Section 50 (1) of Act CXCV of 2011 on Public Finances (Public Finances Act) stipulates that budgetary subsidies may be granted to Hungarian entities that – among other things – meet the requirements of lawful employment conditions. From 11 March 2021, Government Decree 115/2021 (III.10) on the activities of the employment supervisory authority (hereinafter: Government Decree) sets forth the detailed rules for the requirements of lawful employment conditions.
Which infringements violate the requirements of lawful employment conditions?
For the purposes of the Public Finances Act, the requirements of lawful employment conditions are not complied with if the employer was fined
a) by the Hungarian tax authority or the employment supervisory authority for failing to meet the data reporting obligation regarding the establishment of an employment relationship as defined in the Act on Rules of Taxation or the Act on Simplified Employment,
b) by the employment supervisory authority
- for infringing the provisions regarding age for establishing an employment relationship and the prohibition of child labour,
- for infringing the provisions on salaries and wages pursuant to the Act on Employment,
- for violating the rules on recording temporary employment activities, or
c) by the authority supervising the implementation of the equal treatment requirement under the Act on Equal Treatment and the Promotion of Equal Opportunities for violating the requirement of equal treatment
in a final, enforceable and published public administration decision (upon the first legal infringement too) – included in a final decision of the court in the case of a public administration action – within two years of claiming the budgetary subsidy.
Furthermore, the requirement of lawful employment conditions is not met if the employer was fined as a result of employing citizens from third countries without a work permit or a combined permit issued during a permit procedure conducted to facilitate gainful employment pursuant to the Act on the Admission and Right of Residence of Third-Country Nationals in Hungary, in a final, enforceable and published public administration decision (upon the first legal infringement too) – included in a final decision of the court in the case of a public administration action – within two years of claiming the budgetary subsidy.
What documents can verify compliance with the requirements of lawful employment conditions?
As a rule, the following documents facilitate confirmation that lawful employment conditions have been fulfilled:
A document containing data published from the registers of
- the Hungarian tax authority,
- the employment supervisory authority,
- the authority supervising the implementation of the equal treatment requirement.
Request for deletion of data published based on the official register kept by the employment supervisory authority
For decisions falling within the general competence of the employment supervisory authority, with the exception of labour fines levied because of employing citizens from third countries without a work permit, the Government Decree allows employers to request the deletion of its data published in connection with an infringement decision once per calendar year, before the expiry of the two-year publication deadline, provided that
- it submits a deletion request to the employment supervisory authority,
- it pays the amount specified in the Government Decree, which is three times the amount of the fine pertaining to the deletion request, but at least three times the number of employees affected by the infringement multiplied by the minimum wage;
- the content of the published decision has been enforced voluntarily and completely, and the labour fine paid.
If you have further questions as an employer on whether the lawful employment conditions requirements are fulfilled at your company, or if you need a legal expert to delete your data published with regard to the infringement decision, the lawyers working with WTS Klient Hungary are happy to help the clients of our group.
