Introduction 

For businesses expanding into new markets, understanding the local employment landscape is not a nice-to-have - it’s a legal and operational necessity. Hungary and the United States are two countries often viewed through very different lenses when it comes to labour law. One is part of the European Union with more protective frameworks for employees, while the other is known for its flexibility and employer discretion.

Getting this wrong can lead to misclassification, reputational damage, or costly legal claims. Whether you're hiring your first employee in Budapest or scaling a US workforce, knowing the core differences between these jurisdictions is critical to avoiding compliance pitfalls and building a healthy, legal employment model.

Quick Tips

• Hungary requires written employment contracts - in the US, verbal agreements may still be valid (but rarely advised).

• Termination in Hungary must be justified and often includes severance - US employment is generally 'at-will'.

• Overtime, rest breaks, and leave entitlements are strictly regulated in Hungary - they vary by state in the US.

• Collective bargaining and works councils are more common in Hungary - especially in larger firms.

• Employee data handling must comply with GDPR in Hungary - the US has no federal equivalent.

Employment Contracts: Clarity vs Flexibility 

Hungary’s Labour Code mandates a written employment contract detailing role, salary, and key terms. It must be given to employees on or before the first day of work. In contrast, while many US employers provide written agreements or offer letters, it is not a legal requirement at the federal level, and in many states, employment is ‘at-will’ - meaning it can be ended by either party without cause.

This distinction matters. In Hungary, a vague contract or informal arrangement can expose employers to legal disputes or inspections. In the US, relying solely on ‘at-will’ clauses without clear expectations can damage retention and morale.

Termination: Procedural Protections vs Discretion 

In Hungary, termination must be justified with clear, documented reasons such as business closure, redundancy, or performance. Notice periods and severance are typically required, depending on tenure. The process must follow strict legal procedures.

In the US, most states follow the at-will doctrine, allowing terminations without notice or reason - unless discrimination or retaliation is involved. However, at-will status doesn’t mean unlimited freedom. Employers must still be cautious about wrongful termination claims and follow their internal policies.

I’ve seen clients run into trouble assuming that EU-style terminations can be mirrored in the US, or that US informality applies in Hungary. Neither is true. Respect the legal culture of each jurisdiction.

Working Time and Leave: Regulated vs Fragmented 

Hungarian law sets a 40-hour workweek, with clear rules on rest periods, overtime pay, and annual leave (a minimum of 20 days, increasing with age). It’s also common for employees to receive extra leave for children, study, or long service.

The US, however, has no federal requirement for paid annual leave. Employers can choose what to offer, and public holidays vary by state. Overtime kicks in after 40 hours per week under the Fair Labor Standards Act (FLSA), but rules differ for exempt and non-exempt employees.

This is where businesses need tailored policies. I once worked with a UK firm entering both Hungary and the US in the same year. They tried to use one global leave policy - it failed. We revised it country-by-country to reflect statutory minimums and cultural expectations, and saw better engagement and fewer compliance issues as a result.

A Real Example: Avoiding Costly Missteps 

A tech company expanding into Hungary engaged ThinkGlobal HR after receiving a warning from the Hungarian Labour Inspectorate. They had copied their US onboarding process, issuing an offer letter without a compliant contract. We stepped in, created compliant Hungarian employment templates, reviewed local benefits, and set up GDPR-compliant data processes. The warning was closed without fine - but it was a close call.

In contrast, we supported a US-based scale-up to review their flexible working policy after a Hungarian employee challenged unpaid overtime. We helped them adapt shift scheduling practices and retrain managers on EU working time rules. That’s the kind of insight that can’t be Googled - it comes from lived experience.

Final Thoughts 

Hungary and the US operate on fundamentally different models of employment. Navigating these systems requires more than a template or checklist - it takes insight into what’s legally required and what’s culturally expected. Get this right, and you can scale with confidence, avoid unnecessary risk, and create fair, sustainable workplaces across borders.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you’re navigating labour law differences, reviewing global contracts, or building systems for future growth, our team can help you make smart, strategic choices - wherever your workforce is based.