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Most of the measures promoting youth employment are part of the Youth Guarantee (referred hereinafter to as YG) system.
Measures related to the Youth Guarantee Programme
Youth Guarantee Active Labour Market Programme
The backbone of the system is the Youth Guarantee Active Labour Market Programme (EDIOP 5.2.1 and CCHOP 8.2.1). PES (National Employment Service) implementing the guarantee coordinates the system within the framework of this programme, which involves addressing, registration and monitoring of young people and the tasks relating to maintaining contact with the partner organisations involved in the operation of the system. The programme aims at promoting labour market entry of young people below 25 by providing wage subsidies, entrepreneurship support, trainings coupled with labour market services, such as job search assistance or mentoring.
Projects supporting young people to become entrepreneurs
Youth Entrepreneurship Support Programs (Fiatalok vállalkozóvá válását támogató programok)
The GINOP 5.1.9 and 5.2.7 Projects are in progress, and young people interested in applying for capital support may apply from August 2019. The projects have been developed based on the lessons learned from a similar application design recently completed and building on the feedback received from the beneficiaries. As a result, new projects will be implemented along with a higher grant amount, expanding the target age group and developing a simpler and faster online application system.
Internship Programme (Gyakornoki program) In the first half of 2019, a new traineeship training application has been prepared with the aim of reducing the administrative burdens compared to the current one (GINOP 5.2.4) and expand the target group of trainees to young people under the age of 30 without completing their education. The date of the call for proposals was July 2019 and the planned budget of the tender was HUF 10 billion.
The organisations implementing the programme
The organisations implementing the programme are:
- Széchenyi Programme Office (Széchenyi Programiroda Nonprofit Kft.),
- FIVOSZ – Young Entrepreneurs Association Hungary (FIVOSZ),
- the Hungarian Enterprise Development Foundation (Magyar Vállalkozásfejlesztési Alapítvány),
- Budapest Polytechnics Foundation (Közgazdasági Politechnikum Alternatív Gimnázium),
- OFA NKft. (OFA Nonprofit Kft.).
Within the programme, the organisations provide young people a training, where they can obtain the required competencies and knowledge on how to become an entrepreneur, on the operation of a business. They can also receive assistance in preparing a business plan, advice and mentoring (EDIOP 5.2.2, 5.1.9 and 'Start a Business at Home, Youngster!').
Applying for a non-repayable support
Young people who successfully completed the training and have an approved business plan may submit an application for support of up to HUF 3 million (about EUR 9 594) (EDIOP 5.2.3, EDIOP 5.2.7 and CCHOP 8.3.1), in the form of non-repayable support, to launch their business and to supplement the funding of their costs associated with the start of the operation, with 10% own funds. (In the case of the programme EDIOP 5.2.7 own funds are not required.) Support is provided for the establishment of approximately 6 600 new enterprises within the framework of the programme until 2021.
Enabling young people to gain real work experience
The purpose of the third-type programme implemented within the framework of the system is to encourage companies to create traineeship places to enable young people to gain real work experience, through which their employability and long-term labour market opportunities may be improved. Within the framework of the traineeship programme (EDIOP 5.2.4), those micro, small and medium-sized enterprises are eligible for support which undertake to employ young people with vocational qualifications, aged under 25.
The enterprises employ the trainees for 9 months, in full time, with wage subsidy and then continue to employ them for additional 4-and-a-half months at their own cost. This programme will enhance the participation of youths in apprentice training, will help to enhance their professional practical knowledge and work experience and thereby improve their labour market outlook and employability. The SMEs can use the granted support to fund the wages of the apprentices and to finance the additional costs of employment and training of the apprentices (remuneration of mentors, physical conditions required for the apprentice position). The programme will assist at least 4 500 young people in obtaining work experience until 2021.
Traineeship programme – support services
A supplementary programme also assists the successful implementation of the traineeship programme: Traineeship programme – support services (EDIOP 5.2.5). This contributes to the wide dissemination and implementation of the traineeship programme not only through central coordination, but it also covers complex information and professional advisory activities for different target groups (apprentices, mentors, economic organisations). The supplementary programme is implemented on the basis of the Vocational Training Centre under the co-ordination of the Győr Technical Vocational Training Centre.
Direct job-creation schemes
Direct job creation outside the Youth Guarantee Programme is not related strictly to youth employment. The role of the Public Work Scheme has been mentioned: the long-term unemployed must work in the secondary labour market in order to get a (lower than minimum wage) salary and the possibility to get state subsidies. Though the explicit goal of the scheme is to help the workforce get back to the primary labour market, young people are not its target group, mostly because of the possibilities of the YG Programme.
Another state-initiated, but not youth-specific, scheme includes job-creating tenders and subsidies of the Government. Subsidies are provided for employers on the basis of individual agreements between the Government and companies. Between 2011 and 2016 HUF 163.6 billion (about EUR 370 027 812) was paid (fizettek) to large and multinational companies to create jobs. The latest significant tender was announced in July 2017 allocating HUF 10 billion (about EUR 32 803 884) for supporting job-creation of SMEs. (10 milliárd forintos munkahelyteremtő program indul a kkv-knak) Neither of these subsidies are especially targeted for young people. (Cedefop)
Wage and recruitment subsidies aiming at fostering youth employment in the private sector
Besides measures of the YG Programme, the Job Protection Action Plan should be mentioned as state provision. The Action Plan offers 'targeted tax allowances for employers employing disadvantaged target groups, among others young people and career starters under 25'.
Special target groups
In terms of employment measures within the YG Programme NEET young people are of course specially targeted, but instead of focusing on low-skilled and long-term unemployed youth, support depends on individual needs: 'With regard to the heterogeneity of the target group, the content of support is differentiated according to individual needs. The package of measure(s) and service(s) offered to the young person is based on an individual action plan, drawn up by a member of the YG mentor-network in cooperation with the client, comprising the responsibilities of the client as well.' (Hungary’s National Youth Guarantee Implementation Plan, p.6)
Roma youth as a special target group is more present in the strategies and policies related to education. The Framework Strategy for the Policy of Lifelong Learning for 2014-2020 (Az egész életen át tartó tanulás szakpolitikájának keretstratégiája a 2014/2020 közötti időszakra) explicitly addresses better employability of Roma and disabled people.
The other key document regarding employment of Roma people is the National Social Inclusion Strategy (Magyar Nemzeti Felzárkóztatási Stratégia), but reference in it to Roma youth only appears in the context of (vocational) education. (About the National Social Inclusion Strategy see more in Chapter 4.)
National Youth Strategy
Measures aiming flexible security are in connection mainly with reconciliation between work and family – the aim appears in the current action plan of the National Youth Strategy [(Nemzeti Ifjúsági Stratégia) hereinafter referred to as NYS]. It is an important aim that
'mothers with infants could come back gradually to the labour market through part-time employment. A measure included in the Labour Code contributes to this objective. The law states that the employer is obliged to ensure part-time employment for the employee before their child turns three. If an employee raises three or more children, the obligation lasts until the age of five of the youngest child.' (Kisgyermekes munkavállaló után járó járulékkedvezmény)
During this period the employer does not have to pay contributions after the employee. Similar regulation is the introduction of compulsory nursery school and the transformation of the system of crèches in 2017, amongst others, with the introduction of crèches in the workplaces. These measures include financial and moral recognition for 'family-friendly workplaces' in the form of a HUF 2 million (about EUR 6 500) grant which employers can apply for. (51 családbarát munkahely biztosan van hazánkban)
'The main feature of the Code is the loosening of provisions and thereby, the creation of external flexibility for employers. Dismissal protection has been traditionally at a very low level, and sanctions for the unlawful termination of employment have been further limited. The Labour Code emphasises the importance of individual employment contracts and collective agreements by increasing individual and collective autonomy.
[…] Internal flexibility has also been increased. The working time regulation is as flexible as possible within the frame of the EU Working Time Directive, using this rather as a ceiling instead of a minimum level. The regulation provides employers with great flexibility, for example with the possibility of using 300 hours of overtime a year and cutting overtime costs when there is a sudden surge in labour force demand.' (Risak-Kovács, 2017 p. 186-187.)
Within the specific aims of NYS, along with the promotion of starting a family and having children, the priority of reconciliation between work and family also appears. According to this, 'regulations of the labour market that help the reconciliation between family and work life, and create the opportunity of atypical employment for employees with children, especially with young children are needed. Particular attention should be paid to ensure career planning opportunities for women with children.' (NYS)
The action plan of NYS for 2016-2017 [Nemzeti Ifjúsági Stratégia 2016-2017. cselekvési terve] also aims 'to support employment forms that help reconcile work and private life through promoting flexible employment and the reduction of employer contributions for employees with children employed part-time.'
Programmes within the Youth Guarantee system are all ESF co-funded, with the additional national budget funding added. In addition, the budget of the Youth Guarantee Active Labour Market Programme (EDIOP 5.2.1) incorporates the total funding available to Hungary from the Youth Employment Initiative. Until 2020, in total approximately HUF 200 billion (about EUR 6 396 million) is available to finance the guarantee.
The budget estimate for tax redemption related to the Job Protection Action Plan for 2017 was between 143 and 147 billion (about EUR 469 095 542 and EUR 482 217 095). (Törvényjavaslat Magyarország 2017. Évi központi költségvetéséről)
All ESF co-funded programmes under the YG system are monitored closely by the responsible Ministry of Finance (Pénzügyminisztérium) [between 2010 and 2018 Ministry for National Economy (Nemzetgazdasági Minisztérium)] in line with EU requirements. Regular audits are carried out by the Directorate General for Audit of European Fund, the European Commission and the European Court of Auditors.