Azernews.Az

By Alimat Aliyeva

The Hungarian government has unveiled a draft amendment to its labor legislation, aiming to create a more structured and investment-friendly framework for the employment of foreign workers. The proposed changes come as part of a broader strategy to attract foreign direct investment while maintaining control over the domestic labor market, Azernews reports.

According to the published proposal, foreign workers may be employed in Hungary for up to one year during the pre-investment phase, subject to prior approval of group employment. This means that employers will need to secure authorization before bringing in foreign labor — a move designed to align workforce planning more closely with project timelines and investment cycles.

In cases where the investment requires a longer setup period, foreign nationals may be granted a temporary residence permit for work purposes valid until the investment becomes operational — but not exceeding three years. This system is intended to balance the flexibility needed by investors with the protection of local labor interests.

To avoid displacing Hungarian workers, the government is introducing safeguards. Notably, the number of foreign workers allowed under this scheme will count toward Hungary’s national quota, which currently caps foreign labor at 35,000 people employed simultaneously.

One notable innovation in the proposal is the introduction of a “National Card” for cross-border workers, dubbed "pendulum workers" — individuals from third countries neighboring Hungary (e.g., Ukraine or Serbia) who reside permanently outside Hungary but commute regularly for work. This card will facilitate legal cross-border employment while ensuring traceability and labor rights.

To qualify for hiring foreign workers under the new rules, employers must meet strict requirements: they must have no outstanding tax or social security debts, must not be undergoing liquidation, and must employ at least five Hungarian or EU citizens full-time for a minimum of six months.

Analysts suggest that this legislation could help Hungary fill labor shortages in strategic sectors, such as construction and manufacturing, while ensuring that the influx of foreign labor is temporary and investment-driven rather than open-ended. However, the proposal also reflects growing domestic concerns over immigration and labor market competition, which remain sensitive political issues across Central Europe.

If approved, the reform could serve as a model for other EU countries seeking to manage foreign labor more effectively amid demographic decline and labor shortfalls.