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The End of The Year From HR Perspective

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

The end of the year is coming up fast and there are plenty tasks to arrange at the HR Departments. Among the others, it should be checked whether the holiday due for this year have been scheduled for all employees until 31 December, as well as, if the holiday agreements have been signed for 2020. Before entry into 2020, we wish to provide you with quick to do list and also to call your attention to the latest news and the expected relevant changes.
I. Unused holiday

The question of unused holiday at the end of the year is always a cardinal issue from HR view. Therefore, it is advisable to check if each employee how the annual leaves of the current year stands. Unused leave cannot be redeemed in cash, unless the employment relationship is terminated. Leave must therefore be scheduled even if the employee does not wish to take it.

The general rule is that leave due for 2019 cannot be transferred to 2020. Therefore, the remaining holiday shall be scheduled basically for the year of 2019. However in some exceptional cases it may be transferred to the next year, as follows:

·        If employment relationship began on or after 1 October 2019, holiday may be scheduled until 31 March 2020.

·        If, due to a cause at the employee’s side, holiday could not be scheduled in 2019 (e.g. illness, maternity leave, work incapacity, etc.), it can be scheduled within sixty days of the cause ceases to exist.

·        Leave which commences in the due year and does not exceed five working days in the following year shall be deemed to have been taken in the due year.

·        The additional leave due to the age of the employee may be scheduled until 31 December 2020, if the parties concluded an agreement on it in 2019.

·        In the event of economic reasons of particular importance or any direct and consequential reason arising in connection with its operations, the employer may allocate one-fourth of the employee’s holiday by 31 March of the following year if it is stipulated so in the collective agreement.

II. The case of extraordinary work (overtime)

Considering that extraordinary work has an annual limit, it is highly advisable to check how the company stands in this regard as we approach the end of the year.

In the case of full-time work, up to 250 hours of overtime per calendar year can be ordered.

Collective agreement allows 300 hours per year. Further, the employer and the employee may conclude an agreement on additional working hours so that it must not exceed 400 hours overtime per calendar years. This agreement may be terminated by the employee by the end of the calendar year.

However, the above mentioned annual limit shall apply proportionately if the employment relationship began during the year, for a fixed period or for part-time work. It is important that if the company exceeds the annual extraordinary working time limit, it may face serious fines as a result of any labour inspections.

III. Minimum wage and guaranteed wage minimum

As of January, the minimum wage will be expectedly increased again. In 2018, a two-year agreement was made at the meeting of the Competitive Sector and Government Permanent Consultation Forum to increase the minimum wage and the guaranteed wage minimum with 8%-8 % in 2019 and 2020. Thus, the minimum wage could rise to HUF 161,000 in 2020 and the guaranteed wage minimum to HUF 210,600.

The minimum wage and guaranteed wage minimum shall be published by a government decree which has not been issued yet, but it will be expectedly published until the end of the year.

After the decree has been published, the salaries shall be reviewed and the employment contracts shall be amended accordingly.

IV. Social contributions in 2020

With changes of social contribution there is nothing to do, however from payroll perspective it is good to know that according to the bill No. T/8021 from 1st July 2020 (i) pension contributions, (ii) in-kind and (iii) financial health insurance contributions, and (iv) labour market contributions will expectedly merge so called “social security contribution”. However, the rate remains the same, so in total 18.5%.

V. Working time schedule for the year of 2020

The minister of finance has the right to reschedule the working and rest days around the public holidays which changes shall apply in case of employees working under a fix, general working time schedule.

According to the decree of the minister of finance in the next year 21 August (Friday) and the 24 December 2020 (Thursday) shall be rest days, and the 29 August and the 12 December (Saturdays) 2020 are qualified as working days.

VI. Retirement age in 2020

According to Act LXXXI of 1997 employees were born in 1956 may be entitled to old-age pension when they reach the age of 64 plus 183 days. Therefore, the above mentioned employees will be eligible for pension in 2020.

It is remained unchanged that the employee’s employment shall not be terminated due to the retirement.

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).