wage subsidy

New COVID-19 restrictions in Hungary: consequences for employers

The restrictions (of Gov. Decree 484/2020 (XI. 10.)) apply as of 11 November 2020 for the whole of Hungary, effective until 11 December 2020. These restrictions may be prolonged if necessary.
The current rules concerning wearing masks, social distancing and border crossing remain in effect, while wearing masks is now obligatory in public spaces designated by the local councils in cities exceeding 10,000 inhabitants.

I. Curfew between 20:00 and 5:00 with an exemption regarding going to work

During the curfew, only people going from their homes (place of residence) to work and back home from work can be in public spaces. A sample of the certificate to be issued by the employers can be found on the Government website:

II. Rules regarding education

Nurseries, kindergartens and primary schools remain open for those under 14 years of age. Online education has been introduced from grade 9 in middle schools and colleges/universities, and dormitories are closed.

III. General ban on events

All events are banned. This also applies to all professional events held in person (conferences, workshops, etc.).

IV. Restrictions on trade and catering

Restaurants are closed and only takeaway and home delivery are allowed, however, factory canteens may remain open. Shops, stores and other services except for pharmacies and petrol stations must close at 19:00, after which only those working there may stay on site. Hotels may only accommodate guests arriving on business, economic or education purposes.

V. Sanctions

In the event of violation of the rules applicable to events or institutions, shops and facilities, the police may close the area, premises or institution (except for educational institutions) for a period of one day to one year and impose a fine of HUF 100,000 to HUF 1,000,000.

VI. Economic protection measures

In order to protect jobs, the Government has also introduced economic protection measures (Decree no. 485/2020. (XI. 10.)), as follows.

1. Tax allowance
For November 2020 employers operating in the scope of activity listed in the Decree shall not need to pay social contributions and vocational training contributions. Small entrepreneurs within the scope of activity listed in the Decree do not need to count personal payments to their small business tax base relating to employees who would have been dismissed due to the state of emergency, provided that these employees are not dismissed and receive their salaries.

2. Provision for hotels
The state will reimburse 80% of the price (net income) of bookings booked for within the next 30 days and received by the hotels registered in the National Tourism Data Providing Centre (Nemzeti Turisztikai Adatszolgáltató Központ) until 8 November 2020, provided that the hotel employees are not dismissed and receive their salaries.

3. Wage subsidies
50% of the wages for November 2020 of the employees of restaurants and leisure facilities listed in the Decree will be reimbursed by the state in the form of a subsidy, provided that the employees are not dismissed and receive their salaries.

The ‘actual main activity’ is the activity which generated the most revenue, which must be at least 30% of the revenue in the previous six months.

There are still many open questions regarding the implementation of the governmental measures described above, we shall provide information on possible further measures after they have been published.

Aid Provided To Employment Is Very Limited

The Hungarian government announced that they are going to wage support the wages to those employees that who are still able to work.
The the maximum amount of Wage Subsidy shall be HUF 74,900 / employee. However, in order to request the employee and the employee jointly shall apply for the wage subsidy on cinditionsconditions that they both comply with even the company has to meet certain extensive criteria and which this further limits it’s use. The employers must also present its measures taken or is expected to take to overcome the economic difficulties and to exhaust the working time available for rescheduling work and that is operation is a national interest which is undefined category at the moment. Application for the Wage Subsidly may be submitted from the 16th of April 2020. In order to be eligible compliance with the strict requirements must be substantiated by fully comprehensive and detailed documentation. Should an application refused by the authority, no appeal or any legal way is allowed.

Government decree containing further derogations from the labour code for example:as the employers can unilaterally introduce a framework of working time up to 24 months.