Hungary plans to drastically reduce quotas for foreign workers: what lies ahead for Ukrainians
19 May 13:47
Hungary’s new government is expected to make a decision next week regarding the future of foreign workers from countries outside the European Union. This is reported by Daily News Hungary, according to "Komersant Ukrainian"
Prime Minister Péter Magyar stated during the election campaign that he did not want to maintain the “assembly-line economy” model characterized by low added value and cheap labor. Instead, the government wants to develop sectors with higher added value and create conditions for Hungarians living abroad to return home.
What the Hungarian government plans
During the election campaign, Magyar’s team stated that starting June 1, it plans to halt the influx of migrant workers and conduct an audit of the current system.
Reuters also reports that Hungary’s new government plans to stop issuing visas to workers from non-EU countries starting next month.
This intention has already raised concerns among businesses and foreign investors, who are warning of potential production issues in labor-intensive sectors.
Why Hungary Wants to Change Its Policy
Péter Magyar stated that Hungary should not remain an economy with a large number of low-wage jobs. His government wants to attract investment into high-tech and more productive sectors, rather than just manufacturing and processing industries.
Under Viktor Orbán’s previous governments, Hungary actively attracted investment from various countries, particularly China and India. A significant portion of these projects created relatively low-paying jobs.
Due to labor shortages, companies began increasingly hiring workers from countries outside the European Economic Area.
How many foreign workers are employed in Hungary
Estimates suggest that the number of foreign migrant workers in Hungary has already reached 120,000–130,000 people. Daily News Hungary reports that they have become essential to certain sectors of the economy, primarily the manufacturing industry, agriculture, livestock farming, the dairy sector, and even certain segments of the healthcare industry.
Reuters notes that foreign workers account for only about 2% of the Hungarian labor market, but in some companies, their share can be critical to daily operations.
Some businesses rely on foreign workers for up to 20% of their operations.
What decision is expected next week
The issue of foreign employment has already been discussed at a meeting of the Hungarian government. According to government spokesperson Anita Kebel, a decision on restricting the employment of non-EU citizens is expected at a Cabinet meeting next week.
Several ministries will be involved in assessing the situation: the Ministries of the Interior, Finance, Agriculture, Social and Family Affairs, Economy and Energy, as well as Justice.
The government’s goal is, on the one hand, to take business needs into account, and on the other, to prevent the formation of an economic model dependent on the mass hiring of foreigners.
Business warns of risks
The government’s plans have caused concern among employers. Reuters reports that business groups and recruitment firms are warning that a sudden ban or reduction in permits for workers from non-EU countries could hurt manufacturing and service sectors.
Sándor Báya, head of Randstad in the Czech Republic, Hungary, and Romania, stated that a complete ban on workers from non-EU countries would not be viable in the long term, as a significant portion of the Hungarian workforce is set to retire in the coming decade.
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What this means for Ukrainians
For Ukrainians, the consequences will depend on the final wording of the decision. Hungary is an EU member, while Ukraine is not, so Ukrainian workers could technically fall into the category of non-EU citizens. If the government does indeed halt or sharply restrict the issuance of permits for such workers, this could complicate legal employment for Ukrainians in Hungary.
At the same time, it is important to note that the government is currently referring primarily to non-EU guest workers—workers from non-EU countries. Final exceptions, transitional rules, conditions for those already employed, and possible special categories are yet to be clarified following the Cabinet’s decision.
Which sectors may be hit hardest
The sectors most likely to be affected by the reduction in foreign labor are those that already face a shortage of workers:
- manufacturing;
- automotive and assembly manufacturing;
- the agricultural sector;
- seasonal work during harvest time;
- livestock and dairy farming;
- logistics;
- certain service jobs.
Daily News Hungary notes separately that workers from India play a significant role in Hungary’s dairy industry, and without foreign labor, some companies may face operational difficulties.
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