The Hungary Whistleblower Protection Act

Hungary Whistleblower Protection Law overview

Hungary amended its whistleblower protection laws in May 2023 to transpose the EU Whistleblower Protection Directive’s requirements into national law. The law defines whistleblower protections for anyone reporting violations of either EU law or Hungarian law, and for employees reporting violations of their employer’s code of conduct as well. It imposes several obligations on organizations to protect internal whistleblowers. 

The new legislation covers all public and private organizations with at least 50 employees, requiring them to establish mechanisms to allow for whistleblower reports and to protect whistleblowers. Employers must also appoint someone to investigate whistleblower claims, and this can be an internal manager or an external third party. 

The law protects whistleblowers and those assisting them from retaliation for submitting a report. It also allows them to report their concerns externally to Hungarian law enforcement and regulatory agencies, depending on the exact concern being raised.

What does the Hungarian whistleblower protection law cover?

The law adopts the minimum standards for whistleblower protection outlined in the EU Whistleblower Protection Directive. These requirements include: 

• A secure and confidential channel for receiving whistleblower reports must be in place. 
• Acknowledgment of the receipt of every whistleblowing report must be provided to the whistleblower within seven days. 
• An impartial person or department must be appointed to follow up on the reports. 
• Records must be kept of every report received in compliance with confidentiality requirements. 
• There must be diligent follow-up of the report by the designated person or department. 
• Feedback on the follow-up or investigation must be given to the whistleblower within three months of receiving the report. 
• All processing of personal data must be done in accordance with GDPR.

What are the rules outlined in the Hungarian whistleblower protection law?

Formally known as Act XXV of 2023 (and informally as “the Whistleblower Protection Act”), Hungary’s law covers all public or private organizations with at least 50 employees. Lawmakers enacted the legislation on 25 May 2023, and all covered organizations have until 24 July 2023 to implement its compliance obligations. Those organizations with 50 to 249 employees are allowed to establish a joint whistleblower program in coordination with other small businesses. Financial service firms need to establish an internal reporting system even if they have only one employee. 

The law requires all covered organizations to (1) set up a whistleblowing system with comprehensive whistleblower protections; and (2) adopt a policy on reporting legal violations and other misconduct. Businesses must also train employees on how to use the hotline and on the importance of non-retaliation; and maintain records of the whistleblower complaints they receive. Companies are allowed to outsource the management of their hotline to a third-party service provider.

Anonymous report intake and management

Whistleblowers are allowed to submit reports in writing, verbally, or in person, and the company must preserve a record of every report submitted. If a company receives an anonymous report and that person’s identity later becomes known, they are still eligible for the law’s anti-retaliation protections just like any other whistleblower.

What are the risks of non-compliance?

Companies that violate Hungary’s whistleblower law by failing to implement a whistleblower program can be subject to investigation by the Labor Department. Retaliating against a whistleblower is a misdemeanor crime punishable by fines up to €800.