Rules for bringing in guest workers

Last week, Sándor Czomba, Minister of State for Employment Policy, gave tutorials on the law and the implementing regulation to journalists at a press briefing. Sándor Czomba noted that the basic principle is to try to recruit Hungarians for every vacant position. Only if there is not a sufficient number of suitable candidates will the Hungarian authorities give permission to employ foreigners. The new law on aliens, which came into force on 1 January, was also adopted in this spirit. But Sándor Czomba also added that they do not want to be too bureaucratic either, because if there are too many bureaucratic obstacles, guest workers will not come and factories will not be able to produce. "Hungarian labour needs to be protected, but labour shortages should not be a barrier to growth."

Hungary sets a quota for guest workers from abroad. A total of 62,000 could have come, but the number of permits issued fell short of 40,000. This year, 65,000 are expected to come from third countries, but the secretary of state says it is unlikely that many will arrive. Ukrainian and Serbian guest workers are not counted in the quota, nor are seasonal workers arriving for six months and those coming for investment purposes.

The EU is not expecting to see any increase in the number of foreign workers.

Before we get to the details, here's a regional comparison. About 120,000 foreign workers are currently employed in the Hungarian job market, 2.6 percent of the total workforce.The share of workers from third countries is 10 percent in the Czech Republic, 6 percent in Poland and 3.8 percent in Slovakia.

Third-country workers, colloquially known as guest workers, can be imported in four broad categories: as seasonal workers, for investment (e.g. for building a factory), with a residence permit for employment purposes and with a residence permit for guest workers.

Misconception spreads about 300 restrictions

In contrast, there is no occupational prohibition or country list for a residence permit for employment purposes. The government could have done so, but did not exercise this option. It is true that the procedure for obtaining a permit is slower here, as a labour market test is required before the permit can be granted. (The news that was carried in the Hungarian press last Friday that "300 professions are not allowed to employ guest workers" is not true. Not with a guest worker residence permit, but for employment purposes. The latter is also colloquially understood as guest worker.

The 65,000 annual quota includes only those from the four groups above, those with an employment permit and those with a guest worker residence permit.

Step by step

If an enterprise or a qualified temporary work agency wants to bring guest workers to Hungary, it must register its request - how many, for what kind of work, with what qualifications - with the district government office responsible for the place of business. The state office will contact the neighbouring districts. You have 7 days for a temporary work permit application and 15 days for an employment purpose application to refer Hungarian jobseekers suitable for work.You can organise a group information session at which the employer can recruit. If there is not a sufficient number of Hungarians, the employer will be given a green light on how many guest workers he can bring into the country. The employer can only reject those referred by the state agency with a proper justification. In the absence of a justification, no permission to recruit abroad will be granted.

Residence permits for guest workers are valid for two years, renewable for 1 year (for investment purposes, up to a maximum of 3 years). The competent authority will decide on the application within 60 days. No possibility of settlement or family reunification. The employer is obliged to ensure that the guest worker holding a residence permit for guest workers leaves the territory of Hungary no later than on the sixth day following the termination of the employment relationship in the event of termination or cessation of the employment relationship. If the employer does not comply with this obligation, the aliens' registration authority shall impose a fine of HUF 5 million on the employer.

Registration and employment fees: the amounts are fixed

Preferential employers and qualified lenders will have to pay a registration fee of HUF 5 million. In addition, they are subject to an employment fee.The amount of this fee is the number of guest worker residence permits issued in the previous year multiplied by HUF 60 000. So if a company brings 100 guest workers to Hungary in 2023, it will have to pay HUF 6 million. These two items will otherwise make the employment of foreigners marginally more expensive.

The registration fee will be paid into the National Employment Fund. Two thirds of the employment fee goes to the National Employment Fund and one third to the Government Office of Budapest.

Tightening of the renting companies

Certified temporary employment agencies have already played a major role in the recruitment of guest workers, and recruiting foreigners is a good business opportunity for them. Currently, 28 such HR service providers are authorised to bring in guest workers on an expedited basis through a consolidated procedure. The government has tightened up their scope. It has raised the minimum statistical number of temporary staff from 500 to 1,000, of which 500 must be Hungarian workers. The minimum must be met from 1 July 2023 to 30 June 2024. And to stay in the qualified lender category, 30 percent of new recruits must be Hungarian, so 600 Hungarians out of a 2,000-strong increase in staff. To make things easier, Ukrainian and Serbian workers can be counted as Hungarians. It is conceivable that the tightening will reduce the number of 28 qualified lenders to around 15. The government hopes this new regulation will clear the market.

Eating the pudding is the test

How the new regulation works in practice will become clear in the coming months. Although the new Aliens Act came into force on 1 January, it was not possible to submit a new application for residence and work until 29 February. In addition, market players were waiting for the implementing regulation published on 29 February.

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