Major changes unveiled: a light in the tunnel for Hungarian workforce?

The Hungarian government has been working towards reducing unemployment rates in Hungary, achieving a historic low with almost 5 million people currently employed in the country. With recent major changes, the government aims to further bolster employment numbers while actively supporting and aiding Hungarians in their work endeavours.

Boosting employment rates

As reported by Index, there’s been a notable increase of one million employed individuals in Hungary compared to the 2010 employment rates. Since the Gyurcsány era, the employed populace has surpassed 4.7 million, resulting in a historic low in the unemployment rate. The government‘s aim is to use the labour reserve to further boost the number of employment. A total of HUF 20 billion (EUR 52.7 million) could be allocated for building 25-30 new workforce housing units in the next four years. This act could have a substantial impact on tackling labour shortages.

Supporting Hungarian workforce

A commitment to prioritising the Hungarian workforce is evident, with foreign workers accommodated in new facilities only when no demand arises from local workers. As we have reported HERE, there are many foreign workers in Hungary. However, there will be stringent requirements on investors to ensure optimal facility utilisation as well as meeting workers’ comfort needs, sustainability standards and environmental criteria. The Ministry of Economic Development stated:

Aligned with the recently enacted immigration laws, the criteria for subsidies dedicated to the construction of worker housing are set to undergo additional tightening. Notably, a new stipulation mandates that a minimum of 50% of the workers’ accommodation must be filled by Hungarian workers.

We have previously reported HERE on the recent changes regarding the immigration law.

Who can be accommodated?

Ensuring efficient workforce accommodation usage is a primary goal, extending opportunities to individuals with fixed-term contracts, traineeships or even those on casual or seasonal contracts. Notably, there is no minimum distance requirement between residence and workplace. Operators of unused workers’ accommodation will face sanctions if occupancy rates fall below a certain level.

Stringent regulations

There are quite a few rules one has to pass in order to join this investment. First of all, the governmental aid for creating workforce housing is only available to companies. The aid is granted in form of regional investment rate. Secondly, the aid will cover at least 30% but maximum 80% of the investment. Investors will be obligated to create workforce housing for a minimum of 80 and a maximum of 200 workers, committing to operate the facility for at least a decade. To further stimulate the area’s employment rate, the investor is obligated to hire at least four local jobseekers.