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EU Blue Card minimum wage in 2025

News / / ,

 

The minimum wage that third-country professionals who work or will work in Hungary with an EU Blue Card can expect in 2025 has recently been published.

Why is this minimum wage important?

For this type of residence permit, the level of remuneration not only reflects professional standards, but is also an important criterion for the compliance of applicants and their employers. One important aspect of the minimum amount is that it avoids underpayment among those concerned, while it may also enhance the attractiveness of highly skilled positions.

In 2025, the minimum standard monthly wage will be HUF 883,671. And for specified health professions (general practitioner, pharmacist, specialised pharmacist, optometrist, dietician and nutritionist, physiotherapist, nurse, paramedic, nurse (tertiary level), midwife (tertiary level)) the minimum monthly wage is HUF 706,937.

What should employers look out for?

Employers concerned should check in good time that the wages of workers who are or will be employed with an EU Blue Card are in line with the new requirements.

If not, it is advisable to prepare for the change, which can go both ways:

  • adapt the related contracts to the new minimum wage requirements, or
  • if a pay rise is not possible, apply for other residence permit enabling continued employment.

If you have any questions about how to implement the changes in practice, or about the EU Blue Card in general, please contact our law firm.

Author: dr. Eszter Bohati, lawyer – CLVPartners

Residing in Hungary as a managing director

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Introduction

In the next part of our series of articles, we will look at the residence of third-country nationals in Hungary as managing directors from several perspectives.

The issue may also be of particular importance because it is not at all unusual nowadays to appoint foreigners, often third-country nationals, to certain management positions in companies. In many cases, the appointment of such persons may not even include among the preliminary considerations the need to have a document proving their residence and the right to perform the activity.

In this article, we try to provide our readers with some food for thought information that can help in similar and not necessarily simple situations.

Before and after the Btátv.

There are also significant differences between the former (the Harmtv.) and the new legislation (i.e. the Btátv.) in this area.

Under the Harmtv., it was still possible to apply for a residence permit for the purpose of pursuit of gainful activity, which may sound familiar to many, if you wanted to work in Hungary as a managing director of a company, cooperative or other legal entity established for profit. However, in cases where the person appointed as a managing director did not wish to carry out their duties related to such a position or would have carried out not only such duties but (also) duties as a worker in the classical sense, they had to apply for a residence permit for the purpose of employment instead of for the purpose of pursuit of gainful activity.

The Btátv. provides for a much more colourful palette than this binary system when it comes to one or the other of the activities of executive officers in Hungary, which we will deal with below.

Executive officer or classic employee

Although the dual system for the performance of representative and employee functions, which existed under the Harmtv., was basically maintained under the Btátv., the current code allows for a choice between several types of licences within these two main categories, depending on the circumstances. The following shows how each type of licence builds on the others and the main subdivisions under which they may be used.

Name of the residence permit Performing the duties of an executive officer[1] Actual work outside the scope of the executive function
Guest self-employment Available from Not applicable
Guest investor[2] Available from Not applicable
Hungarian Card Not applicable Available from
Company Card Available from Available from
National Card Not applicable Available from

 Guest self-employment

As in all cases, in order to be approved by the authorities, the applicant must provide evidence of the circumstances relating to the residence permit and duly substantiating the application.

For this type of residence permit, the applicant must prove that:

  • the company has been legally employing at least five Hungarian nationals or persons with the right of free movement and residence on a full-time basis for at least six consecutive months, or
  • their presence in Hungary is essential for the operation of the company and their detailed declaration of economic activity attached to the application shows that they are likely to generate income for the company that will ensure its subsistence. In particular, they can substantiate their declaration by one of the following: a contract of engagement, a contract of commission, an agreement, a contract of sale or a contract of purchase.

It is important to note that in addition to the above, the immigration authorities may also ask for additional documents.

It may be a consideration that a person holding a residence permit for guest self-employment is subject to a regular registration obligation but may do so electronically through the immigration authority’s platform.

Hungarian Card

In contrast to the previous type, the Hungarian Card cannot be applied for the performance of managerial duties in Hungary, but only for actual work outside the scope of the executive function. For the latter only if the applicant has an appropriate higher professional qualification recognised by the authority, i.e. this type is subject to regulated qualifications.

In addition to proof of the applicant’s qualifications, the immigration authority may also request additional documentation to support the operation of the affected company, as detailed in the guest self-employment residence permit.

Company Card

This type is new to the residence rules. The purpose of its introduction – as its name suggests – is to make investment in Hungary as attractive as possible. Therefore, not only the applicant, but also the company applying for the residence permit must meet certain prerequisites. For example, the legal person may be an employer as defined in the Government Decree or an entity who has concluded a settlement contract with it.

National Card

You can apply for the National Card not only for general employment, but also for employment that goes beyond the duties of an executive officer, as we have examined.  However, it is important to note that it is only available to executive officers of a specific nationality.

Summary

It can be seen, therefore, that the scope of residence permits that can be applied for the two purposes outlined overlap or are mutually exclusive, but in principle provide full coverage for the different cases. This also means, however, that, unlike in the past, which was more familiar and simpler, greater care must be taken in choosing the right type of residence permit, so that it serves the real interests of the applicant, taking into account all the other circumstances not yet discussed in this article as well.

Author: dr. Eszter Bohati, lawyer – CLVPartners

[1] Acting as a director of a company, cooperative or other legal person – for profit

[2] We will not go into this category in detail, we will just mention it.

Residence permit for employment purposes

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Introduction

Perhaps no one will think it is an exaggeration to say that the “general” residence permit for work purposes under the Harmtv. and the same under the Btátv. are the most applied for by foreigners when it comes to working in Hungary. This is true even though a number of permits for other purposes have been added to the range of employment-related possibilities over time.

In view of the practical importance of this type of permit, this article will look at the rights and obligations attached to the said permit under the Btátv., in comparison with its predecessor under the Harmtv., to help you understand what has changed or remained the same.

What remains the same

What will surely be familiar to anyone who has at least once dealt with such a residence permit application is the underlying prerequisite: the employment objective. Such a permit is primarily available to those who wish to spend a longer period in Hungary in order to carry out actual work for or under the direction of another person, for consideration, on the basis of an employment relationship. The Btátv. has not changed this, so the contractual relationship for this purpose must still be proven when applying (e.g. most often by a preliminary agreement with the future employer).

It may seem novel, but it is not really, that the Government can define occupations in which employment is prohibited. A similar protectionist provision has been part of the terms and conditions of employment of third-country nationals in the country for almost 30 years, although it was not so ‘in the spotlight’ before.

The same is true for the limitation of the number of foreigners employed in Hungary, as it has been a relatively long-standing option to maximize the number of residence permits that can be issued. The magic number for 2024 is 65,000, i.e. this is the maximum number of residence permits for employment purposes and guest worker residence permits that can be issued under the single application procedure this year.

What has changed

Guest worker instead of employment purposes

The Btátv. has completely overhauled the regulatory system. Among the redefinitions, the category of guest worker was born. This generic term, however, refers to a group, as it covers and encompasses not one but four types of residence permit. These are: seasonal guest worker, guest worker employed for the purpose of carrying out a project, residence permit for employment purposes and guest worker residence permit. The old-new type therefore falls into this category.

Why do you want to come?

Another noteworthy difference is the other purpose for which the authorisation is granted.

In the past, an employed person could also redeem this residence permit if, as an owner or executive officer of a company, cooperative or other legal person established for gainful purposes, actually intended to carry out work outside the scope of this activity. However, since under the Harmtv. a managing director could only work in Hungary under one legal title (i.e. one residence permit), the one for employment purposes emerged as the winner in the “competition” between two types of permits – which would otherwise be applicable to him/her – and it was worth obtaining it. In comparison, the Btátv. now places residence and activity in Hungary for such purposes under a completely different immigration category.

The rule that a residence permit for employment purposes can be obtained even if the employment relationship is not with the Hungarian employer, but the foreign worker is only on secondment in the Hungarian company is new.

What about the duration?

The maximum period of validity remains two years. Under the Btátv., however, the related provisions are also slightly different. In contrast to the previous application procedure, where employees could in practice have their residence permit extended as often as their (work) contract with their employer was extended, the possibility of continuous extension without limitation has been abolished under the new system. After three years from the date of the first issue, the worker concerned must apply for a new residence permit instead of an extension.

Who else can come?

Under the Harmtv., a family member of a foreign national holding or applying for a residence permit for employment purposes could apply for approval of residence in Hungary for the purpose of family reunification on the basis of the residence permit of the former. This meant that the person with a relatively close family relationship could, if the other conditions of the application were met, live here with their working relative even without an employment relationship.

As part of the conceptual revision of the Btátv., this possibility was not left untouched. Residence for the purpose of family reunification may still be granted to a very limited number of persons who previously held such a permit, but the new code has removed this possibility for family members of holders of the new type of work permit.  This may, in practical terms, lead to a significant change in the willingness to work, given the competition for certain guest workers with close family ties. However, no concrete negative effects that can be translated into figures can be reported at this stage.

Leaving the country as an employer’s obligation

There was probably no doubt in anyone’s mind before that a temporary worker could only remain in the country after the end of their temporary employment if there was a valid reason and an accompanying authorisation. If there was none, they had to leave. Violation of this obligation was also sanctioned by the Harmtv.

However, the Btátv. has also taken this to a new level, and to make the employer feel the weight of responsibility (even more), a new type of fine has been introduced, with a clearly visible amount. In this way, companies have an even greater interest in ensuring that all their foreign workers are, if not sent home, then at least sent outside the country within a short period of time. There is currently no well-developed official practice on how companies can best meet these obligations in a way that protects them, but if you are interested in our advice and suggestions in this regard, please contact us.

Summary

It is important to note that this summary is intended to provide a comprehensive overview of the overlaps and differences between the referred residence permits, but not all relevant parts have been covered and, due to its nature and general purpose, this article does not constitute legal advice. If you have any questions, either about the above, or about background not covered here, or if you just want a more comprehensive summary, we encourage you to contact us.

Author: dr. Eszter Bohati, lawyer – CLVPartners

The new era started on 1 January 2024 – Btátv.

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Introduction

Many of you will have read in many places about the new immigration code that arrived almost in tandem with 2024. With this series of articles, we will try to cover the relevant topics and changes not only in general terms, but also by answering more specific questions that may affect clients in general, as practitioners. With this aim in mind, the topics covered will essentially cover employment issues.

However, in order to put the changes and knowledge into context and to assist later interpretation, the first part of our initiative presents a summary of the changes to the legislation referred to.

Old and new

Perhaps the most noteworthy change between the former (i.e. the Harmtv.) and the new legislation (i.e. the Btátv.) is that the legislator has moved from a more general to a more categorical and in many respects more restrictive form of regulation. To be specific, residence in Hungary for employment purposes is covered by several types of permits that did not exist before or were regulated differently from the previous ones, but there are also permits that have been created to unify the ‘scattered’ provisions (see the National Card). The mechanisms practised under the Harmtv. are therefore not applicable under the Btátv. or only with significant differences.

In addition, the Btátv. also sets out protectionist objectives. For example, it has been declared that the new law aims to tighten “the legal titles and conditions of residence and employment of foreign nationals in Hungary“, to give preference to the employment of Hungarian workers over foreigners and to create a barrier against mass immigration.

It is important to note, however, that the new Code and its implementing regulation do not mean that the previous rules no longer need to be applied, or in certain cases may not apply. In fact, there are certain purposes of residence and situations in which the Harmtv. continues to apply, and it is necessary to be aware of it. Such a ‘surviving’ provision applies, for example, to residence permits to ensure family reunification, which (still) may be issued under the previous rules, and which may be of particular importance for certain groups of workers, even if (only) in terms of motivating and retaining employees.

Third-country national vs. person with the right of free movement and residence

The legislative background of course maintains the distinction between third-country nationals and persons having the right of free movement and residence (mainly EEA nationals and their family members). In this respect, it is suggested to keep in mind the practical aspect that in the case of a third-country national whom the employer knows will “join” or arrive with an EEA national entitled to a longer stay, the employer should check in advance whether such family member is covered by the Act on Admission and Residence of Persons with the Right of Free Movement and Residence and thus effectively exempted from the Btátv.

Categories by length of stay

The Btátv. basically distinguishes between three categories depending on how long the third-country national wishes to stay in Hungary, so the type of permit required can be decided on the basis of this period:

  1. short: i.e. any stay of no more than ninety days in any one hundred and eighty days is planned by the third-country national. This requires – for entry purposes – “only” a visa, or even none for certain nationals.
  2. permanent: this category includes planned stays in Hungary of more than ninety days in any one hundred and eighty days. Stays of this duration are subject to authorisation, i.e. the person concerned must apply to the immigration authority for a permit adapted to the purpose of his/her stay, which is in fact pre-selected on the basis of the purpose of the stay.
  3. long-term: this is a group of residence permits and cases for indefinite term, and of course subject to additional conditions compared to the previous categories.

The second, and most commonly used, category and duration of the authorisation is always purpose-bound. For this reason, it is very important that the employer and the person concerned consult an application specialist beforehand on the type of permit that is actually suitable for the purpose, as an incorrect application can lead to a significant delay in the establishment of the employment relationship.

As an illustration, a very simplified rule of thumb, but at least reminiscent of a preliminary assessment of the conditions for authorisation, has been modelled on the known principle. This means that all third-country nationals are covered by the Btátv., but not all persons covered by the Btátv. need a permit from the labour authority (either separately or combined with their residence) to work (as mentioned in the previous point, there are of course exceptions in the direction that the third-country national is not covered by the Btátv., but in practice these are the rarest.)

Summary

In general terms, the new legal regime allows some people to work in Hungary under stricter rules, while others – if the conditions are met – can benefit significantly. In order to comply with the stricter requirements and to benefit from such potential “advantages”, it is recommended that all concerned seek prior advice on this issue. Should any questions arise in this respect, our office is of course at your disposal to help you untie any knots.

Author: dr. Eszter Bohati, lawyer – CLVPartners

The changes on the electronic signature and AVDH

News, Electronic signature / / ,

As reported in our previous newsletter, the so-called Digital Citizenship Programme (DÁP) will enter a new phase from the beginning of next year. The next step of the programme will also affect the current practice of the Identification Based Document Authentication (AVDH), as this option will basically be abolished. We have summarized the most important information regarding the changes below.

AVDH covers a service that allows you to authenticate any electronic document easily and free of charge. The service is currently available to every natural person, who has a Client Gate. A document authenticated with AVDH resulted a private document with full probative value, which could be used not only for private purposes (e.g., it could also be used as a company representative).

However, under the Digital Citizenship Act, AVDH will cease to exist from the beginning of next year. Therefore, those who have been using AVDH authentication will have to look for a new e-signature solution from the beginning of next year. Below are some examples of the options available:

E-signature function of DÁP

  • DÁP will also provide a qualified electronic signature free of charge;will allow electronic documents to be signed by several persons in a transparent way;
  • the disadvantage of DÁP is that it can only be used by private persons for private matters, thus it will not be suitable for company signatures;
  • however, companies will be able to accept eSigned documents signed from their private clients or employees.

E-signatures provided by trust service provider

  • (qualified) trust service providers typically provide all types of e-signatures [simple electronic signature (SES); advanced electronic signature (AES), qualified electronic signature (QES)] or, in the case of companies, an equivalent electronic seal to their customers for free of charge;
  • however, some service providers (e.g., NISZ, Adobe) offer certain e-signatures or e-seals, typically with a lower level of security, free of charge, but subject to additional conditions in some cases.

For the purpose to choose the suitable service provider and e-signature/e-seal, it is first necessary to consider the purpose for which it is to be used. In the case of employment relationships, for example, most legislation does not set any formal criterion or requires at most a written form, which is already satisfied by a simple e-signature/e-seal.

Based on the above, it is important to prepare for the change and review your company’s electronic signature practices before the end of the year. This will necessarily include determining the type of electronic signatures to be used, which may depend heavily on the legal requirements of the field of application. In addition, it is highly recommended to have an internal policy on the use of electronic signatures within the company.

Expected changes in the area of labour law

News, Employment, labour law / / ,

On 29th October 2024, the Government submitted its bill proposal number T/9718 (“Proposal“), which contains provisions amending certain labour legislation for the year 2025.  The Proposal concerns, inter alia, Act I of 2012 on the Labour Code (“Labour Code“) and Act XCIII of 1993 on Labour Safety (“Labour Safety Act“). The main changes of the Proposal are summarised below.

Under one of the provisions of the Proposal concerning the Labour Code, workers who would be required to work for more than eight hours on the day of an election or a referendum would be exempted from their work obligation for a period of 2 hours to ensure their participation in these events. Although the Labour Code has already provided that the employees right to vote must be guaranteed, the amendment clarifies the permitted period of absence.

Furthermore, the proposal would also extend the period for using paternity leave from 2 months to 4 months. This would mean that fathers would have more time after the birth of their child to use this type of leave.

The current measures protecting executive employees would also be extended, because the concerned employees’ employment could not be terminated by the employer during paternity leave.

With the amendment of the Labour Safety Act, the government’s declared aim is to ensure that employers manage safety and health documentation in a more up-to-date and transparent manner. In addition, the proposal would create the possibility for companies to pay their OSH fines in instalments, thus protecting smaller businesses or businesses who have financial difficulties.

If the Parliament votes in favour, the amendments will enter into force on 1 of January 2025.

New rules of aptitude tests

News, Data protection, Employment, labour law / / , , ,

Partial abolition of the employer’s obligation to provide an aptitude test

The subject of much debate and uncertainty in recent months has been the abolition of the compulsory assessment of employees’ fitness for work by employers. The officially communicated legislative aim of the phase-out is (also) to reduce the administrative burden on companies. The purpose of this newsletter is to provide guidance to our clients on the changes and their associated responsibilities.

1.  The previous rules

Previously, the Labour Code and the Occupational Safety and Health Act generally stipulated that employers must provide an occupational fitness assessment free of charge for the employee before the start of the employment and at regular intervals during the employment. Unless the firm’s activity or the requirements of the job were subject to an exception rule, the general rule for the assessment of fitness for work was the NM Decree No. 33/1998 (VI.24.) (the “Decree“).

2. Legislative changes already in force and expected

In order to reduce the aforementioned corporate obligations, both the Labour Code and the Occupational Health and Safety Act were amended with effect from 1 September 2024.

However, the new wording did not fully clarify the obligations of companies. According to the regulation, in general cases, i.e. not covered by a specific occupational requirement (e.g. military service), the test must be carried out if the employer decides to continue the practice in the absence of an obligation or if the law continues to require it.

In the latter case, the draft of the proposals for public consultation have been published in recent weeks, several of which will enter into force in the coming days which aim to clarify when testing is mandatory. Our understanding is that those firms will continue to be obliged to carry out aptitude tests who are operating in the sectors covered by the drafts (e.g. construction, commerce). However, even for firms falling under the sectoral classification, only those workers who, by virtue of their job, fall into the categories listed in the same drafts (e.g. workers exposed to increased risk of accidents, of noise, of manual handling of loads over 10 kg; or workers who also work night shifts). There is one case in which the determining factor will not be the sectoral classification and the job, because if the employee works at night on a regular basis or for at least a quarter of his or her annual working time, he or she falls within the mandatory scope of the test, irrespective of the employer’s sectoral classification.

3. Proposal

Based on the above, it would make sense to recommend that companies should first check whether they fall within a sector covered by the drafts, and then, as a second step, assess the jobs covered by the obligation and organize the aptitude test for these employees.

However, the Occupational Health and Safety Act continues to provide as a general rule that the company is responsible for ensuring that the health of the worker is not adversely affected by his or her employment. This obligation can only be fulfilled with a high degree of certainty if the company assesses the potential risks to the employee on a case-by-case basis, taking into account the specific nature of the job. In the light of this, we recommend that companies should, as far as possible, maintain the aptitude test for all employees in accordance with the Decree until the detailed rules (including regulations related to the implementation of the Occupational Health and Safety Act) are known in their final form.

It is worth noting that the change has not only an employment law but also a data protection dimension, as the test regime is now in many cases based on the company’s decision, which requires additional data processing documentation.

Welcome two new lawyers to the CLVPartners© team!

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CLVPartners© Law Firm is pleased to announce two new talented professional team members, Eszter Bohati and Anikó Hrebenku who have recently joined our team.

Eszter has more than 10 years of experience in the legal profession, 8 of which she spent in international law firms, advising on labor law, immigration, and data protection issues. She assists the law firm’s Clients in solving their everyday legal problems in  English and Hungarian and draws on her previous experience to provide personalized, high-quality solutions.

Anikó graduated from Eötvös Loránd University in 2017 and successfully admitted to the Budapest Bar Association in 2021. She gained remarkable experience at several law firms through the years in civil and labor law. She mainly supports our Clients in employment law, company law, and data protection issues in English, German, and Hungarian.

Please join us in welcoming Eszter and Anikó to our team. We are convinced that with their diverse backgrounds and exceptional skills, their arrival will further enhance our firm’s capabilities and performance to deliver excellent services to our Clients.

Our law firm retains Top-Tier Firm Rankings in The Legal 500 EMEA 2024 Edition

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We are delighted to announce that we have again been ranked as a top-tier firm in The Legal 500 EMEA 2024 edition. Our services have been ranked in Employment and Commercial, Corporate and M&A practice areas. The reviewers appreciated among others our multinational clientele in various sectors, a key area of strengths in assisting our clients with digital transformations, and our extensive expertise in cross-border transactions.

The Legal 500 EMEA guide provides researched coverage of over 80 countries and over 2,700 ranked law firms. Researchers are free to make ranking decisions on merit alone. Ranking is conducted annually, providing a detailed qualitative assessment of various factors including work conducted by law firms over the past 12 months and historically; experience and depth of teams; specialisms and ancillary services; and, importantly, opinions of law firms” clients,

It is a special honour to be part of this publication and we are thankful to our clients who provided these excellent feedback on our performance.

We are happy to share some of the Testimonial given by our Clients to Legal 500 EMEA team:

“The team is proactive, quick to respond and eager to find a business-satisfactory solution to all problems.”

„I have received the answer to our queries quickly and professionally, the problems were reviewed from a wide perspective and always a bigger picture was taken into account to find a satisfactory solution to the query or challenge.”

„Our direct contacts are Anna Katalin Papp and Barbara Seregély. They are always available for us, we can always count on their cooperative work, they are professionally well prepared. If there are some changes in the legislation, they always draw our attention to them.”

„Working for many years with CLV, we met young and experienced colleagues, and all gave their full expertise in their fast replies. CLV is capable of working on an international level in relation to multinational tasks, which is important for us.”

„They all speak a high level of English and are well prepared. In terms of timing of meetings, we always received flexibility according to our needs. In case of very specific questions, they have experts to provide the adequate explanation.”

„The relationship is really good, and open minded. The advisor is ready to think out of the box, and not tied strictly to the question, if they can help with their advice.”

CLVPartners has been recognized again in Chambers Europe Legal Guide 2024

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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.