Simplified employment

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  • Response to COVID-19
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  • Working time flexibility
Last modified: 01 September, 2020
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Simplified employment


The 'simplified employment' system covers two types of temporary work: casual work (in all sectors) and seasonal work in agriculture and tourism. Seasonal work means that the work can be performed only during a certain part or period of the year, and such seasonality is based on objective reasons and is thus not a question of how the work is organised.

The 'simplified employment' system is prohibited if there is already an employment relationship between the parties. Similarly, an already concluded employment contract cannot be replaced with simplified employment. The employer cannot employ the same worker using simplified employment for over 120 days in a given year.

Generally, any employer (natural or legal person) can make use of the 'simplified employment' system, but if in the public sector, only outside the core activities (for example, a public hospital can employ casual workers as janitors, but not as nurses). 

Employers with HUF 300,000 (approximately €900) or more unpaid and overdue taxes are excluded from simplified employment (SE Art. 11 (6)).

Main characteristics

Set up in 2010 as an improvement to the existing casual employee’s booklet (alkalmi munkavállalói könyv), the 'simplified employment' system aimed at maintaining the flexibility of work while preventing undeclared work. Simplified employment is never compulsory and the parties are free to choose the conventional employment relationship even if the contract is stipulated only for a few days (SE Art. 1 (5)) and a worker can have a simplified employment relationship simultaneously with more than one employer. 

The distinguishing features of the simplified employment system include the fact that a written employment contract is never a requirement. But if the employer wishes, or the employee insists on a written contract, they can use the contract template provided as an appendix to the law. 

Moreover, working time can be scheduled unequally – for example, three hours on one day and five hours on another. Also, working time can be scheduled on Sundays and public holidays according to the wishes of the employer, without having to pay the (otherwise statutory) Sunday wage supplement (the public holiday wage supplement, however, does apply). This way, the simplified employment rules permit flexibility in terms of seasonal and agricultural work, while still protecting employees and preventing undeclared work. 

An important feature of simplified employment is that registered jobseekers do not need to notify the employment services about the simplified employment relationship. This means that they can retain their jobseeker status, without interruption, for the duration of the simplified employment relationship.

In April 2020 a new regulation was adopted that temporarily extended the maximum number of days to 180 within a year and from 15 to 20 days in a month for seasonal agricultural work. The new rules (Regulated by govt decrees 122/2020, Section 5. - Apr 16 and 58/2020, Section 169) are part of the package to support economic recovery from the coronavirus crisis and are in effect until the end of 2020. The Ministry for Agriculture has also set up the website for matching offers of seasonal work with people seeking it.


  • No specific funding required

Involved actors

National government
Legal framework
National Tax Authority: the employer must notify the tax authority about the simplified employment relationship


In 2018 NAV (tax authority) was notified of about 14.7 million simplified employment relationships. This represents a growth compared to the 12.1 million declared employment relationships in 2017.

There is not yet comparable data about 2019 but another type of data (provided by the Ministry of Interior) is available about the average monthly number of persons employed under a simplified contract. In this dataset, every person is counted only once per month, even if they were employed more than once under short-term contracts in a given month.

According to the ministry report, the average number of persons involved in simplified employment rose at a modest rate – 5 percent – in 2019 compared to the previous year. While the average number of agricultural decreased in 2019 – a continuation of a long-term trend – the number of seasonal workers in tourism and the number of casual workers increased – in accordance with the long-term trend, too.





Given the temporary nature of these jobs, simplified employment does not exclude the employee from claiming unemployment benefit, and employees are not even required to inform the employment services about their casual or seasonal work. The instrument could tackle the issue of undeclared work, especially in the agricultural sector.

From the employer’s point of view, simplified employment has the following strengths:

  • The applicable labour law rules are more flexible than the general provisions in the labour code;
  • Administrative costs are reduced, the cost of sick leave can be saved, and working time can be organised with flexibility;
  • The administrative burden is lighter, it is easier for instance to declare the employment to the authorities and not mandatory to issue certificates at the end of the employment relationship;
  • The tax burden is significantly lower than in a typical employment relationship;
  • The tax payable after workers employed within the simplified employment framework is a flat-rate tax (a fixed amount per day per worker, although the concrete amount depends on the type of the simplified contract). This makes the payroll calculations very simple, which eliminates the need for highly trained payroll personnel;
  • The minimum wage is lower in the case of workers employed under a simplified employment contract. For non-qualified employees, the minimum wage is 85% of the generic minimum wage. In the case of qualified workers, the minimum amount is 87% of the ’guaranteed wage minimum’ – which is the official name of the minimum wage for qualified workers with a standard contract.

From the employee’s perspective, the major strengths are the following:

  • Simplified employment is a concrete and attractive alternative to undeclared work;
  • Employees on the peripheries of the labour market can gain employment legally and be eligible for pension and unemployment benefits; 
  • Lower common charges mean a higher net income for the worker;
  • Casual work can lead to permanent contracts with the employer and thus be used as a stepping stone. Moreover, it could be useful for people re-entering the labour market after a prolonged leave or long-term unemployment.


Due to the low common charges, employees in simplified employment are not covered by full social security. They are eligible only for pensions, accident-related health services and unemployment benefits (SE Art. 10). The employment service’s department head observed that employers might use simplified employment to replace fixed-term contracts under the Labour Code and save social security contributions.

The employer faces the following disadvantages:

  • Simplified employment is constrained by strict working time limits (for both casual and seasonal workers), and duration and headcount limits (for casual workers). These limits stipulate for how many days a worker can be employed within a year by an employer, for how many consecutive days a casual worker can be employed, and how many casual workers can be employed simultaneously with one employer.
  • Even if casual and seasonal workers fall under the scope of the labour code, they are not considered as employees in most state tendering procedures. Thus, a company with hundreds of casual workers cannot participate in a tender requiring a high number of employees;
  • The template for the employment contract also has its shortcomings. For instance, it does not contain any reference to a probation period or special rules on responsibility for damages, even though these legal institutions could be used in simplified employment. If parties want to make use of these, they need to supplement the template at their discretion. The problem is that most employers are not familiar with these possibilities and follow the template without considering what other options they might have in formulating the contract. 

From the employees' perspective, the following weaknesses can be identified:

  • Tax rules encourage the employer to keep wages low, around the minimum wage;
  • While working time rules are more flexible, sick leave and other unpaid leave are not guaranteed;
  •  Jobs are temporary, hence with security.


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