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Control over Employers to be Increased in 2021

Control over Employers to be Increased in 2021

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The economic situation caused by the coronavirus pandemic has highlighted the need for regulations that protect jobs and can respond effectively to the challenges of the economic environment and the labor market of this unprecedented time. It is essential for labor market actors to maintain and promote jobs that provide legal employment and to create such jobs as widely as possible, therefore, the Hungarian Government issued a bill about employment services, subsidies and employment supervision to the Parliament for legislation.

The objective of the bill is to increase support for employers, minimize COVID-19 impacts and aid jobseekers to respond quickly to the needs of the labor market and to make more efficient use of budgetary and European resources.

Employment promotion services and grants would be freely available to those unemployed who are looking to get a job, and those employees who need help keeping their jobs. Setting up this system would be the joint responsibility of the Government, local governments, employers and employees and their advocacy organizations together. These services can be provided by the state employment body or registered employment service organizations. Services provided by the state employment body are to be funded from the Economic Protection Employment Fund or from EU funds.

In the case of the provision of employment aid, the recipient of the aid has to enter an official contract. In case the aid was unrightfully issued, it has to be repaid by the recipient including transaction interest and default interest. If requested specifically in a case which deserves special consideration with regard to illegible subsidies already paid, the head of the public employment body would have the right to waive the need of the repayment fully or partially or the paying of transaction interest or default interest.

To promote employment, the employer assists the public employment body by notification including its need for labor and dismissing. These notifications are expected continuously, or at least at the time when a job position is taken.

With regard to the supervision of employment, the bill determines the subject regarding state supervision over the basic obligations established in the legislation on employment, the order of procedure and the legal consequences of the violation of these obligations. Minimum requirements of the legislation governing the employment relationship retention by the employer is monitored by the employment supervisory authority, which is to be appointed by the Government in a separate decree. In addition to the legal framework, detailed regulations will be contained in a government decree. If passed, the law would enter into force on 1 March 2021. In non-regulated matters, rules contained in Act IV of 1991 on the Promotion of Employment and Benefits for the Unemployed would be applicable.

By Levente Csengery, Partner, KCG Partners Law Firm

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
  • We push boundaries by looking for innovative solutions that can empower our clients to achieve greater results.
  • We place our experience, commitment and professionalism to your service.
  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com