A Guide to Employee Background Checks in Hungary
Key takeaways
- Employee background checks in Hungary are guided by GDPR and local data protection laws, overseen by the Hungarian National Authority for Data Protection and Freedom of Information.
- Background checks are prevalent in sectors like finance, banking, education, healthcare, and IT, where integrity and safety are crucial.
- Employers must obtain explicit consent from candidates and ensure checks are relevant to the job requirements to comply with privacy laws. Illegal checks include those infringing on privacy without consent and discriminatory practices.
Employee background checks should be an integral part of your hiring process in Hungary. Although not mandatory, they are a common practice, especially in finance, banking, education, healthcare, and information technology.
Hungary presents a promising talent pool, especially in the digital and ICT sectors, despite scoring slightly below the EU average in digital skills and ICT specialists in the workforce. Efforts are ongoing to bridge this gap and boost digital competencies, which could be advantageous for employers looking to tap into a growing and improving talent market. Initiatives to enhance digital skills and the Hungarian government's commitment to digital transformation show potential for future growth in these areas.
Considering these circumstances, international employers should use background checks to manage risks and make well-informed recruitment decisions. These verifications are crucial for ensuring the reliability of candidate information and determining their suitability for the role.
In this article you’ll learn:
- How to run an effective and legal employment screening in Hungary
- What are the common types of employee checks in Hungary
- Step-by-step process of a thorough employee screening
- What mistakes to avoid when performing a background check in Hungary
What employers should know before running background checks in Hungary
An employee background check is the process of verifying a potential hire’s work history, education, professional qualifications, and any criminal records they might have. It’s particularly beneficial to run before finalizing an employment offer or signing a contract, ensuring the candidate meets the company's standards and requirements.
Hungary, like many countries, has specific regulations and cultural expectations surrounding the practice of employee background checks. The country’s Data Protection Act, aligned with the European Union’s General Data Protection Regulation (GDPR), plays a significant role in defining what is permissible. The Hungarian National Authority for Data Protection and Freedom of Information (NAIH) oversees these practices, ensuring they comply with legal standards.
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GDPR is a legal framework set by the European Union to protect individuals' privacy and personal data. It gives EU citizens more control over their personal information and requires organizations to handle data securely and transparently.
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The Hungarian National Authority for Data Protection and Freedom of Information (NAIH) is tasked with enforcing the rights to personal data protection and freedom of information in Hungary. It promotes the free movement of personal data within the EU and represents Hungary in EU data protection bodies. The NAIH operates independently and is led by a president appointed for a nine-year term. Its responsibilities include supervising data processing operations, except when courts act in their judicial capacity.
Unique cultural or legal considerations in Hungary include the emphasis on consent and the right to privacy. Employers must obtain explicit consent from candidates before conducting background checks and ensure that the information collected is strictly used for employment purposes.
Are background checks legal in Hungary?
Yes, background checks are legal in Hungary, provided they comply with the country's Data Protection Act and GDPR requirements.
Employers must be transparent with candidates about what checks will be performed and for what purpose. Specific regulations or restrictions include the necessity to obtain candidate consent and the limitation on the type of information that can be collected and processed. Although it’s not specified in the law, written consent is recommended for documentation and compliance purposes.
What types of background checks are illegal in Hungary?
Certain types of background checks are considered illegal or restricted in Hungary:
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Checks that infringe on a candidate's privacy without their consent, such as accessing personal social media accounts or conducting checks irrelevant to the job’s requirements
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Discriminatory checks, such as those based on race, gender, religion, or other personal characteristics unrelated to job performance, are prohibited under GDPR and can lead to legal consequences
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Medical checks in the context of employment must be directly relevant to job requirements and comply with privacy laws. Employers need to ensure that such checks are necessary for the specific role and handle any health-related information with heightened confidentiality
Violating data privacy laws during employee background checks in Hungary can lead to significant legal repercussions due to strict adherence to the GDPR and local data protection laws.
Specifically, the GDPR outlines a two-tier fine system for infringements. Less severe violations can result in fines up to €10 million or 2% of the firm's global annual revenue from the previous fiscal year, whichever is higher. More serious infringements, however, can attract fines of up to €20 million or 4% of the firm's worldwide annual revenue from the preceding financial year, again whichever is higher.
In Hungary, the highest GDPR fine to date was imposed on Budapest Bank in February 2022, amounting to approximately EUR 653,000. The fine was for unlawful AI analysis of customer calls, which included assessing speakers' emotional states without proper legal basis or transparency. This case underscores the importance of clear data processing purposes and consent.
Common background check industries in Hungary
Background checks are prevalent across various industries in Hungary, with particular emphasis in sectors where trust, integrity, and safety are paramount.
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Finance and Banking: Background checks are essential to protect client assets and ensure regulatory compliance. This typically involves verifying criminal records (fraud, embezzlement), employment history for financial misconduct, educational qualifications relevant to finance, and potential sanctions list inclusions
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Education: Schools prioritize the safety and well-being of students. Background checks often involve criminal record checks (violence, child abuse), reference checks to assess teaching skills and suitability for working with children, and verification of teaching licenses and educational credentials
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Healthcare: Patient safety is paramount. Background checks for medical professionals often include verification of medical licenses and certifications to ensure they are qualified to practice in Switzerland. Additionally, checks may include disciplinary actions from medical boards and criminal records related to violence or drug offenses
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Information Technology (IT): With the rising threat of cybercrime and data breaches, IT companies rely heavily on background checks. This typically involves verifying criminal records (cybercrime, hacking offenses) to assess potential security risks. Additionally, they may check employment history in IT security roles to confirm relevant experience and skills. In some cases, security clearance checks may be necessary for highly sensitive positions
Types of employee background checks in Hungary
Effective employment screening in Hungary covers essential aspects to evaluate a candidate's abilities. Knowing these areas helps employers tailor screening processes to meet job requirements and legal standards.
| Type of Check | Common in Hungary | Reason |
| Criminal record check | Common | Essential for assessing the candidate's trustworthiness and ensuring compliance with regulatory requirements |
| Employment verification | Common | Validates the candidate's work history and performance, providing insights into their professional experience and conduct |
| Educational qualifications verification | Common | Confirms the authenticity of the candidate's educational qualifications, ensuring that they possess the required academic credentials |
| Credit history check | Common | Common for positions involving financial responsibilities, as it assesses the candidate's financial integrity and reliability |
| Reference check | Common | Offers valuable insights into the candidate's work ethic, interpersonal skills, and suitability for the job position |
| Social media screening | Less common | While social media screening can provide additional insights into a candidate's behavior and professional conduct, its use is less prevalent compared to traditional background checks |
Background check mistakes to avoid in Hungary
Whether you’re hiring employees or contractors in Hungary, there are a few things you shouldn’t do as an employer when it comes to background checks:
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Neglecting candidate consent: In Hungary, GDPR (General Data Protection Regulation) reigns supreme. Forget starting background checks without obtaining the candidate's written and informed consent. This document should clearly explain what information you'll collect, why you need it, and who will have access.
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Privacy pitfalls: GDPR isn't the only hurdle. Hungary's Act CXII of 2011 on data protection adds another layer of complexity. Ensure all checks comply with these regulations. Think data minimization: collect only what's essential for the job, and implement strong data security measures. Remember, you can't hold onto the data forever – retention periods are crucial.
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Irrelevant checks: Background checks should be like a tailored suit – fit for the specific role. A criminal record check might be a must-have for a security guard, but unnecessary for a graphic designer. Focus on information directly relevant to job performance, and avoid generic checks that delve into irrelevant personal details.
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Failing to verify information with reliable sources: Use reliable sources for background checks. Consider partnering with reputable background check companies with established verification processes. Direct communication with previous employers or educational institutions adds another layer of trust. Be cautious of online information – it might be misleading or incomplete.
Step-by-step guide to employee background checks in Hungary
Employers looking to hire in Hungary should follow the list of steps below to ensure legal and effective and thorough employee background checks.
- Obtain written consent: Before initiating any background checks, secure written consent from the candidate, explicitly stating the types of checks to be conducted
- Verify identity and legal work status: Use government-issued documents to confirm the candidate’s identity and their eligibility to work in Hungary
- Verify educational qualifications: Contact educational institutions directly or use verified services to confirm academic credentials
- Check employment History: Verify previous employment details directly with former employers, focusing on positions relevant to the job at hand
- Check criminal record: With consent, request a criminal record check from the Hungarian Ministry of Justice, keeping in mind the relevance to the job
- Check credit history: For positions that involve financial responsibilities, a credit history check may be conducted with the candidate's consent
- Check references: Contact provided references to gather insights into the candidate’s work ethic, skills, and character
- Screen social media: With consent, review public social media profiles for any red flags, ensuring not to infringe on personal privacy
- Check compliance: Ensure all checks comply with Hungarian laws and GDPR, particularly regarding data handling and privacy
- Feedback and decision: Inform the candidate of the findings and move forward with the recruitment process accordingly
You can also automate this process using Deel, and get a fast employee background check, with results coming in a matter of minutes.
Bree Cohen, Vice President of Talent, Power Digital Marketing
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