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The labour law related changes in 2018

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , , , , ,

A summary regarding the labour law related changes in  2018 – mandatory minimum wage, social contribution tax, healthcare contribution, simplified contribution to public revenues, childcare benefits, sick pay, cafeteria rules, statutory retirement age

The labour law related changes in 2018

Government Decree No 430/2016. (XII. 15.) determines the amount of the mandatory minimum wage. The mandatory minimum wage for full-time employees increased with 8% as of 1st January 2018, from 127,500 to gross 138,000 HUF. The guaranteed minimum wage paid to skilled workers rose by 12% in the case of completion of full time working as of 1st January 2018, from 161,000 to 180,500 HUF. The social contribution tax (SZOCHO) and the amount of the healthcare contribution (EHO) reduced from 22% to 19,5%. The simplified contribution to public revenues (EKHO) also decreased, the employer shall pay 19,5% EKHO instead of the previous 20%.  

Due to the increasing minimum wage the amount of the childcare benefits (GYED), the benefits for university students and graduates grew as well as the sick pay as of 1st January 2018. The eligible families are entitled to a maximum of 193,200 HUF in childcare benefits. Students enrolled in a bachelor’s program will be eligible for 96,600 HUF support and students enrolled in a master’s program for 126,350 HUF. Female university students or graduates are eligible for an extra year of child support up to the child’s second birthday. Moreover, fathers also eligible to claim baby-care allowance (CSED) in more cases from 1st January 2018. The daily maximum of sick pay increased from 8500 HUF to 9180 HUF.   

In addition to the above, the cafeteria rules have changed. New cafeteria element: a student loan reimbursement as employer benefit can be provided tax free up to the installments but not more than 27,600 HUF monthly. The conditions for a tax free housing allowance eased, the ceiling price of this benefit became higher (nearly 83,000 HUF). The burden on employers reduced from 43,66% to 40,71% in case of certain specific benefits (Erzsébet vouchers, hot meals at the work place, monthly public transport ticket, school starting support, contribution to a voluntary health fund/pension fund). The costs of cafeteria cash payment and benefits may be granted as Széchenyi Recreation Card („SZÉP” Card: accommodation, catering, leisure) remained the same 34,22%, if it does not exceed 450,000 HUF. 

The statutory retirement age increased to 63,5 year and the amount of pensions amended favorably. The pensions (including among others retirement pension, widows’ pension, orphans’ allowance etc.) increased with 3% with the effective date of 1st January 2018. The amount of minimum pension remained unchanged (28,500 HUF).

 

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Amendment of the Labour Code

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In case of executive employees the parties may deviate from the provisions of the Labour Code, except some provisions where the Labour Code expressly prohibits deviation. A new provision is that the employment contract of the executive employee shall not deviate from the provisions of § 128 of the Labour Code, meaning that the executive employee shall also be entitled to an unpaid leave until the child’s 3rd birthday for the purpose of childcare.

In case of pregnancy or human reproduction process, if the employee informs the employer on the above facts only after the termination notice has been handed over, the employer may unilaterally and without the employee’s consent decide to, but is not obliged to withdraw the termination notice within 15 days after the employee informed the employer on her condition.

§ 297 of the Labour Code has been replaced by new provisions. Pursuant to that, in case a foreign employee carries out work in Hungary in frame of cross-border provision of services, if the Hungarian party (receiver of the services) knows, or has reasonable grounds to know that the foreign employer has failed to comply with its obligation to pay wage and contributions after the employee, the Hungarian party will be jointly and severally liable with the foreign employer. It has also to be noted, that the parties may not vary from this provision in their contract.

As a general rule of the Labour Code a daily rest period of at least 11 hours shall be granted to the employees. The Labour Code contains several exceptions to this rule when a daily rest period of at least 8 hours is sufficient. From 2017 standby work will not be an exception any more, thus, 11 hours rest period has to be granted to these employees instead of the 8 hours presently stipulated by law.


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Amendment of the act on benefits of disadvantaged employees and the amendment of several acts

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From 2017 the amount of the rehabilitation contribution payable by the employer shall be nine times the minimum base salary for full-time employees on the first day of the current calendar year.

 

 

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Amendment of the Personal income tax act

Medium-sized companies, Employment, labour law, Start-ups /

As of 2017 the “cafeteria system” will be transformed, according to which the scope of the categories of cafeteria benefits (“cafeteria”) and certain benefits which are not considered as cafeteria (“certain benefits”), will change. In addition to this from 2017 the employer may also grant a maximum amount of net HUF 100.000,- in cash to the employee per year as part of the cafeteria with the reduced tax rate.

The amount of the reimbursement of the costs of travelling to work is partly tax-free. Currently the tax-free amount is HUF 9/km. In the future an amount of HUF 15/km will be tax-free.

The definition of “posting” has also been clarified. From August of 2016, posting shall mean any official or business travel ordered by the employer, not including the travel to work and the travel between the residence or place of stay of the employee and the seat or establishment of the employer.

 

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Amendment of the Civil Code – managing directors

Company groups, Corporate law, Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

Until now, the company and the managing director were jointly and severally liable towards third persons for non-contractual damages caused by the managing director in his executive capacity. Pursuant to the new provisions, only then will the managing director be jointly and severally liable with the company against third persons, if he has caused the damages wilfully in his capacity as managing director.

Furthermore, the amendment clarifies that the managing director’s liability for wilfully caused damage extends not only to non-contractual damages but also to contractual damages (until now contractual damages could only be claimed from the company, and not from the managing director).

 

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We are ranked in the Chambers EUROPE guide

Company groups, Employment, labour law, Medium-sized companies, News, Start-ups / / , ,

The prestigious Chambers and Partners also ranked CLVPartners in the Chambers EUROPE guide in Employment and in the Life Science areas.

Chambers wrote about our CLVPartners based on the clients’ opinion that “the team is known for growing strength in advising international and domestic clients, in sectors such as pharmaceuticals, retail, entertainment, on cross-border TUPE transactions, employment restructuring and redundancy cases. Boasts expertise in collective bargaining agreements, data privacy issues and negotiating with works councils and trade unions.”

The full results available here: http://www.chambersandpartners.com/108/23/editorial/7/1#22609124_editorial

25 April 2016

 

Should you have any questions regarding the above, please feel free to contact us.
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

 

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News on the amendments of Act I of 2012 on the Labour Code

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , , ,

According to the working paper available at the Government’s website, Act I of 2012 on the Labour Code (hereinafter referred to as the “Labour Code”) and other labour-related regulations – such as the Act III of 1952 on Civil Procedure, Act XCIII of 1993 on Labour Safety and Act LXXV of 1996 on Labour Inspection – are expected to be amended with effect from 1 January 2016. The planned amendments affect e.g. the regulations regarding the working place, termination and severance payments as well.

We will continuously inform you about the abovementioned amendments of the Labour Code if the single bill will become available.
 

Should you have any questions regarding the above, please feel free to contact us.
 
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

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Training Session

Company groups, Employment, labour law, Medium-sized companies, News, Start-ups /

Dr. Marianna Csabai (CLVPartners) and Dr Natasa Randlova (Randl & Partners) held a joint training session in Prague to Czech HR managers who are responsible for the Hungarian HR management. The attendees has found very useful the interactive session where they learnt the differences between the Hungarian and Czech labour law and the major rules and daily practices.

Should you have any questions regarding the above, please feel free to contact us.
 
Dr. Marianna Csabai
H-1126 Budapest, Tartsay Vilmos u. 3.
Tel: + 36 1 488 7008
Fax: + 36 1 488 7009
E-mail:

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The amendment of the Hungarian Labour Code

Company groups, Employment, labour law, Medium-sized companies, News, Start-ups / / , , ,

With the effective date of 01 January 2015 some provisions the Labour Code (Act No 1 of 2012) have been amended, as follows:
According to the previous provisions, based on the respective request of an employee, an employer was obliged to amend the working time of the employee to part time (half of the general full working time) provided that his or her child was younger than the age of three. From 01 January 2015 on, this provision has been extended so that if an employee is caring for three or more children, the obligation concerning the amendment of the working time to part time employment shall be applied until the age of five of the child. As this new rule introduced the definition of the “employee caring for three or more children”, the Labour Code now includes the definition of the employee who shall belong to the above category. Accordingly, an employee caring for three or more children shall be, any person who as a parent – within the meaning of the Act on Family Support –
i. is eligible for family allowance and receives or received childcare fee or childcare allowance, or
ii. received or receives child-rearing allowance.

The rules concerning the eligibility for annual leave have also been amended, accordingly an employee shall accrue holidays during the entire term of the sick leave, i.e. the previously applied 30 days limit have been abolished from the Labour Code.

According to the amendments, the employment contract of an executive employee cannot deviate from the provisions set out in Section 65 (3) a), b) and e) of the Labour Code. This means that employees receiving treatment related to a human reproductive procedure as specified in law (i.e. employees are protected during the treatment for a maximum of six months from the date the treatment begins) shall be considered as protected employees and therefore, the employer cannot terminate their employment during this period. (The termination protection rules set out in Section 65 (3) a) and b) of the Labour Code have already been applicable also to executive employees even before 01 January 2015.) The parties cannot deviate from this provision even with their consent in the frame of the employment contract.

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

Dr. Marianna Csabai
Dr. Boglárka Kricskovics-Béli
Dr. Nóra Óváry-Papp

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The amendment of the Act on Health Insurance

Pharmaceutical law, Company groups, Employment, labour law, Medium-sized companies, Start-ups / / , ,

Act No. 111 of 2014 about the amendment of certain health and health insurance acts adopted on 16 December 2014 (“Amendment Act“) affected various Hungarian laws. In the frame of this present newsletter we summarize only the most significant amendments of those which affect Act No. 83 of 1997 on the services of the mandatory health insurance (“Health Insurance Act“). Additional provisions of the Amendment Act will be discussed by us in a separate newsletter.

As a consequence of the Amendment Act, the definitions set out in the Health Insurance Act were extended with the definition of income, monthly contractual income and salary, further, this part of the Health Insurance Act listed the financial health care allowances. These are infant care fee – instead of the previously applied maternity pay, which shall be only considered as an amendment in the name of the allowance -, childcare fee and sick pay.

According to the Amendment Act when defining the aforementioned financial health care allowances, further, (irrespective of certain exemptions) the sick pay payable on account of accident, the reported income – reached in any relationship effective on the date of the eligibility – serving a basis for determining the personal income before tax shall be taken into consideration instead of the income reached in a relationship on the basis of which the affected person should have been considered as insured.

It was added to the Health Insurance Act, that the eligibility for infant care fee shall begin on the date of the childbirth, or on the first date of the maternity leave in case of premature child, the latest.

The amount of the infant care fee and the childcare fee remained unaltered, however, the calculation of the income serving basis for the payment of the above fees – to which the rules defining the sick leave pay shall still apply – have been amended. Accordingly, in case of a continuous relationship the amount of the sick leave pay shall not be defined based on the daily average of the income gained in the year preceding the eligibility date for the sick leave pay. According to the Amendment Act, as a general rule, the basis for sick leave pay shall be defined on the basis of the average daily income accrued in a 180 days period between the first day of the year preceding the date of being eligible for the sick leave pay and the last date of the third month preceding the eligibility date. For example: if the eligibility date of the sick leave pay is 15 June 2015, the period between 01 January 2014 and 31 March 2015 shall be reviewed and the income gained within 180 days before 31 March 2015 shall be the basis for the calculation of sick leave pay.

By sustaining the current structure, the Amendment Act sets out those cases when the insured person does not have either 180 days income, or 120 days income – that shall already been considered as an exceptional case.

According to the provisions of the Amendment Act, the detailed rules of defining and calculating the infant care fee and the sick leave pay will be included in a Government Decree.

A significant amendment is included in the Amendment Act, namely, that if any of the parents shall be considered as sick on account of caring for and staying with his or her child in the course of a treatment rendered in a hospital, the amount of the sick leave pay shall be 50% of the sick leave base instead of the previously applied 60%.

The rules concerning childcare fee have also been amended. Accordingly, the mother or that person who was eligible to an infant care fee and whose insured status terminated while being eligible for infant care fee, shall receive childcare fee, provided that the eligibility for infant care fee was acquired during a relationship on the basis of which this person was insured and lasted for at least 365 days within the two years prior to the child’s birth, further, if the child is raised in his or her household.

If on the date being eligible for childcare fee or two years before this date a person is or has already been eligible for childcare fee with regard to his or her other child, the period of payment of childcare fee:

  • cannot be shorter than the defined period of the childcare fee, paid the latest, further
  • cannot be extended with the infant care fee’s payment period for which the parent is eligible on account of the second child; further
  • cannot be extended with the payment period of the childcare fee and childcare allowance defined on account of the birth of the last child.

These provisions of the Amendment Act entered into force with the effective date of 1 January 2015.

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

Dr. Marianna Csabai
Dr. Boglárka Kricskovics-Béli
Dr. Nóra Óváry-Papp

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