In Hungary, the Government has introduced multiple measures – besides the ongoing curfew restrictions – aimed at helping companies navigate through these hard times.
General employment law related measures
- The employer has more flexibility in modifying the work schedule even after it has been communicated to the employees;
- The employer can unilaterally order the employee to work from home;
- The maximum length of the working time frame has been extended to 24 months for all employers, which allows the employer to schedule less (or no) work for the employees during the state of emergency, and more work than usual during the remainder of the working time frame. Although this means that the employer must pay the whole base salaries of the employees even during the times when the employees work less, it also means that the employer will not have to pay overtime wages for the remainder of the working time frame; and
- The employer may carry out reasonable and necessary measures in order to safeguard the health of employees.
Even if collective bargaining agreements regulated the above issues differently, such collective bargaining agreement provisions shall not be applied during the term of the government regulation.
In addition to the above, during the term of the government regulation employers and employees can agree to deviate from the rules of the Labour Code in a separate agreement.
Short-time work (Kurzarbeit) subsidy
- The wage subsidy is to be provided by the state for the employee upon a joint request made by the employer and the employee;
- The subsidy is payable for a duration of three months;
- The rate of the subsidy is 70% of the wage for periods of absence proportionate to the lost working time. The working time may be reduced by at least 15% and 75% at the most. This means that when the employee only works 4 hours instead of the original 8 hours, 70% of his wages applicable to the lost 4 hours will be paid by the state. However, the wage to be considered is maximized at double the minimum wage in effect at the time of the application (i.e. the maximum amount of the subsidy that a worker could receive is around EUR 320 per month in case of the decrease of the working time by 75%); and
- If the working time is reduced by less than 50%, the employer is also required to allocate 30% of the lost working time to the ‘personal development’ of the employee, during which period the employer is required to pay the basic salary of the employee.
During the subsidized period and for another month, the employer must maintain the employment relationship of the subsidized employee. When this obligation is not met, the subsidy must be repaid.
Research and Development (R+D) subsidy
- Employers can receive government support after researcher-developers (engineers, researchers, IT specialists) for a maximum of 3 months.
- The support covers all non-state-budgetary employers where research and development is carried out.
- The employee must qualify as a researcher-developer as per Act LXXVI. of 2014 on Innovation: a natural person who is engaged in the creation or development of new knowledge, intellectual property, a product, service, procedure, method or system, or who is engaged in the management of the implementation of projects aimed at those things.
- The support is for a period of three months and its amount may not exceed approx. EUR 900 per month per person. Below a certain amount of gross salary, the support decreases proportionally. The amount is paid to the employer, who must guarantee – in return for the aid – that the subsidised employee will remain employed for at least 3 additional months on a salary not lower than that which they received on the day the emergency situation was declared (March 11, 2020).
According to the general rules, if the employer is not able to give the employee work due to the epidemic, the so-called “Downtime” rules come into force. During downtime, the employee is entitled to a basic salary, and downtime counts as work done.
If, however, the employer is unable to give work to the employee for some “unavoidable external reason”, the employer does not have to pay wages. The law does not specify what is meant by an “unavoidable external reason,” and in the current coronavirus situation, it is still questionable what constitutes such a cause. In our view, the coronavirus situation alone does not create an unavoidable external cause, but the consequences of the certain government measures, on the other hand, can in certain circumstances fall into the category of unavoidable external cause.