Hungary
Employment contract (case law)
Impact date: April 2026
The Hungarian Supreme Court has held that a salary increase granted to a managing director was invalid because it had been approved by the company's majority shareholder rather than by the shareholders' meeting, which had exclusive authority over executive remuneration under the company's articles of association. The Court found that the managing director, as the company's sole executive officer, should have been aware of this requirement and could not rely on the assumption that the shareholder had authority to approve the increase.
As a result, the employer was entitled to recover approximately HUF 44 million in additional salary paid over a period of 4.5 years on the basis of the invalid contract amendment.
Employer implications/action needed
Employers should ensure that any changes to the remuneration of managing directors and other executives are approved by the corporate body authorized to make such decisions under the company's articles of association and that the necessary approvals are properly documented.
Employer risk Failure to follow corporate approval requirements may invalidate remuneration arrangements and result in disputes.
Link N/A
Suspension of new guest worker permits
Impact date: 6 June 2026
The government has suspended the issuance of new guest worker residence permits. From 6 June 2026, nationals of countries previously eligible to participate in the guest worker scheme, including the Philippines, Georgia and Armenia, can no longer submit new applications for a guest worker residence permit. The change forms part of a wider government review of the employment of third-country nationals in Hungary.
The suspension applies only to new guest worker permit applications. Individuals who already held a valid guest worker residence permit before the change took effect may continue to live and work in Hungary under the existing rules and may generally apply to extend or renew their permits in accordance with the applicable immigration legislation. Likewise, applications that were already submitted before the change are protected and may continue to be processed, provided the relevant administrative fee was paid by 5 June 2026.
Employer implications/action needed
Employers that rely on foreign labour should review their workforce planning and recruitment strategy. Businesses that previously recruited workers under the guest worker scheme may need to consider alternative immigration routes or broader recruitment channels for future hiring. Employers should also monitor further legislative developments, as the Hungarian government has indicated that a wider review of the rules governing third-country nationals is ongoing.
Employer risk The principal risk is a reduction in the available labour pool, particularly in sectors that have traditionally relied on workers from the Philippines, Georgia or Armenia. While existing workers are not affected, employers may experience recruitment delays, workforce shortages or increased labour costs if alternative sources of labour are needed.
Link N/A
Pay Transparency
Impact date: Awaited
There has been no indication yet of when the Pay Transparency Directive will be transposed in Hungary, however the implementation process has entered its final stage. The Ministry of National Economy has drafted the Hungarian legislation and conducted necessary consultations with key decision-makers and market participants, but the draft has not yet been made public.
Employer implications/action needed
Employers should continue with their pay transparency preparations and continue to monitor the Directive transposition progress in Hungary and across the EU.
Employer risk There is currently no specific legal provision regarding a breach of the principle of equal pay, but the injured party can seek compensation for damages through a Labour Lawsuit.
Link N/A
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