Hungary and the new 2023 regulation on guest workers

The Hungarian parliament has recently passed a groundbreaking law focused on employment, opening up opportunities for recruitment of non-EU candidates in Budapest. This article provides insights into the key aspects of the law and its potential implications for employers and candidates alike.

On 13th of June 2023, in a significant and unexpected development, the Hungarian parliament has approved a new law aimed at establishing a distinct employment category for guest workers. This legislative measure, with 135 votes in favor, 47 against, and 10 abstentions, allows laborers from countries outside the European Economic Area to reside in Budapest for extended periods exceeding 90 days. To qualify, candidates must possess valid travel documents, suitable accommodation, sufficient financial means to cover living expenses, and comply with security requirements.

Under the new law, guest workers can stay in Hungary for up to two years, and they also have the opportunity for a one-year extension. Furthermore, at the end of the initial three-year period, they can resubmit their applications to continue their stay in the country. Notably, the government is empowered by this law to establish detailed regulations concerning guest workers, including annual thresholds and a designated list of eligible countries from which candidates may originate.

This legislative move by the Hungarian parliament is poised to have far-reaching implications for recruitment practices in Budapest. Employers will now have access to a broader pool of talent, enabling them to explore candidates from non-EU countries who can contribute their skills and expertise to the local workforce. This will enhance diversity and bring new perspectives to the Hungarian job market.

Hungarian Innovation strategy

In a separate parliamentary decision, the approval of the Neumann János Programme, a national innovation strategy, was announced. This initiative aims to foster collaboration between universities, research institutes, and the economy, propelling Hungary's knowledge-based economy forward. The comprehensive package of measures included in the program emphasizes the development of existing institutions and the launch of new programs.

In order to enhance Hungarian presence in the international research panorama, the Neumann János Programme will facilitate the integration of Hungarian research into global networks. It also seeks to promote innovative ideas in foreign markets. Investments in key areas such as healthy lifestyles, the green transition, digitalization, and security will be prioritized. Additionally, researchers will benefit from predictable career models, ensuring their professional growth and stability.

The Neumann János Programme will further stimulate cooperation between universities and businesses through the establishment of scientific and innovation parks. These collaborative environments will foster synergy and knowledge exchange, driving technological advancements and economic growth. The program also focuses on extending innovation support to communities in the Carpathian Basin, promoting regional development and inclusivity.

As part of the strategy, the Eötvös Loránd Research Network will be renamed the Hungarian Research Network, reinforcing its international recognition and contributing to Hungary's reputation as a hub of research and innovation.

A new scenario: more restrictive or more liberal?

In conclusion, the Hungarian parliament's approval of the new employment law opens up exciting opportunities for recruitment in Budapest, allowing employers to consider non-EU candidates. Simultaneously, the Neumann János Programme's endorsement underscores Hungary's commitment to fostering innovation, research, and collaboration between academia and industry. These developments signal a positive direction for Hungary's employment landscape and its position in the global knowledge economy.

What does this mean for the labor market and recruitment?

Once a clear frame regulation is provided by the Hungarian Government, it will become more clear the impact of this new law on new guest workers. Most probably, the biggest impact will be exactly given by the fact that Hungary is acknowledging the biggest troubles, the limitations to new FDI (foreign direct investments) and other dangers related to the labor shortage and wants to try to create a better footprint and control framework before the situation might be eased, liberalised but still kept under control and quotas.

From recent data we can definitely see that the manufacturing, Hospitality and Services industries might be on the edge of a market saturation and this new regulation could be exactly an answer to this potential headwind.