Employment, labour law

CLVPartners has been recognized again in Chambers Europe Legal Guide 2024

We proudly and gladly announce that CLVPartners Law Firm has been recognized again by Chambers  and Partners in their 2024 rankings! This is a prestigious recognition of our team’s hard work, dedication, and expertise. Being ranked by Chambers and Partners is a true honor, and we are grateful for our clients’ trust and support, which motivates us to continue delivering our services with the highest standards of professionalism.

We are also delighted to share the assessment of CLVPartner’s legal service and the feedback of our valued clients what they told to Chambers and Partners for ranking purposes:

CLV is excellent at handling complex and sophisticated cases, providing us with comprehensive advice covering all aspects that are relevant to us.”

 “The firm was prepared with knowledge, giving practical solutions on legal questions and unclear situations.”

 “CLV’s strongest trait is that they understand and assess cases from a practical perspective.”

 Marianna Csabai, our Senior Partner is also ranked as notable practitioner.

Government Decree 462/2023 (X. 5.) on emergency measures for the protection of the labour market and the population of Hungary was published

The Decree which was published on 5 October envisages a comprehensive re-regulation of the residence and employment conditions of third-country nationals in Hungary. 

The Government Decree prohibits the application of Act L of 2023 on guest workers during the period of the state of emergency. The Act otherwise lays down the conditions of residence and work of guest workers, i.e. third-country nationals from non-neighbouring countries, who come to Hungary for work purposes, as well as the rules for a single residence permit, which enters into force on 1 November 2023, but cannot be taken into account for the time being. 

At the same time, the Government has also decided to propose new legislation on immigration and employment, which is expected to fundamentally change the rules applicable for third country national in the future. 

If there is any progress in this area, we will of course inform you immediately. 

Satellite workplace and employees

The term ‘satellite workplace’ or ‘satellite employee’ is becoming increasingly common. In this article, we present these concepts from a labour law perspective.

What is a satellite office and who is a satellite employee?

A satellite workplace is when an employer employs employees living in a geographical location other than the registered seat of the employer in a way that these employees work partly from home and partly from offices run by the employer in a location separate from its main seat, such as rented premises, co-offices, branch offices, in short satellite workplaces. Employees employed in such arrangements are called satellite employees, who, although they belong to the organisational unit of the employer’s headquarters in terms of the employer’s organisational structure, may be physically present in another organisational unit of the employer during the course of their work.

What benefits can we expect?

There are many advantages to running a satellite workplace. For example, when recruiting new employees, the distance between the employee’s home and the employer’s seat may not be a primary consideration.  The model can be used to provide a wider range of employment opportunities for candidates living in locations other than the employer’s headquarter. This allows a larger pool of employees to be selected for the most suitable position, which is a competitive advantage, especially in jobs which are difficult to fulfil.

The employment structure avoids the negative effects of teleworking, such as professional isolation and blurring of the boundaries between work and private life.

Satellite working can also be a solution in temporary situations, when a company wants to expand into a new market or location, or when a project requires certain colleagues to work temporarily in a place differing from the company’s main address.

The perception of satellite employees from a labour law perspective

From a labour law point of view, satellite employees are teleworkers, given that they work at a location separate from the employer’s seat. Teleworking takes place irrespective of whether they work in an office run by the company or provided otherwise.

Under Hungarian law, the teleworking agreement must be included in the employment contract. The employment protection requirements vary depending on whether the work related to a particular job is performed with or without the use of a computing device.

Opportunities for implementation

There are several opportunities for creating satellite workplaces. The company can provide working conditions in its own or in a longer-term leased office space for exclusive use or it can arrange office services with community office providers. The number of satellite employees, the amount of costs that can be absorbed and the planned duration of the whole structure may be factors in choosing the most advantageous option.

Cross-border satellite work

The satellite work model can be envisaged not only within a country but also across borders. There are no barriers to cross-border employment, but there are a number of considerations to be taken into account, including:

  • employment protection rules,
  • tax considerations (tasks involved in setting up an establishment),
  • rate of pay, currency of payment,
  • comparison of costs and savings to be made,
  • equal treatment,
  • business confidentiality and data management, data security requirements.

In summary

Working in a location other than the employer’s seat can address a number of challenges that are increasingly important today, such as the need for companies to choose colleagues from a larger labour market. However, to avoid potential tax and labour law risks and unnecessary costs, it is essential that entities take their decisions with all aspects of satellite employment in mind and carefully consider them.

Information on the changes to the Labour Code in 2023

Dear Clients,

On 21 December 2022, Act LXXIV of 2022 amending certain employment-related laws was published, which includes, among other things, the amendment of Act I of 2012 on the Hungarian Labour Code (“Labour Code“) effective as of 1 January 2023.

The comprehensive revision is mainly due to the correct transposition of two EU directives, but a number of other provisions changes as well. Among the large number of changes, we briefly highlight the most important new rules.

1.              Changes to employment documentation

1.1.         Changes to the mandatory content of employment contracts

The following will no longer be a mandatory element of the employment contract:

  •        place of work,
  •        starting date of employment, and
  •        duration of employment.

Unless otherwise provided, these are governed by the Labour Code, but if the parties wish to derogate from the main rule of law, they may do so by agreement.

According to the law,

  •        the working time starts on the day following the execution of the employment contract,
  •        the working time is indefinite,
  •        the place of work is the usual place of work for the position.

Another new novelty is that, as a main rule, wages shall be paid by bank transfer, and parties can only derogate from this main rule by mutual agreement.

In the case of fixed-term employment, if the duration is maximum 12 months, the probationary period shall be pro-rated, and after termination, no probationary period may be imposed for a second employment in the same or similar position. Employers should therefore review the standard contracts they use to ensure that they contain the right content for the future.

1.2.       The employer’s notification obligation

The notification obligation of the employer has been tightened: instead of the current 15-day deadline, the employer shall provide the necessary information in writing within 7 days from the starting date of the employment relationship, and in case of change, on the date of change.

In addition, employers will in future be obliged to provide information on their training policy and the name of the authority to which they pay employment-related taxes, currently the Hungarian Tax Authority.

1.3.       Notification before secondments abroad

The legislation states that for secondments of more than 15 days, employees shall be informed of the rules and conditions governing the remuneration applicable in the place of work, the reimbursement of travel, subsistence and accommodation expenses, and the availability of the unified national website (i.e. the OMMF) containing relevant information on the rights and obligations of the employer providing cross-border services and the employees posted.

1.4.       Certificates and declarations relating to new types of leave, exemptions

The amendment to the Labour Code contains a number of new rules regarding vacation, exemptions from work, prohibitions on dismissal, information requirements – as a result of which employers will need to assess the documentation to support entitlements – including parental leave, paternity leave, the duration of care for a relative, and the background documentation for termination without notice.

2.      Exemption from availability and work – extension of cases

The Labour Code already contains a list of cases in which the employee is exempted from his/her obligation to be available and work.

According to the amendment workers are exempted from these obligations if they are caring for a relative who needs care for serious health reasons or personal care for a person living in the same household as the worker, but for a maximum of 5 days. During the period of care, the employee is not entitled to give notice.

3.            Options for parents

3.1.       Paternity leave and parental leave

The amount of leave for fathers will be increased from next year, to a unified 10 working days. Fathers whose children are born or adopted between 2 August and 31 December 2022 will also be entitled to the amended paternity leave until the end of February 2023. For the first 5 working days of paternity leave absence fee, while the for the second 5 working days 40% of the same absence fee shall be paid .

Parental leave has been introduced, which by its very name is granted to both parents. It is granted for 44 working days up to the age of 3 of the child, provided that the employee has been employed for at least one year by the employer. The rules for taking parental leave are the same as those for paternity leave, except that it may be taken up until 30 June 2023. For the period of the parental leave 10% of the absence allowance shall be paid for the whole period.

Both leaves are granted at the employee’s request and the requested date may be postponed by the employer in exceptional cases. However, if it the leave not been granted by the date of termination, there is no cash payment, but the employee may roll over its entitlement.

It is also a common rule that during the period of leave under these entitlements, the employer shall not terminate the employment by dismissal.

3.2.      Possibility of amending employment contracts for parents with children

In addition to the current entitlement, a significant benefit is that an employee can apply until its child reaches 8 years for

  •        change of workplace,
  •        change to working hours,
  •        teleworking, or
  •        part-time employment.

The request shall be made in writing by the employee, stating the reasons, and the employer shall give written reasons for refusing the request within 15 days. The refusal of a request may be challenged in court, but the possibility of an extra-judicial hearing of these proceedings has been removed, so in practice it does not provide a real solution. However, employers are encouraged to keep transparent and accurate records of their labour needs in order to avoid disputes.

4.           Disputes

4.1.       Abuse of rights

The rules on employment law claims based on abuse of rights are amended. The new legislation sets out how the burden of proof is shared between the parties.

The burden is on the claimant (the employee) to prove the facts, circumstances and prejudice on which the claim is based, while the burden is on the decision maker (the employer) to prove that there is no causal link among the above. The significance of the change is that if the employee’s claim of abuse of rights is acknowledged by the court, the employee is entitled to request the restoration of his employment relationship by the court.

4.2.      Reasoning obligation

In exceptional cases, the employer is not obliged to give reasons for termination (e.g. in the case of termination during the probationary period). However, under the new rules, the employer is still obliged to give reasons, if the employee believes that the termination is due to one of the following reasons and requests the reasons for termination. The alleged reasons can be:

  •        working time allowance for care,
  •        paternity leave,
  •        parental leave,
  •        taking unpaid leave to care for a child, or
  •        the submission of applications under the previous point.

In the case of an employee’s request, the employer has 15 days to justify the termination. In practice, this means that the employer shall always be prepared to justify the reason for termination.

The above changes will typically come into force on 1 January 2023, applicable also to already existing employment relationships – although the legislator leaves a certain implementation period for businesses.

If you have any questions about the above, please contact us. Of course, we will also provide you with details of any further changes in the context of a personalised, partner-specific information session.


dr. Papp Anna Katalin

dr. Csabai Marianna


Motivation of white-collar workers

In the first part of our series of articles, we looked at the motivational options available to companies for their physical employees (blue-collar workers). For intellectual employees (white-collar workers), the same options as described above can be applied, but companies may also be interested in other reward possibilities.

It has always been a challenge for employers to retain the talented (executive) management of the company and encourage them for better performance and thus improve the company’s profitability. At the same time, the motivation system works well only, if the business leaders also consider these colleagues as an asset of the company and are willing to “give a slice of their cake”. This is because these executives contribute greatly to the corporation’s success.

“He/she doesn’t look at the firm as his own.” “I paid him/her a high salary for years, yet he/she left us and went to the competition.” We have come across countless times such and similar statements as a consultant. But why would an owner, an entrepreneur expect, whether with an international background or leading a family business, the managers to give their hearts and souls for the company and put their personal life and leisure back, when they do not benefit proportionately from the company’s success? Of course, mapping out the real proprietorship challenge is not a purely legal task. Nonetheless, there are several corporate, commercial, and employment law agreements to motivate management. Not only the owners, but also people who develop the organization by being responsible for HR, coaching, as well as the company’s tax or finance managers should be aware of those solutions.

The following few examples make the benefit system transparent, thus being predictable and strengthening the employer brand, increasing loyalty within the business and encouraging higher performance of key personnel.

Shareholdership – with limitations

Whether a legal person operates in the form of a limited liability (Kft.) or as a private company limited by shares (Zrt.), it has the option to grant shareholdersip with different legal rights with the purpose of recognizing colleagues who play a key role in the profitability. Such solutions do not need to provide equal or proportionate rights (for example, in terms of voting rights or dividend entitlements) and may be for a definite period (i.e. duration of legal relationship with the entity).

Other favorable options

Whether in an employment or contractual relationship, the owner of a company always can formulate favorable rules in relation to employment, and thus, among others, implement tax-efficient performance incentives at the company such the following ones:

  • increased or reduced notice period in proportion to seniority;
  • insurance, health insurance, private health care packages
  • a higher amount of severance payment, based on the number of years spent at the company;
  • “alumni” benefits (either directly or through a fund, insurance company) available after the termination of the employment relationship with the company;
  • benefits provided to the employee’s family,
  • providing longer unpaid leave (sabbatical leave).

The planning and systematization of the above-detailed benefits may have an impact on tax administration, and thus, on the total cost of the benefits. It is therefore worth structuring the benefit plan carefully from a tax perspective, considering the given circumstances.

The loss and replacement of a middle or senior manager imposes a significant financial burden on businesses. That is because not only the time and cost of recruiting the right person should be considered, but also the alternative costs of handing over processes, integrating a new colleague, rebuilding the entity’s reputation, the loss of the company’s know-how, customer base and building long-term loyalty. It is therefore in the fundamental interest of firms to rethink how they can reward the work of their valuable co-workers and support their loyalty through transparent and predictable remuneration systems.

Possibilities to support the employee’s studies

It is often that workers educate themselves alongside their employment, whether or not related to their job. Employers tend to support employees in continuing their education, as a broader-minded workforce is also more valuable to them. The question often arises as to how and in what ways employers can support employees to continue their studies. Below we present practical solutions to this issue.

Study contract

The most common is that, under a study contract, the employer provides certain support for the training, while the employee undertakes to continue his studies and obtain a qualification and not to terminate his employment by notice for a certain period of time afterwards.

Subject of the study contract

A study contract may not be concluded for training if the employer ordered the employee to compete it. Except this case, however, it may cover any in-school or non-school training or education. The parties may also conclude an agreement on the acquisition of qualification or the achievement of a specific academic result or average.

Duration of the agreement

According to the legislation, the worker may not terminate his employment contract by giving notice within a period proportional to the amount of the support, but not exceeding five years after the end of the studies. The duration must be proportional not to the length of the training but to the amount of the employer’s support. In other words, the purpose of the employee’s “restriction” is to recoup the employer’s support through the employee’s employment for a specified period. A disproportionately long restriction may result invalidity of the contract.

The form of the support

The form of support provided by the employer in respect of the studies is typically the payment of all or part of the training fees. In addition, or in parallel, support may of course include the purchase of study materials, the payment of travel/accommodation costs, or the employer may ensure the attendance of the employee at training and exams, which typically take place during or affecting working hours. Indeed, support may be provided if the employer grants extra day(s) off for the preparation time necessary for the exams.

Exemption from contractual obligations

It is important to emphasize that the obligation arising from the study contract only applies to the normal termination of the employee, so if the conditions are met, the employee can terminate his employment with immediate effect. In addition, the law also states that the employee is exempted from his obligations if the employer commits a serious breach of contract (e.g.: fails to provide the study support he has undertaken to provide).

The employer also has the right of withdrawal and reclaim if the employee breaches the provisions applicable to him or if the employer terminates the employment relationship on the basis of the employee’s behaviour.

Another important point to note is that if there is a material change in the circumstances of the parties which would make performance impossible or result in unreasonable hardship, the party concerned has the right to terminate the contract with immediate effect.

Other agreements

In reality, the parties may not always wish to enter into a study contract with each other, and there may even be situations where it is not practical or reasonable.

An example is when the employer does not provide financial support but only allows the employee to attend classes or to take a few extra days off. In such a case, the employee’s restriction would only be enforceable for a period equivalent to the leave, in view of the requirement of proportionality, which is hardly realistic. In such cases, it is suggested that the parties consider other arrangements. As to the previous example, an alternative solution could be for the parties to agree on (unpaid) leave for the days of the exams or to (mutually) extend the notice period for a fixed period.

Incentive schemes for blue-collar workers



The increased demand for labour, the emigration of skilled manual workers – either to a company in a neighbouring city or across the border – places a significant burden on companies’ HR colleagues. There is a recurring need to develop appropriate incentive schemes that increase the appreciation of high performing colleagues and help retain employees.

According to our experience, a compensation system will only be viable, if it is based on well estimated employee needs and a comprehensive knowledge of the options available under labour law. In this article, we would like to draw attention to solutions that go beyond the (also significant) remuneration policy.

Wages and Compensation

 The most trivial correlation is that if an employee earns more, he/she is more likely to stay with the company. In our experience, a proper salary model is undoubtedly an important tool, but not the only one, as employees already take into account other incentives in addition to their wages, which are effective if the conditions are tailored to the employer and the job and diversified according to e.g. presence, performance, quality. The social needs of employees (e.g., tax-free allowances, holiday allowances, etc.) are increasingly important. Employers must be very precise and accurate in defining compensation to avoid labour law and tax risks, for example the classification of compensation as wage, which can lead to serious tax payments and penalties later.


 It is important that the employees understand the benefit and that compensation was objective. If, for example, an allowance is based on the company’s results, it must be comprehensible to all employees concerned without the need to read the company accounts. A transparent system leads to greater employee loyalty and increases trust in the employer.

Transparency is often used as a synonym of objectivity at companies, even though the two terms do not have the same meaning. Objective and subjective benefits differ as in the latter case the employer has at least some discretion over the actual payments. However, it is important for both systems to be drafted in a clear and comprehensive way – in our view, this is in the interest of both parties. An example is the combination of group and individual bonuses in the case of a manufacturing company. A dual bonus system ensures that employees not focus only on their own performance, but also on the performance of the team as a whole – that results in making them better off financially, but also in achieving other HR policy objectives (cohesion, team spirit, loyalty).


A principle that makes a reward system successful and is closely linked to transparency is predictability. For blue-collar workers, it is of major importance that their livelihood is secure not only immediately, but also in the distant future. It is therefore worthwhile to set short- and medium-term goals in a structured way.


Entities very often ignore the importance of communication. Whether we are talking about verbal feedback or incentive schemes, positive feedback is much more effective than punitive – disincentive – regulation. In case of physical workers, it is equally important that the company’s core values are expressed to them properly (also in the daily cooperation), and that they can expect the same from the coworkers. It is pointless to proclaim that an employer protects personal rights if it monitors premises illegally. However, it is also important to be aware of the legal aspects of the timing and content of communications, as in many cases these qualify as binding commitments to the employer for the future.

Opportunity for promotion

Ambitious and talented employees should be constantly monitored and provided with the opportunity for development, promotion or training. That will help to retain the most loyal people in the long term. For employers, however, it is of paramount importance to include appropriate labour law guarantees in the agreement with such employees.

As a conclusion, Hungarian labour law provides a very wide range of incentives for blue-collar workers, which not only provide additional benefits for employees, but can also guarantee companies the retention of a secure workforce. However, knowledge and understanding of the basic challenges and the most optimal labour law and tax aspects of possible HR solutions are essential for successful implementation.

Should you have any questions regarding the above, feel free to contact us.

CLVPartners contact us

SZÉP Card Rules Changed from the 1st of January

As of the 1st of January 2022, the maximum amount of the support that can be granted as fringe benefits for certain sub-accounts of the SZÉP card is HUF 450,000 per person per year and the maximum amounts that can be granted per sub-account are as follows:

As of the 1st of January 2022, the maximum amount of the support that can be granted as fringe benefits for certain sub-accounts of the SZÉP card is HUF 450,000 per person per year and the maximum amounts that can be granted per sub-account are as follows:

  • for the accommodation sub-account, the maximum amount that can be used for accommodation services according to the respective government decree is HUF 225,000 per year,
  • for the catering sub-account, up to HUF 150,000 per year for catering services in hot food catering establishments (including workplace catering) according to the respective government decree,
  • the leisure sub-account may be used for leisure, recreation and health care as defined by the relevant government decree, up to HUF 75,000 per year.

The interchange between the different sub-accounts of the SZÉP card has been extended until the 31st of December 2022, so that services can be paid for from any sub-accounts.

The amounts available on the sub-accounts can also be used for food purchases (except alcohol and tobacco products) between 1st of February 2022 and 31st of May 2022.

That part of the total amount transferred to the sub-accounts that does not exceed the annual recreational allowance is considered as a fringe benefit, which is HUF 450,000 for all employers (the maximum was temporarily HUF 800,000 per person in the second half of 2021, which was reduced to HUF 450,000 as of 1 January 2022). The excess benefit over this amount is taxable as a specific benefit not considered as a fringe benefit.
The employer must pay 15 % personal income tax and 13 % social contribution tax on the amount of the fringe benefit (the social contribution tax reduction applies from 1 January 2022). (In the second half of 2021 there was a temporary social contribution tax exemption for SZÉP cards. This social contribution tax exemption ceased as of 1 January 2022.)

In summary, the tax base for the payer of the SZÉP-card benefits is the following:

  • the total amount of the income in the case of fringe benefits,
  • In the case of certain defined benefits other than fringe benefits, 1.18 times the income as defined above (excess part).
  • Thus, up to HUF 450,000, the total tax burden on the payer/disburser entity is 28% of the benefit.
  • For SZÉP card benefits above HUF 450,000, the tax burden on the payer/disburser entity is 33.04% falling on the amount exceeding HUF 450,000.

Should you have any questions regarding the above, feel free to contact us.

 CLVPartners news


Changes In The White Card Rules From 2022

As of 1 January 2022, certain provisions of Act II of 2007 on the Entry and Residence of Third-Country Nationals (hereinafter: “Act.”) were amended. The amendment introduced a new type of permit allowing third-country digital nomads to reside in Hungary. The new permit is the so-called White Card.

What is the White Card and what does it authorize to?

The White Card is a special residence permit that allows third-country digital nomads to stay in Hungary for 1 year (which can be extended with an additional year).

In this respect, a digital nomad is a person who has an employment relationship in or profit from a third country, but actually performs his/her work or business management tasks from Hungary using advanced digital technology.

It is important to note, however, that only those who meet all the conditions are entitled for the White Card. For example, a person who work for an employer in Hungary, is not able to apply.

Related rules

In view of the international nature of the White Card, specific labour, social security and tax issues will inevitably arise, but these can only be clarified precisely on a case-by-case basis.

The White Card, unlike other residence permits, does not provide any entitlement for the holder’s family members.

As of 1 January 2022, third-country digital nomads will be able to reside in Hungary with a White Card for 1 year (optionally extended by 1 year). If you have any questions in connection with its conditions, application procedure, or the related labour, social security and tax rules, please do not hesitate to contact us.


Should you have any questions regarding the above, feel free to contact us.

 CLVPartners news


The Final Teleworking Rules – Home Office

We are pleased to inform you that on 17 December 2021 the new regulations were adopted regarding the teleworking – home office – labour law and the related occupational safety and health and tax rules.

The good news is that the final regulation repeated without any change the rules was introduced on 3 July 2021 in the Decree No. 487/2020 of 11 November 2020 (“Summer Rules”). At that time, it was uncertain if the Summer Rules would survive the end of the state of emergency.
Just remind you, the Summer Decree extended the definition of teleworking to the employees who work from their home in 2/3rd or more of their annual working hours and perform their works via IT system.

In addition, the employers might apply different occupational safety and health rules regarding such remote workers, as the employer was obliged to inform the employee about the safety requirements, and the employees were liable for selecting a working pace that is compliant with the requirements disclosed by the employer.
The employers may provide their employees with tax-free allowances for teleworking up to 10% of the monthly minimum wage.

The new rules incorporate all the transitional provisions of the Summer Rules on teleworking into the relevant Acts concerned Act I of 2012 on the Labour Code, Act XCIII of 1993 on Labour Protection, Act CXVII of 1995 on Personal Income Tax), and become part of the legal system and will remain with us in the long term.

The new legislation is particularly important as it mitigates the uncertainty whether the employment contracts already amended and made compliant with the Summer Decree should be amended again once the state of emergency situation has ceased to exist and another rules would be introduced.

The good news for those who have already implemented the teleworking Summer Rules and amended the employment contract accordingly, there is nothing to be done neither now nor when the new regulations enter into force.

For those who have not yet taken advantage of the possibility offered by the Summer Rules, we recommend using the time for implementing the rules until the new statutory rules enters into force the at the end of the emergency, which is unknown future date.

Should you have any questions regarding the above, feel free to contact us.

 CLVPartners news