According to the latest data from the Hungarian Central Statistical Office, nearly 100,000 foreign nationals were employed in Hungary as of July 2024, with almost 80% coming from third countries. After years of government-led anti-immigration messaging, many Hungarians have expressed fear and outrage at the sight of large groups of Indian, Filipino, and Vietnamese workers in smaller towns, perceiving them as competition for job opportunities.
To bolster the protection of Hungarian workers and their families, the Ministry of National Economy is considering stricter regulations regarding the employment of guest workers. This initiative aims not only to safeguard Hungarian jobs and the domestic labor market but also to enhance the organization of training programs for job seekers. These efforts will play a vital role in mobilizing the country’s labor reserves and increasing workforce participation.
When a company intends to lease workers from third countries, a guest worker residence permit can only be issued to those whose employer is a qualified temporary work agency and who are nationals of countries listed in a specific government decree. The criteria to become a qualified temporary work agency are stringent; existing agencies must deposit HUF 50 million (EUR 124,500) and maintain an average annual statistical headcount of at least 1,000 employees over the 12 months preceding their application, with at least 500 being Hungarian nationals.
The current list of eligible countries from which nationals can be leased via a temporary work agency includes the Philippines, Indonesia, Kazakhstan, Mongolia, Vietnam, Brazil, Georgia, Kyrgyzstan, Venezuela, and Colombia.
To prevent potential abuses, the new regulation looks to prohibit private intermediaries (placement agencies) from recruiting third-country nationals outside the EU. However, qualified temporary work agencies will still be allowed to employ these workers. According to industry professionals, there are no real elementary changes affecting temporary work agencies in the current draft, although the industry expects the government to re-regulate the leasing of guest workers in a more significant way in the next few years.
By shifting the recruitment responsibility from placement agencies to companies wishing to employ foreign workers, the decree is likely to increase administrative and HR costs. This may encourage businesses to rely more on Hungarian workers for as long as possible.
In addition to protecting Hungarian jobs and the domestic labor market, the decree also aims to enhance the organization of training programs available to job seekers, thus significantly contributing to the mobilization of the country’s labor reserves and boosting workforce participation. The proposal intends to align training offerings more closely with the needs of the economy and labor market. The incentive system may simplify the organization of training programs and expand the range of training available to job seekers, ensuring that it is tailored to their personal circumstances and the demands of the labor market. These new elements will facilitate the selection of appropriate training, and additional support will be introduced to encourage both job seekers and the public sector to participate in training initiatives. These could be useful steps, and similar training courses would be necessary to make better use of Hungary’s labor pool.
By Denes Glavatity, Attorney-at-Law, KCG Partners Law Firm
