Nestled amidst Ukraine, Romania, Serbia, Slovakia, Austria, Croatia, and Slovenia, Hungary emerges as a modern nation characterized by a unique urban landscape. Notably, Hungary stands apart from the proliferation of skyscrapers, a distinction attributed to a specific architectural regulation. This regulation enforces a height constraint of 96 meters on buildings within the country, resulting in the absence of towering structures. Noteworthy exceptions to this constraint are the Hungarian Parliament building and St. Stephen’s Basilica, which both attain the prescribed 96-meter height. The 96-meter limitation primarily pertains to non-industrial structures, as constructions intended for industrial utility may exceed this stipulated parameter.
According to the Labor Code of Hungary, if the parties to an employment contract do not define the term of the employment relationship, or they define it as “indefinite,” the contract is concluded for an indefinite duration. These employment term possibilities are available for Hungarian and foreign (EU/Non-EU) nationals. The contract can be terminated by either party by giving notice. Employers must give reasons for termination, while employees are not obliged to justify the termination of their employment for an indefinite period. They can terminate the contract by giving notice.
The Labor Code of Hungary states that employment contracts must be in writing. Failure to record in writing can be invoked by the employee only within 30 days of taking up employment. In the contract, the parties must agree on the employee's basic salary and position, duration of work, working hours, and probationary period. Employers are obliged to inform their employees in writing within 15 days from the date of commencement of the employment relationship regarding working time, wages, benefits, payroll frequency, job functions, notice period, leave, overtime, etc.
Employment contracts can contain non-compete clauses in writing, through which employers require employees to agree not to start a competing business, not to begin working for a competitor during the course of their employment, or for a certain period after the termination of the employee-employer relationship. Such agreements must be made in writing and are valid for a maximum of 2 years. For the duration of the agreement, the compensation cannot be less than one-third of the basic salary for the same period.
Per the Labor Code, temporary employment refers to temporary agency work, which describes a situation where a temporary work agency hires an employee out to a user enterprise for remunerated temporary work, and there is an employment relationship between the worker and the temporary work agency. The employer’s rights are exercised jointly by the temporary work agency and by the user enterprise.
The employment contract must state that it is being entered into for the purpose of borrowing labor, clearly specifying the nature of the work and the basic wage.
The duration of an assignment cannot exceed 5 years, including any period of extended assignment and reassignment within 6 months from the time of termination of the previous employment, irrespective of whether the assignment was made by the same or by a different temporary work agency. The user enterprise must inform the local works council every 6 months regarding the number of temporary agency workers employed (as well as of employment conditions) and their vacant positions.
Employers can hire seasonal agricultural or tourism workers and casual employees using a simplified employment contract. These employees can be employed for only 120 days in a calendar year and are entitled only to 85% of the statutory minimum wage (or 87% of the guaranteed minimum wage when it applies). Employers are limited in the number of casual workers they can employ and must pay a tax for each day the employee is on their payroll.
Per the Labor Code of Hungary, the parties of an employment contract can agree to a probationary period of up to 3 months from the employment relationship's commencement date. If a shorter probationary period has been stipulated, the parties can extend it once, as long as it does not exceed 3 months. If the employment contract falls under a collective agreement, the probationary period can last up to 6 months.
During the probationary period, either party can exercise the right of termination without notice without reason.
In Hungary, the daily working time in full-time jobs is 8 hours, but based on an agreement between the parties, it may be increased to a maximum of 12 hours for employees working in standby jobs, or who are relatives of the employer or the owner.
An employee's scheduled daily working time may not be under four hours, except for part-time work, and may not exceed 12 hours (24 hours in the case of standby jobs). The weekly working time may not exceed 48 hours (72 hours in the case of standby jobs).
In the case of remote work, the contracting parties must expressly agree on remote working in their employment contracts. Remote employees work no more than one-third of the total working days in a year in their employers' premises. Employers exercise their control right remotely by using a computer technology device. Employers must provide remote employees with all the information they provide to other employees.
In Hungary, employees are entitled to paid annual leave based on the time spent at work, comprising vested vacation time and extra vacation time. The amount of vested vacation time is 20 working days. Extra vacation time amount depends on employees' age and the number of children.
Seven working days of the vested vacation time in a given year must be allocated in up to two parts, for the time requested by the employee (except the first 3 months of the employment relationship). Leave shall be granted in such a way that an employee is released from their obligation to work and be available at least 14 consecutive days per calendar year. Employees must notify their employers about their intention to take annual leave at least 15 days in advance.
Leave can be granted by the employer until March 31 of the year following the year when it was due if the employment began on or after October 1.
In Hungary, employees are entitled to 15 working days of sick leave per calendar year for the duration of time during which the employee is incapacitated from working. Leave due to pregnancy complications and work-related accidents is separate and not included in the sick leave day bank. The employer pays the sick leave benefit for the first 15 working days (60% or 50% of the average daily earnings, taking into account the maximum amount of sick pay per day). Employees must be registered with social insurance to be eligible for this benefit. If an employee is sick long-term, social insurance covers benefits after the first 15 days for a maximum of 1 year. The amount of sick pay for a day cannot exceed one-thirtieth of twice the minimum wage; therefore, based on the minimum wage of HUF 322,800 (Hungarian forints) effective from January 1, 2026, the daily amount of sick pay cannot exceed HUF 21,520.00.
In Hungary, mothers are entitled to 24 weeks of maternity leave. Female employees can take 168 calendar days (24 weeks) of paid maternity leave of which maximum 4 weeks can be taken before the child's expected date of birth. The starting date for entitlement to the childcare allowance can be any day in the four weeks preceding the expected date of childbirth, but at the latest on the day of childbirth. The remaining weeks must be used after the birth of the child.
This period also applies to mothers who have custody of a child for adoption. If the child receives treatment in an institute for premature infants, the unused portion of the maternity leave may be used after the child has been released from the institute up to the end of the first year following birth. The duration of maternity leave is recognized as time spent at work for social insurance qualification purposes.
Maternity benefits are paid in the form of infant care allowance for the duration of maternity leave. The benefit is paid at the rate of 100% of the insured's daily average gross earnings (minimum wage is used in the absence of earnings) in the last 180 days before the expected date of childbirth. Employees must have at least 365 days of coverage in the last 2 years to be eligible for this benefit.
The Hungarian Labor Code stipulates that, upon the birth of his child, a father is entitled to 10 days of time off until the end of the fourth month from the date of birth or adoption. This leave can be granted in a maximum of 2 installments. This leave also applies if the child is stillborn or dies.
Employees are also entitled to unpaid leave to care for young children (until the child reaches the age of 3).
In Hungary, employment relationships may be terminated by either employers or employees, and written notice is required. If the parties agree, the employment relationship may not be terminated by notice for a maximum of 1 year from the start of the employment relationship. Employees may terminate an indefinite employment contract at any time without giving grounds for termination. However, for fixed-term employment contracts, grounds must be given, and termination is allowed only for justified reasons. The notice period begins on the day following the date when dismissal is communicated.
The notice period must be at least 30 days, but, in the case of dismissal by the employer, it may increase by up to 60 days, depending on the employee's length of service. In the event of termination of a fixed-term employment relationship by notice, the notice period shall not exceed the expiry of the fixed-term period.
Employees are entitled to severance pay if they have been working for at least three years for the employer, and the employment relationship is terminated by the employer or upon dissolution of the employer without succession.
Severance payment may vary between 1 and 6 months of pay, depending on work seniority. The amount of severance pay increases if the employee is within 5 years of becoming eligible for a pension.
Employees are not entitled to severance pay if:
They are recognized as a pensioner at the time when the notice of dismissal is delivered or when the employer is terminated without succession.
They are dismissed for behavioral reasons or on grounds other than health reasons.
