New regulations took effect on 1 August 2011 concerning the entry, residence and employment of third-country nationals in Hungary. PricewaterhouseCoopers has summed up they key changes in its latest Tax & Legal Alert.

Hungary's Economy Ministry has released on its website that the government is planning to consider mergers in the public sector, is determined to achieve significant staff cuts, and keep wage costs at the current level.

Hungary's Constitutional Court has ruled that the retroactive effect of a 98% tax designed to regain severance pay was unconstitutional. The tax was aimed to cover golden handshakes made up to five years before the law came into effect.

Hungary’s Constitutional Court ruled on Tuesday that the government cannot sack civil servants without providing a reason for its action, as legislation drafted by the governing Fidesz party would have had it.

In the first six months of this year, real wages in Hungary were up by 3.7% year on year. Over the same period, consumer prices increased by 5.7%. According to data released by the Central Statistical Office the number of people employed in Hungary in the first half of 2010 was 2 million 671,000.