IMPACT – MEDIUM

What is the change? New rules designed to better track employees posted to work in Hungary took effect this month.

What does the change mean? As of Sept. 1, EEA companies or their proxies must complete an online registration process and provide the names of employees who are transferred to work in Hungary. The change was made to keep Hungary compliant with a European Union directive on posted workers, but questions remain about how the changes will be implemented and enforced.

  • Implementation time frame:The regulations took force Sept. 1. BAL and its network partner in Hungary are awaiting further instructions on how they will be implemented.
  • Who is affected:EEA companies posting workers to Hungary and the Hungarian companies hosting posted workers.
  • Business impact: The change adds to the administrative requirements of posting a worker to Hungary and hosting a posted worker there. EEA companies or their proxies can begin the registration process on this website and may continue to use the site to notify the government when posting workers to Hungary.
  • Next steps: Hungary will soon implement new rules on intra-company transfers as well. BAL continues to follow the matter and will alert clients when additional information becomes available.

Background: The regulation was adopted in July to keep Hungary in compliance with an EU directive. Affected companies must register online and, after completing registration, notify the Hungarian government of any EEA-based employees who are transferred to Hungary. Employers may use third parties to complete the registration and notification processes and will not be required to provide any company documents when submitting the names of employees posted to Hungary. Authorities stress, however, that legal entities not have more than one username and password. EEA employers should also note that the online reporting process does not replace any previously existing immigration or labor reporting requirements.

BAL Analysis: EEA companies and Hungarian host companies should take note of the change. BAL, through its network partner in Hungary, continues to seek clarification on how the new regulations should be interpreted and how they will be enforced. In particular, the regulations place the burden of online registration on EEA companies posting employees to Hungary, but indicate that enforcement checks and sanctions, if warranted, will be imposed against the Hungarian host companies. Until further clarification is provided, both EEA sending companies and Hungarian host companies should be prepared to follow the regulations as written, coordinate with each other and contact BAL with any questions about what procedures should be followed when workers are posted to Hungary.

This alert has been provided by the BAL Global Practice group and our network provider located in Hungary. For additional information, please contact your BAL attorney.

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