Changes to Labor Code Effective as of January 1, 2019

New Legislation Enacted

Several changes to the Labor Code take effect January 1, 2019. First, working hours’ timeframe (a timeframe within which the daily working hours can be allocated unequally) can be increased from one to three years by a collective bargaining agreement (CBA) concluded with a trade union. Also, employers with a CBA may order 300 hours of overtime (OT) work yearly (increased from 250). Further, through a separate agreement between the employer and employee, the employer can order 150 (or respectively 100) hours of OT work (up to a total of 400 OT working hours) annually. The said agreement can be terminated by the employee only by the end of the calendar year.

Increase of Statutory Minimum Wage

New Order or Decree

Through a new government decree, the statutory minimum wage increased by 8%. Accordingly, as of January 1, 2019, the statutory minimum wage for unskilled employees is HUF 149.000 (approximately EUR 465) and HUF 195.500 (approximately EUR 610) for employees with at least secondary school.

Invalid Penalty Stipulation in Non-Compete Agreement

Precedential Decision by Judiciary or Regulatory Agency

According to the Supreme Court, the penalty stipulation of a non-compete agreement is invalid if the penalty is stipulated for a breach of obligation of the former employee to report to his former employer about his current employment on a monthly basis during the non-compete period if the current employer is not a competitor of the former employer and the breach is only the failure of such reporting.