Reimbursement of expenses for employees travelling home

On 1 January 2024, there was a change in the amount of the compensation that employees are entitled to for the reimbursement of their travel expenses related to commuting to work. The monthly upper limit of the travel expenses reimbursement paid by the employer has been increased to HUF 56,240.
The recommended actions are as follows:

• Verify the travel reimbursement levels.
• Update any documents regulating the travel cost reimbursements provided to employees.

Implementation of the Whistleblowing Directive

On 25 May 2023, Act XXV of 2023 on the Regulations of Complaints, Notifications of Public Interest and the Reporting of Abuse ("Act") has been proclaimed, which comprises the provisions of the domestic implementation of the Whistleblowing Directive (EU) 2019/1937.
Business entities employing at least 50 employees are obliged to operate internal Whistleblowing System. The internal Whistleblowing System must be operated on a local level if the employer has more than 249 employees. 
The recommended actions are as follows:

• Verify if any Whistleblowing System is available at the employer.
• Review Whistleblowing Systems already operating.
• Verify if the employer has the necessary privacy notices and documents to carry out the relevant legitimate interest balancing tests adequately, and supplement the internal records of processing activities.
• Review applicable privacy notices, relevant legitimate interest balancing tests, and supplement the internal records of processing activities.
• Prepare template letters and notices to carry out internal investigations.

Notification of parental leave

On 1 January 2024, the Act I of 2012 on the Labour Code ("Labour Code") changed. The amendment clarifies that employees must notify the employer regarding their intention to go on parental leave or additional leave they are entitled to for having children under the age of 16, at least 15 days before the intended start of such leave.

The recommended action is as follows:

• Review the leave request procedures and the applicable internal policies.

Election of health and safety representatives

On 1 January 2024, Act XCIII of 1993 on Labour Safety ("Labour Safety Act") changed, according to which the election of the safety and health representative must be held within six months of the date on which such obligation arises, and that the election of a safety and health representative must be held within three months of the expiry of the mandate of such representative.

The recommended action is as follows:

• Review the conditions and procedures of safety and health representatives.

Abolition of mandatory medical examination

On 1 September 2024, the Labour Safety Act will change. As a result of the amendment, the mandatory medical examination, which was previously part of the mandatory examination of fitness for work, will be abolished. However, the abolition is not general, as the medical examination remains compulsory if it is specified in a separate law or regulation, or at the discretion of the employer.

The recommended action is as follows:

• Verify the necessity of mandatory medical examinations.

Changes to the minimum wage

On 1 December 2023, the general minimum wage amount was increased as follows:

• Minimum monthly wage, which is gross HUF 266,801
• Minimum weekly wage, which is gross HUF 61,340
• Minimum daily wage, which is gross HUF 12,270
• Minimum hourly wage, which is gross HUF 1,534

From 1 December 2023, the guaranteed minimum wage in positions requiring at least secondary education or secondary vocational were increased as follows:

• Minimum monthly wage, which is gross HUF 326,000P
• Minimum weekly wage, which is gross HUF 74,950
• Minimum daily wage, which is gross HUF 14,990
• Minimum hourly wage, which is gross HUF 1,874

The recommended action is as follows:

• Verify employee remuneration levels.

Decision of the Supreme Court on platform workers

On 13 December 2023, the Hungarian Supreme Court established that the legal relationship between platform operators and platform workers cannot be considered an employment relationship, because the platform operator does not have right to give instructions and the right of control, which could prove the existence of subordination between the parties. In the absence of the primary qualifying characteristic of the employment relationship, the broad right to give instructions, including specifying the place, time and manner of work, platform workers are not in employment relationship, and therefore the protective provisions of the Labour Code do not apply.

The recommended action is as follows:

• Verify the main characteristics of the employees' relationship.

New immigration act

On 1 January 2024, Act XC of 2023 on the General Rules for the Entry and Residence of Third-Country Nationals ("New Third-Country Nationals Act") entered into force, replacing, among others, Act II of 2007 on the Entry and Residence of Third-Country Nationals. The New Third-Country Nationals Act introduces new types of residence permits, including the visitor investor, self-employed visitor, or visitor worker residence permit or the Hungarian Card.

The recommended actions are as follows:

• Verify the purpose of third-country nationals residence in Hungary.
• Verify which type of residence permit is the most suitable for third-country national employees.

New regulations on the Environmental, Social and Governance (ESG) obligations of the business undertakings

Since 1 January 2024, Hungary has two separate regimes for ESG related disclosures: (a) The Accounting Act (Act C of 2000 on Accounting, as amended); and (b) the ESG Act (Act CVIII of 2023 on the Rules of Environmentally, Societally and Socially Conscious Corporate Social Responsibility Reporting Promoting Sustainable Finance and Unified Corporate Responsibility). The introduction of this legislative package is part of the implementation of CSRD in Hungary.

The Accounting Act and the ESG Act require a company the i) turnover, ii) balance sheet total and iii) average number of employees of which exceed the threshold set out in the relevant Act to prepare two separate reports regarding the company's ESG performance: (a) the sustainability report; and (b) the ESG report.

The European Sustainability Reporting Standards, being the basis of the scope of disclosure under the ESG regulations, will require business entities to disclose information, among others, on employee compensations, pay gap between men and women, number of sick days, hours spent on overtime and other employment related matters.

The recommended actions are as follows:

• Evaluate if your business is covered by the ESG regimes of Hungary.
• Identify employment benefits and social contribution of your business that must be included in your sustainability report or ESG report.
• Communicate with suppliers and contractors regarding their ESG performance (including employment benefits and social contribution).
• Carry out regular risk assessment.
• Set up a risk management system.
• Develop an internal accountability strategy and system.
• Establish preventive and corrective measures to identify and mitigate sustainability related risks.
• Prepare your first sustainability and ESG report.

Understanding emerging technology

In December 2023, the European Parliament and Council reached a political deal on the so-called AI Act that will regulate the development and introduction of AI within the European Union.

The using of highly skilled artificial intelligence became a new phenomenon at businesses to which the legislator had to provide an adequate response. The emerging technology is not only a hot topic at the institutions of the European Union but it causes confusion, apprehension and excitement among employees as well.

Consequently, it is more important than ever for businesses to provide comprehensive and detailed information to their employees on the effects of the technology on their day to day work.

The recommended actions are as follows:

• Prepare and disclose an AI strategy within the organization so that the employees could get familiarized with your business' approach and expectations.
• Organize internal hearings where employees could articulate their feelings about the new technologies.
• Organize workshops and trainings in order to improve the competency of the workforce to efficiently use the state of the art technologies of your business in the company's day to day operation.
• Review your internal data privacy related documents to identify any legal gap that could expose your business to data privacy risks due to the use of artificial intelligence.
• Introduce internal policies on the use of AI in the workplace and supplement your Code of Conduct with provisions that regulates the unethical utilization of AI.