Summary of Government Decree No. 105/2020 (IV.10)
Effective from 16th of April, the government office can grant a wage subsidy at the employer’s and the employee’s joint request if the following conditions are jointly met.
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The employee
(i) does not receive any other part-time employment allowance in respect of the employment and
(ii) has been employed by the employer at least from the date of the declaration of the emergency (11th of March) and
(iii) does not serve his or her notice period.
The employer shall
(i) employ the employee on a part time basis in order to prevent redundancies,
(ii) demonstrate in its request the economic circumstances justifying part time employment, its direct and close link to the emergency and the measures taken so far and those planned to overcome the economic difficulties,
(iii) exhaust all the possibilities of organizing working time available for rescheduling work in connection with the previous point until the request is submitted,
(iv) operate for at least 6 months,
(v) not receive a job creation or job retention support or a support for the employment of employees engaged in research and development activities at the time of submission with respect to the employee,
(vi) the work time frame has expired or has been closed.
Wage subsidy shall be granted only if
(i) the public employment service does not have a final reclaim of allowance against the employee,
(ii) the employer has been certified to meet the conditions of the law on regulated industrial relations,
(iii) there is no liquidation ordered by a final order, the employer is not under liquidation, or bankruptcy proceedings ordered by a final order or no other proceedings for termination specified by law are in progress
(iv) on 31th of December 2019, the employer did not qualify as an undertaking in difficulty within the meaning of European Union competition law
(v) the employer demonstrates that the economic rationale for part-time employment is directly and closely related to the emergency and provides credible evidence that the retention of employees is in the national economic interest in the context of its continuing economic activity.
No wage subsidy is granted in case of employments under Paragraphs 53.§ and 214.§ of the Labour Code, i.e. if the employees are reassigned to jobs and workplaces other than that regulated in the employment contracts, or to another employer. No wage subsidy is granted in case of temporary agencies.
The subsidy is granted for a maximum of three months and paid directly to the employee in arrears. It cannot be paid during unpaid leave. The rate of the subsidy is 70% of the proportional part of the monthly absence fee determined on the date of the declaration of the emergency, less the personal income tax advance and contributions determined in accordance with the general rules, for working time lost by 30%, 40% or 50% respectively.
The maximum amount of the absence fee, including taxes and contributions, which may be taken into account in determining the monthly amount of the subsidy may not exceed twice the mandatory minimum wage less taxes and contributions in force at the time of application.
The employer and the employee shall agree on reduced working hours, individual development time beyond reduced working hours, at least for the duration of the subsidy. Individual development time is development related to the employee\’s job or the activity of the employer, for which the employee is exempted from the obligation to work to the extent of thirty percent of the time lost due to reduced working hours.
In addition to the above, the employee must undertake to work part-time with loss of income when receiving the subsidy. If the employee has a new employment relationship in addition to the one regarding the subsidy it shall not prevent the return to the original working time of his previous employment. The employee shall be available to the employer during individual development.
The employer shall
(i) agree to maintain its statistical headcount during the subsidy and for one additional month thereafter,
(ii) not order extraordinary working hours during the period of support,
(iii) report any changes in the conditions of the subsidy or in the period of reduced working time within 2 business days,
(iv) grant that together with the subsidy, the amount of wage during the period of the allowance reaches the employee\’s absence fee,
(v) agree to pay wages for the individual development period.
The application for support and the agreement between the employee and the employer on reduced working hours and individual development time must be submitted by the employer and the employee together, in electronic form. The application can be submitted from 16th of April during the emergency period and within one month after its termination.
If the application is rejected, there is no right of appeal and the decision cannot be taken to court either. If the employer submits an application with several employees on the same site, the application must be submitted simultaneously.
The subsidy terminates if the employer receives aid for job creation or retention in respect of the worker receiving the aid, or aid for the employment of workers engaged in research and development. This means that it cannot be combined with aid for job creation or retention or aid for the employment of workers in research and development.
There is a separate government decree (No. 103/2020 (IV.10.) for research and development workers. Here the application shall be submitted by the employer only and the employer shall receive the support. The monthly amount may not exceed HUF 318,920 per employee. This maximum amount is applicable to those workers whose gross salary reaches or exceeds HUF 670,000 on the day of the declaration of the emergency (11th of March). In the case of lower gross wages, the amount of support must be proportionate.
dr. Andrea Egertz
attorney at law
Budapest Hungary
andrea.egertz@egertz.hu
Dr. Égertz Andrea ügyvéd 