Hungary’s incoming Tisza-led government is preparing to suspend the admission of new guest workers from 1 June, a move that could significantly reshape the country’s labour market and create major challenges for employers already struggling with labour shortages.
The planned restriction has sparked fierce debate among economists, business leaders and labour market experts, with supporters arguing that foreign workers suppress Hungarian wages, while critics warn that an abrupt halt could threaten investments, production and even existing Hungarian jobs.
According to recent figures cited by Telex, around 125,000 foreign nationals were legally employed in Hungary in 2025, while roughly 90,000 of them came from non-EU countries. The largest groups included workers from the Philippines, Ukraine, China, Vietnam and India.
The issue has become one of the most divisive economic questions facing Hungary’s new government after Tisza’s election victory on 12 April.
Economists divided over foreign workforce
The debate recently came into the spotlight during a discussion on the Hold After Hours programme between economist Viktor Zsiday and Balázs Szabó, who presented sharply opposing views.
Zsiday argued that allowing large numbers of guest workers benefits employers by keeping labour costs low and slowing wage growth for Hungarians. Szabó, meanwhile, argued that developed economies increasingly rely on foreign workers to fill positions locals often refuse to take.
He pointed to Vienna as an example of a city whose maintenance, renovation and services heavily depend on foreign labour.
The discussion reflects a broader dilemma now facing Hungary: should the priority be higher wages for local workers, or ensuring businesses can access enough labour to continue operating and expanding?
Tisza government confirms guest worker suspension
Hungary’s newly appointed Economy and Energy Minister, István Kapitány, has confirmed that the legal framework governing guest workers will be reviewed and that the admission of new foreign workers will be suspended from 1 June.
While the exact duration of the freeze remains unclear, the political message is already resonating with many Hungarian voters, particularly those who believe foreign workers have contributed to wage pressure in sectors such as manufacturing, food delivery and construction.
However, many employers fear that the consequences could be severe.
Recruitment firms and multinational companies argue that Hungary’s labour shortages are structural rather than temporary. They say unemployed Hungarians are often located in the wrong regions or lack the qualifications required for modern manufacturing plants, logistics centres or business service centres.
Companies warn investments could be at risk
According to labour market experts interviewed by Telex, several major investments currently underway in Hungary rely heavily on international recruitment.
Companies connected to projects such as BMW in Debrecen, CATL and BYD in Szeged are reportedly unable to source enough workers solely from the domestic labour pool.
Endre Kovács, business development director at Prohuman Group, warned that if companies cannot hire the foreign workers they need, they may reconsider their Hungarian operations altogether.
He argued that if a multinational company planning to hire 500 employees cannot recruit 100 foreign workers required to fill key positions, the remaining 400 Hungarian jobs could also be endangered.
Business groups further argue that foreign workers are not actually cheaper than Hungarian employees. Recruiting workers from Asia involves travel costs, visa processing, accommodation arrangements, administration and additional support outside working hours.
Many companies, therefore, only turn to guest workers after failing to find sufficient domestic labour.
Foreign workers still represent small share of workforce
Despite the heated political debate, foreign nationals still account for only around 2.6–3% of Hungary’s total workforce — significantly lower than in many Western European countries and even below several regional peers.
The largest non-EU workforce groups currently in Hungary include:
- Philippines: 16,100
- Ukraine: 14,300
- China: 12,300
- Vietnam: 9,600
- India: 5,900
Foreign workers are concentrated mainly in manufacturing, construction, logistics and hospitality, particularly in Budapest, Central Hungary, Hajdú-Bihar County and Csongrád-Csanád County.
Meanwhile, Hungary still recorded nearly 69,000 unfilled job vacancies during the second quarter of 2025, according to the Hungarian Central Statistical Office (KSH).
Labour shortages remain despite rising unemployment
Critics of the upcoming restrictions argue that Hungary’s labour market problems cannot be solved simply by banning new arrivals.
Although unemployment has risen moderately, many unemployed Hungarians have been out of work for extended periods and lack the qualifications required by large industrial employers.
Labour market experts say this mismatch has become increasingly visible as Hungary’s economy shifts towards battery manufacturing, automotive production and high-value business services.
Recruitment agencies also note that guest workers are usually employed on fixed-term contracts and often through certified staffing agencies, making them easier to scale down during economic downturns.
In practice, many companies reduce foreign worker numbers simply by not renewing expiring contracts rather than carrying out large-scale layoffs.
Debate tied to Hungary’s economic competitiveness
The discussion surrounding guest workers has also become closely linked to concerns about Hungary’s long-term competitiveness.
Some economists warn that if wages rise too rapidly without matching productivity growth, Hungarian small and medium-sized enterprises could struggle to compete against larger foreign-backed corporations.
Others argue that restricting foreign labour could place Hungarian companies at a disadvantage compared to rivals in countries such as Germany, Austria, Poland or Serbia, where access to international workers remains more flexible.
What’s next? Hardline message from Hungary’s new Magyar government to guest workers: time to pack up?
