Smart Ways To Increase Employee Wages In Hungary

Author:Mr Peter Gritta
Profession:SMARTLEGAL Schmidt&Partners

Remuneration is one of the cornerstones of an employment relationship for both parties. It is not a new practice that employers seek other ways to increase the consideration of workers without modifying the base wage. The so-called "semi-official" solutions can be dangerous for the employer, because an employment ending badly can easily be the beginning of a labour dispute. In our article, we will show you smart salary solutions compliant with the Hungarian labour law.

Base wage from the employer's perspective

As the name implies, the base wage is the starting point of the wage paid. It is a mandatory element of the employment contract and it must be paid in the form of money. For employers, however, raising the base wage may be unfavourable in many ways:

May not be amended unilaterally According to the Labour Code (LC.), the terms of the employment contract, so as the base wage, can only be modified bilaterally by mutual agreement. This can be a problem for the employer if they want to raise the employee's salary only temporarily (for example, for the performance of surplus tasks), as they cannot later unilaterally reset the previous wage.

Wage supplements also increase Another important role of the base wage that it serves as a basis for the calculation of most wage supplements, such as overtime, shift premium, night work, work on holidays. Furthermore, the absentee fee paid for the period of sick leave or holiday is also calculated considering the base wage. Hence, raising the base wage also increases the amount of wage supplement to be paid, so consider the above before announcing a nice-sounding raise.

What are the other options?

All other benefits (bonus, cafeteria, public transport pass) provided in addition to the base salary and wage supplements are considered as fringe benefits. Despite the fact that the LC. does not expressly regulate these, as an employer, you cannot apply benefits as you like.

Principle rule:

In respect of the remuneration of work, the principle of equal treatment must be strictly considered. According to the LC., 'wage' shall mean any remuneration provided directly or indirectly in cash or in kind, based on the employment relationship.

Equal treatment does not mean that all employees shall be provided with the same benefits. For example, a distinction can be made between employees in different groups or departments. In contrast, you cannot treat workers differently based on their "protected...

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