Hungarian labor law: Retirement benefits and vacation pay rights

Recent legal insights in Hungary highlight specific protections and benefits for employees regarding retirement and termination.

For public employees preparing for retirement, the concept of ‘walking time’ (sétálóidő) allows for a period of release from duties while maintaining employment status and receiving pay. The duration of this period depends on years of service, ranging from 60 days to a maximum of 8 months for those with 30 years of service. This arrangement also contributes to the employee's total service time, potentially increasing future pension amounts. This also applies to women eligible for preferential retirement under the ‘Nők 40’ program.

Regarding employment termination, legal guidance clarifies that employers cannot force employees to waive their right to compensation for unused vacation days. Under the Labor Code, if an employer has not provided proportional annual leave, they are legally obligated to compensate the employee in cash upon termination. This requirement remains mandatory even in cases of mutual agreement, meaning an employee cannot validly sign away this right to the detriment of their legal entitlements.