Tibor Bors Borbély September 26, 2007 Structure of the HU-PES and ongoing reforms

The beginning, after the changes Before 1989/90 in middle level, mainly departments on local councils were responsible for labour market and VET National level: Central Wage and Labour Office (ÁBMH) / or Ministry of Labour were responsible for employment –1987 first job assistance subsidies (communal work) were introduced

The beginning, after the changes (II.) National Vocational and Career Centre for career starters (with countrywide branch offices ) worked Just before the political and economic changes „pre-PES” was introduced 1991 Act IV on Job Assistance and Unemployment Benefits- present PES foundation

The present situation - structure of Hungarian PES Between Central Employment Office led the PES directly central office play a coordinating and methodical support function in PES, 2001 National Employment Office (NEO) was founded Jan National Employment and Social Office (NESO), and 7 regions

The Hungarian PES

7 regions

NESO

National Employment and Social Office a) coordinate the professional activities of PES b) execute the tasks delegated by the Ministry of Employment Policy and Labour of operating the Labour Market Fund, c) coordinate on professional grounds the law enforcement activities of the Region Centres (7), d) develop and operate the unified system of employment registration, new) coordination of work rehabilitation, and developing the new ‘workfare’ system (2009-) new) data mining and date base building on social policy

NESO (II.) e) execute the human resources development tasks of the Public Employment Service, with the exception of those of the Labour Development and Training Centres, f) execute the methodological tasks related to providing for unemployment provisions, grants promoting employment and labour market services,

NESO (III.) g) develop and operate the information and communication technology (ICT) systems backing the provision of unemployment benefits, grants promoting employment and labour market services, h) execute the centralized property management tasks of the Public Employment Service, with the exception of those of the Labour Development and Training Centres,

NESO (IV.) i) execute the statistical data processing, analytical and information dissemination tasks based on the registers of the Public Employment Service, j) execute the tasks connected to the preparation and analysis of labour market forecasts and statistics and provide for the dissemination of any information of public interest based on these.

NESO (V.) k) undertake on professional grounds to co-ordinate the official inspection duties of the County (Budapest) Labour Centres l) co-ordinate labour market programmes that involve several counties m) execute any other tasks delegated by the Minister of Employment Policy and Labour New tasks since 1st of May EURES, ESF, etc. Restructuring the PES: PHARE ( ), ESF ( ) projects, ERFA + ESZA projects /14

Human Development Plan 1.2 – Modernising the Hungarian PES Main elements: HR R&D and Service development Infrastructure And CAF Project communication 8 billion HUF (8 million EURO national co- payment, 24 million from ESF)

SOCIAL RENEWAL OPERATIONAL PROGRAMME The Social Renewal Operational Programme (SROP) expounds the interventions – in detail in accordance with relevant European Union legislation and regulations – related to the “Social renewal priority” of the New Hungary Development Plan (NHDP), which is Hungary’s National Strategic Reference Framework. The strategic base of the Programme — similarly to 14 other operational programmes — is provided by the NHDP. The budget of the programme is Euro. Its funding is based on the European Social Fund in 85% and related domestic resources in 15%.

Objectives

Local Job Offices Directly lead by County Labour Offices a) registration of unemployed persons, b) labour exchange, job consulting, career guidance and other tasks, c) establishing, suspending and reclaiming unemployment benefits and job assistance subsidies, d) other tasks assigned to its competence by the director of the labour centre

The Labour Market Fund (LMF) a) to provide assistance to the unemployed, b) to support the unemployed in finding jobs and facilitate adjustments of the work force, c) to promote the social security of employees of economic organisations under liquidation, d) to support the development of the training system, e) to increase the job opportunities available to persons with a changed capacity to work,.

Labour Market Fund (II.) f) to assist in the partial financing of early retirement pension benefits, g) to provide funding for expenses related to the provision of subsidies and benefits financed by the basic sub-fund, and h) to contribute to the financing of the operation and development costs of the public employment service

Tendencies in employment services 1990/93 Introduce unemployment benefit, dealing with mass unemployment 1995 Career starter program was launched 1996 program for long-term unemployed 1997 First trained employment counsellors appeared in PES service 1998 program for workforce with disabilities 2000’s employment program was introduced, EU standards 2004 I. National Development Plan2004 I. National Development Plan –first Human Development Plan 2004 first Hungarian NAPfE 2004 first use of ESF resources

Job assistance tools Training Assistance Promoting intensive job-seeking Assistance Provided for Unemployed Persons to Become Entrepreneurs Assistance to Employers with the Creation of New Jobs Assistance with Self-Employment Promoting job creation and job preservation Assistance with the Employment of People with a Changed Working Capacity Assistance with Labour Market Programmes

Employability improvement services in Hungarian PES Job Clubs Employment, vocational counselling and psychology Vocational Rehabilitation Centre Vocational and Employment Information Centre (FIT) and „EUROFIT”

Recent achievements on employment policy

Measures and actions New JSA –job-seekers’ allowance and –J.S.Agreement (1st of Nov. 2005) (U.K. way) More flexible work conditions in –Agriculture (Green voucher) max. 60 days for third country resident –Household (Blue voucher) Forceful control on informal economy Make the informal economy to a formal one Penalty by Code of Criminals (German way) New TWA rules Joint work of social and employment services for inactive citizens (Finnish way)

Measures and actions II. Premium years 5 ys. before pension age (16 hrs./week, 70% of the salary) Micro, SME+n (1 years full burden waving program „Step one more!” (upgrade formal school level +1) after 1st of Jan START card for youth (1st year: 15%; 2nd year 25% instead of the 32% gross wage burden rate) Etc.

Further information Hungarian Central Statistical Office (HCSO) Hungarian National Employment Office Hungary.hu (German, English) Institute of Economics, Hungarian Academy of Sciences Ministry of Employment Policy and Labour (party English version available)