Hungary’s booming economy as a middle-eastern European country has made it a top location for offshore companies to establish their businesses. Aside from the flourishing automobile industry in this country, it is also a great opportunity for many businesses to set up shop as a foreign company.
The country boasts an impressive employment rate of 74.4% in 2022, as per Statista. Companies can take advantage of the skilled and talented workforce to expand their company reach and profits. However, you need to comply with labor laws to hire and conduct employee background checks to build an ideal work environment.
Read this article to get a comprehensive idea of the process of employee screening in Hungary.
What Is Employment Background Verification?
Employment background verification is a step in the hiring process where an employer confirms the accuracy of a job candidate’s employment history, educational qualifications, and other details. It ensures that the potential candidate is trustworthy and capable of fulfilling the job requirements. A pre-employment background check in Hungary is overseen by government-specified labor laws.
Benefits of Background Checks in Hungary
Some benefits of running an employee screening in Hungary are as follows:-
- Screening out unqualified candidates: Employee background screening in Hungary helps identify candidates who do not meet the job’s qualifications or requirements. It highlights candidates with criminal records or forged educational credentials, if any.
- Making the workplace safer: An employment background check in Hungary can help identify candidates with a criminal record, aggressive behavior, or other behaviors that may endanger other employees or the workplace.
- Protecting the company’s reputation: Hiring unsuitable candidates can harm a company’s brand name and reputation. Conducting a thorough employment background check in Hungary can help protect the company’s image and credibility.
- Enhancing employee retention: Employers can enhance employee satisfaction, promote a positive work environment and reduce turnover by conducting background checks.
- Saving time and money: Employee screening in Hungary can help employers save time and money in the long run. It reduces hiring, training and the potential costs of legal action and damages caused by negligent hiring practices.
Are Background Checks Legal in Hungary?
The DPA (Data Protection and Freedom of Information Agency) issued a comprehensive guidance on employee background screening in Hungary on the 23rd of August, 2016. As per the Hungary background check law, employers can run background checks on their employees, including the following:-
- Criminal background checks
- Contact requests from previous employers
- Looking on the internet and social media to learn about candidates
As per the labor code, employers can ask for information and run a background check only after having written consent from the candidate. This ensures that it does not violate the employee’s privacy. Employers must get prior permission from the candidate and also explain the scope and the purpose of the pre-employment background check in Hungary. The information gathered must be relevant to the job and comply with data protection regulations.
Employers must also ensure that there is no discrimination based on gender, age, ethnicity, or religion during background checks in Hungary. Failing to follow these regulations can lead to legal consequences and make you incur hefty fines.
Things to Know When Performing a Background Check in Hungary
Before delving into the specifics of business development in a foreign country, you need to consider its primary aspect: employees.
To hire a strong workforce, a background check is necessary so you can assess their suitability. Some crucial things to keep in mind while running an HR background check in Hungary are as follows:-
Employment history
Employment history is frequently used as part of background checks in Hungary for applicants. Employers typically look into an applicant’s work history to confirm the accuracy of their resume or job application information.
During this process, the employer can:-
- Contact the applicant’s previous employers to confirm job title, employment dates, job responsibilities, and reason for resigning.
- Request the applicant for references from their ex-colleagues or supervisors to know more about their work performance in the previous company.
Education history
Verification of education history during an employee screening in Hungary entails verifying the authenticity of the individual’s educational documents related to the job posts. It includes:
- Contacting the educational institution to confirm academic achievements.
- Check if the educational institution has taken any disciplinary actions against the candidate.
Criminal record
A criminal record verification is a standard part of the employment background check in Hungary for job applicants. It ensures candidates do not have any convictions affecting the company or its employees negatively. The check may involve reviewing local, federal or state criminal records.
The scope of the criminal background verification may depend on the position and industry. Positions that require handling sensitive information, vulnerable populations, or working in law enforcement or security may require thorough criminal background verifications.
Credit report
Employers are legally prohibited from conducting credit checks on job applicants during background checks in Hungary unless the job position is related to financial activities or requires handling large sums of money.
Hence, before conducting a credit report check, informing the job applicant of this and having their consent is a basic protocol for employers.
Social life
As per the labor code, employers are not allowed to conduct social media checks on job applicants as part of background checks in Hungary. Employers are legally permitted to collect only necessary and relevant information about the employment relationship. They should ensure they do not violate the applicant’s privacy rights or dignity.
Information Essential for a Background Check in Hungary
An employee background screening in Hungary might need the following information:-
- Personal information: The applicant’s full name, date of birth, and address.
- Employment history: Information about the individual’s previous employers, job titles, and dates of employment
- Educational qualifications: This includes the individual’s academic credentials and relevant certifications.
- Criminal records: The criminal history includes convictions, arrests, and sentencing. The Hungarian Criminal Records Office offers criminal records.
- Credit history: Credit reports and financial information
- Verification of health: To assess whether the candidate’s medical history is suitable for the job position
- Verification of references: To check the candidate’s work ethic, character, and other pertinent information.
Certain information in Hungary can be classified under data protection laws and accessed only if the applicant consents. Any employment background check in Hungary should comply with local data protection regulations.
Process Involved in Background Checks in Hungary
Background checks in Hungary typically involve several steps, which are as follows:-
Informing the applicant/candidate
- The first step of employee background screening in Hungary is notifying the candidates.
- You must also obtain permission from the applicant before proceeding.
- Before commencing the background check process, write down your intentions and give each applicant a copy via email or in person. Request each applicant to sign a background check notification form. Maintain a copy of each applicant’s written permission in your files.
Learn about the State laws
- Hungary has its own rules regarding background checks. In general, background checks are only legally permitted with the applicant’s consent or meeting certain conditions.
- Ensure you brush up on the background check requirements and procedures in Hungary before conducting them on individuals.
Conduct the background checking process
Once you have received consent and all the above has been accounted for, proceed with the background checking process. This includes the following:-
- Personal information
- Employment history
- Education and qualifications
- Criminal records
- Credit history
Review the reports:
- After the background screening, evaluate the applicant’s results and make an informed decision. If the candidate fails in the verification process, take the following steps:-
- Notify the candidate of the negative outcome
- Inform them of the reason for not hiring them
- Allow the applicant to challenge the information and explain
If a candidate qualifies for the screening process, extend the job offer and proceed with onboarding.
Industries and Situations That are Most Suitable for Background Checks in Hungary
Employers use background checks in Hungary to verify potential employees’ identity, criminal history, education, and employment history. They are commonly used in the following industries and situations:-
- Financial services
- Educational institutions
- Healthcare providers
- Government agencies
- Restaurant services
- Retail business
How Multiplier Helps With Background Checks
Multiplier is a one-stop destination to solve any problems that lay in your wake while establishing a business abroad. With in-house experts, we partner with reliable third parties to conduct a background check. We also help companies develop a benefits package that adheres to local regulations pertaining to tax and labor, employee benefits, and more.