute for legal advice in individual cases.