NEW LABOR LAW CHALLENGES: OVERVIEW OF THE NEW YEAR'S CHANGES
Hungary experienced a significant transformation in its labor laws in 2023, introducing groundbreaking changes such as the newly introduced parental leave, extended paternity leave, and revisions to onboarding information disclosure requirements. As we enter 2024, the alterations may be less dramatic, but there are crucial aspects that employers and employees should note. Therefore, this article will provide a summary of the following topics:
- Allocation of Extra Vacation Time for Parents;
- Simplification of Administrative Obligations in Case of Termination;
- Compulsory Medical Aptitude Test to be Abolished;
- Simplification of Document Retention; and,
- Investigating Occupational Accidents.
Empowering Parents: Allocation of Extra Vacation Time
The most significant change revolves around allocating paid annual leave for parents. Section 122(4a) of Act I of 2012 on the Labor Code (hereinafter: “Labor Code”) now grants parents greater control in scheduling their extra vacation time.
Specific guidelines for children under sixteen (16) provide parents with extra vacation time ranging from two (2) to seven (7) working days based on the number of respective children:
a) two (2) working days for one (1) child;
b) four (4) working days for two (2) children;
c) seven (7) working days for more than two (2) children.
For children with disabilities, this extra vacation time is increased by two (2) working days per disabled child.
Starting January 1, 2024, parents will have the authority to allocate their extra vacation time, though limited to the above option related directly to their children. A 15-day notice period is required for scheduling, and short-notice requests may be subject to employer refusal without justification.
Administrative Simplicity in Termination
Employers find significant relief by simplifying administrative duties related to employee termination. Previously required to issue various certifications, employers will now issue a single document according to Section 36/A of Act IV of 1991 on Job Assistance and Unemployment Benefits. This electronic or paper-based certificate consolidates all essential information, enhancing the efficiency of the termination process.
The End of Mandatory Medical Aptitude Tests
Act CIX of 2023 on the Amendment of Certain Acts in Relation to Increasing the Competitiveness of Domestic Economic Players and the Efficiency of Public Administration (hereinafter: the “Amending Act”) introduces a groundbreaking change set to take effect on September 1, 2024 – the removal of mandatory medical aptitude tests for job fitness. While employers retain the discretion to request medical examinations for any position, the overall obligation is removed, aiming to reduce administrative burdens.
Employers will still be responsible for ensuring that employees meet specific physiological and health criteria. However, they will be entitled to determine the necessity of medical aptitude tests unless stipulated otherwise by law. A ministerial decree, anticipated in early 2024, will outline positions where medical examinations remain mandatory.
Although the generally mandatory medical examination will be abolished, employers will remain liable for work-related accidents or deterioration in an employee’s health. Under new rules, employees can still only be employed for work that:
a) they have the appropriate physiological capabilities to perform;
b) has no detrimental effect on their health and physical integrity;
c) poses no threat to the employee's ability to reproduce; and,
d) represents no danger to the health or physical integrity of others.
Document Retention Simplification
The Amending Act introduces a favorable modification by easing the document retention requirements related to pension entitlements. Employers were previously required to keep many employment-related documents for up to five (5) years after an employee reaches retirement age. However, starting in 2025, this obligation will be discontinued, although documents generated until December 31, 2024, must still be retained.
Enhanced Focus on Occupational Accident Investigations
While many changes aim to reduce administrative burdens, Act CXVIII of 2023, on the Amendment of Act XCIII of 1993, introduces a new obligation on employers concerning investigating and documenting occupational accidents. Starting from January 1, 2024, this obligation applies to all accidents, regardless of whether they result in the employee being unfit for work, emphasizing a renewed commitment to ensuring workplace safety.
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In conclusion, the start of 2024 might not bring sweeping changes. Still, the subtle modifications in Hungarian labor laws indicate an ongoing commitment to balancing the interests of both employers and employees.
