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Employment Administration Speeds Up, Employment Certificate Is Introduced

Employment Administration Speeds Up, Employment Certificate Is Introduced

Hungary
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We are witnessing an important advancement in the field of employment administration in Hungary. Starting from 1 January 2024, the Act on the Promotion of Employment and Unemployment Benefits was amended, introducing the obligation for employers to issue an employment certificate following the termination of employment.

The amendment needed to ensure that employees do not receive six different documents when their employment relationship is terminated, but only one single document containing all the necessary information, either in electronic form or on paper.

Previously, the certificates to be issued included: the employer's certificate issued on termination of employment, a form for income from the employer and deduction of tax and tax advances on termination of employment, a certificate for contributions deducted and paid in the year in question, a form for maintenance obligations determined by court order, a certificate for the determination of unemployment benefit and jobseeker's allowance and the social certificate. All of these have been replaced by the employment certificate mentioned above.

The amendment also lists the contents of the certificate, including the employer's details, the employee's personal details, the nature and duration of the employment relationship, the position held, the income and benefits, the compensations, the deductions, the reasons for termination of employment, the leave – in particular paternity and parental leave granted -, the insurance details, the information on income paid and tax deductions made, and finally, the information on social security benefits such as sick pay, infant or child care allowances. The deadline for issuing the certificate is the last day of work in the case of resignation by the employer, and in all other cases, the employer must issue it to the employee within five working days of the termination of employment.

In conclusion, the amendment and the introduction of the employment certificate bring significant benefits. On one hand, it will require less time and resources on the part of employers and, on the other hand, it will provide employees with simpler and more transparent documentation of information about their employment affairs.

By Rita Parkanyi, Partner, KCG Partner

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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