Important Changes in the Activities of the Labor Inspection Authority

The amendments of Government Decree 115/2021 (III. 10.), which come into effect on March 1st, fundamentally influence the practice and level of labour fines. These changes can directly affect you and your business, so it's important to stay informed and prepared for the new situations!

One prominent change is the significant increase in the minimum fine amount. Previously, the minimum fine for labour violations was 30,000 forints, but this has now been raised to 150,000 forints. Concurrently, the upper limit of fines has also undergone a significant increase, especially concerning small and medium-sized enterprises, where the potential fine amount increases proportionally with the number of employees. Quantitatively, the upper limit of fines has increased to 20-25 million forints from the previous 10 million forints.

The new provisions particularly address unauthorized employment of third-country nationals (those who are not citizens of an EU member state or residing in one of the countries of the European Economic Area) and violations related to cross-border service provision. Employers who employ third-country nationals without permission or commit violations in the area of cross-border service provision should expect significant penalties.

Furthermore, the amendments pay particular attention to reporting obligations concerning the termination of employment relationships of posted workers in Hungary. Failure to report or delayed reporting in such cases can result in severe financial sanctions for employers.

In addition to these, Government Decree 25/2024 (II. 14.), which also comes into effect on March 1st, regarding "the level of labour safety fines and detailed rules for their imposition, as well as the regulations on the registration and training of persons entitled to perform occupational safety activities", introduces important changes as well.

According to the provisions of the decree, the maximum fine amount increases from 10 million forints to 100 million forints. The base amount of the fine is linked to the number of endangered employees, which is 100,000 forints per person; however, this can be increased by three, ten, and twenty times based on the number of norm violations, the duration of the hazard, and potential fatalities. According to the decree, the Authority can further increase the fine amount by 20% within its own competence.

For small and medium-sized enterprises, the fine can reach a maximum of 25 to 50 million forints, except in cases of fatal workplace accidents, where the maximum fine amount is also 100 million forints for them.

Furthermore, the regulation establishes a database where the data of voluntarily registered occupational safety professionals become publicly searchable. The decree also sets out the rules for their training, providing them with the opportunity to participate in voluntary training sessions annually.

Based on the experiences of the past year, it is evident that although the number of inspections has decreased, the rate of violations has significantly increased. According to internal investigations by the labour inspection authority, labour law violations were detected in 71% of employers. Therefore, it is crucial for our businesses to maintain the highest level of compliance with labour laws and to fulfil the necessary administrative tasks in a timely and accurate manner.

If you have any questions regarding the changes in labour law regulations, please contact us, and our expert lawyers will be happy to assist you!