Building BYD Szeged: Labor Risks for Chinese Migrant Workers in Hungary’s EV Supply Chain

Executive Summary

This report documents the working conditions of Chinese migrant workers at the construction site of BYD’s new electric-vehicle manufacturing facility in Szeged, Hungary.

The investigation reveals a pattern of labor rights violations affecting Chinese migrant workers employed through subcontractors and intermediary recruitment agencies. These abuses cluster into three interrelated areas: systematic excessive working hours without adequate rest, coercive and opaque recruitment and management practices, and wage and cost arrangements that, through the withholding of wages and the shifting of recruitment and travel costs to workers, place some migrant workers in situations of heightened vulnerability.

The eleven issues outlined below illustrate these systemic risks which may run contrary to Hungarian law and align with the ILO’s indicators of forced labor:

Continuous Seven-Day Workweeks with No Guaranteed Rest
Excessive Hours Amounting to Systematic Overtime Abuse
Wages Structured to Obscure Overtime Obligations
Recruitment Fees Creating Debt-Driven Labor Dependence
Conditional Fee Refunds as a Retention Mechanism
Illicit Use of Non-Work-Authorized Immigration Status for Full-Time Industrial Labor
Delayed Wage Payments Among Smaller Subcontractors
Opaque Employment Relationships
Company-Directed Instructions to Falsify Working Hours During Inspections
Inadequate Medical Insurance and Medical Care for Workplace Injuries
Intimidation and Retaliation

Introduction

Recruited by a labor agency, an installation worker who spoke to CLW shared that he paid approximately RMB 8,000 (approx. USD 1,100) in recruitment fees to secure his job at Szeged. His labor agency did not even issue a formal receipt or cover any of his travel and accommodation costs. Paying recruitment fees and international travel costs out of pocket before starting work is a substantial financial burden. But the worker was informed that the recruitment fee would be refunded after completing one full year of employment. If he left earlier, however, he would need to cover visa fees in addition to all costs already paid upfront. Although his employment contract specified a two-year term with one annual return trip to China, he also signed multiple contracts with different intermediaries, including one with a Hungarian company. As a result, he was unsure which contract would prevail and which terms, conditions, and benefits applied to him.

After arriving at BYD’s Szeged project, he worked from 7:00 a.m. to 5:00 p.m. daily, with an official one-hour lunch break that was frequently shortened. Except for rain-related stoppages, he reported working for many consecutive days without rest. About 70-80 percent of his wages were paid monthly, with the remainder withheld until year-end or after his return to China. This wage structure left him financially unable to stop working or resign before completing at least one full year of employment.

The anonymized account above illustrates the recruitment and working conditions experienced by Chinese migrant workers at BYD’s Szeged construction site. This was not an isolated case; similar patterns in recruitment, wage, and working-time structure were documented across multiple subcontracting teams, according to workers.

BYD’s manufacturing facility in Szeged was announced in December 2024 as the automaker’s first passenger vehicle production base in Europe. Construction began in 2024 after permits were secured, with site preparation and foundation work underway. The facility is planning to offer 10,000 job opportunities upon completion, with an annual capacity of producing around 300,000 vehicles per year.

More broadly, BYD’s Szeged facility is the company’s strategic entry point into the EU market. In recent years, Hungary has emerged as a pivotal node in Europe’s electric vehicle (EV) supply chain. In 2024, the country absorbed approximately 62 percent of all Chinese EV-related investment in Europe, including major projects by BYD Auto Co., Ltd. (BYD) and Contemporary Amperex Technology Co. Limited (CATL).

However, the scale of BYD’s US$4.5 billion investment into the Szeged facility stands in sharp contrast to the conditions faced by construction workers on the ground.

According to workers, multiple dormitory buildings were located onsite, six of which were fully occupied with around 450 residents each. An additional 1,000 workers live offsite, bringing the total workforce to approximately 4,000. These workers were hired through different employment arrangements, including direct employment by BYD and primary construction contractors and employment through third-party subcontracting structures. Recruitment processes often involve labor intermediaries operating in both China and Hungary, resulting in a complex cross-border labor system. One of the companies employing Chinese migrant workers for the BYD Szeged project is AIM Construction Hungary Kft., a subsidiary of Jinjiang Construction Group Co., Ltd.

Through field visits and direct engagement with workers, China Labor Watch (CLW) identified a range of potential labor risks at the BYD Szeged construction sites, including excessive working hours, opaque wage calculations, recruitment-related financial burdens, improper use of visas, and unequal allocation of work-related costs. These risks were found to be concentrated among migrant workers employed through subcontracting arrangements.

Drawing on more than two decades of experience investigating labor conditions in China and Chinese overseas investment projects, CLW considers the Szeged project to be an important case for examining labor structures and associated risks in Chinese companies’ overseas operations. Based on field visits, worker engagement, and legal and policy analysis, this report looks into the employment arrangements and labor risks embedded in the project, with the aim of assisting regulators, policymakers, and companies in identifying potential issues and assessing compliance risks.

Outside the BYD Szeged Facility (Photo by Li Qiang)

Methodology

This report is based on field investigations conducted by CLW in October and November 2025 in Szeged, Hungary, focusing on labor conditions during the construction phase of BYD’s electric-vehicle manufacturing project.

As of the writing of this report, CLW conducted two field missions, engaging with 50 Chinese migrant workers* through a combination of short-form interviews and semi-structured, in-depth discussions. Workers were primarily construction and installation workers employed through subcontractors, labor intermediaries, or small labor teams, as well as a limited number of workers directly employed by primary contractors or the general contractor.

To reduce the risk of retaliation and protect worker safety, this report uses pseudonyms and generalized descriptions to avoid direct or indirect exposure of personally identifiable information. Testimonies were cross-checked through comparison across multiple workers’ stories and follow-up communications.

The legal analysis in this report draws on relevant provisions of Hungarian labor and migration law, as well as the ILO Forced Labor Indicators (2012), to assess potential compliance risks and indicators of forced labor.

* Note: In early 2026, CLW conducted an additional field trip and carried out 11 further interviews to confirm the findings of this report, bringing the total to three field trips and over 60 interviews.

Limitations

This investigation is subject to several unavoidable limitations. Findings are based primarily on worker testimonies and their consistency across multiple accounts, rather than on employer-controlled documentary records. Due to limited access, CLW was unable to independently review employer-controlled documents—such as management records—that could clarify official policies, internal procedures, and contractual obligations.

In addition, due to fear of retaliation, immigration-related vulnerability, and concerns over negative social and employment consequences, some workers declined participation or may have withheld information. As a result, the findings presented in this report should be understood as indicative rather than exhaustive.

This report focuses primarily on labor conditions within subcontracting arrangements, where risks were found to be most concentrated. Working conditions experienced by workers directly employed by BYD or its primary contractors may differ and are not comprehensively assessed in this report.

This report does not constitute a legal determination or judicial finding. Its purpose is to assist regulators, policymakers, companies, and other stakeholders in identifying potential labor and human-rights compliance risks and in determining appropriate follow-up, oversight, and remedial actions.

Findings

In September 2025, CLW received a complaint from a Chinese worker employed at the BYD factory construction site in Szeged, Hungary. Though the worker’s employer had initially promised he could return home after six months, his return was repeatedly postponed due to construction deadlines. Worse still, returning to China without his employer’s authorization would mean that portions of his monthly wages would be withheld, and he would be asked to pay for visa fees, intermediary fees, and airfare, which were unaffordable to him. In response, CLW conducted two field visits to Hungary, one in October and another in November 2025, engaging with 50 workers—most of whom were construction workers signed with labor agencies or subcontractors of BYD’s factory construction project—and documented practices that may violate Hungarian labor law and align with the ILO’s forced labor indicators.

Image sourced from social media; translated by China Labor Watch

1. Continuous Seven-Day Workweeks with No Guaranteed Rest

Many workers reported laboring seven days per week for full monthly cycles, except when heavy rain temporarily halted construction. Weather interruptions served as the only rest. Though sick leave was technically available, workers mentioned avoiding using it out of fear of financial loss or negative reaction from their employer.

For example, one worker mentioned that he had been in Hungary for over a year and, apart from weather-related rest days, he was granted less than 10 days of rest.

Continuous work without weekly rest may violate provisions of the Hungarian Labor Code, which stipulates that workers are entitled to two rest days per week, which must be granted by the end of the working-time framework if such a framework is applied. Workers do not know how long their working-time framework is or when they will get their rest days. The Labor Code also sets an annual overtime ceiling. Workers’ reports indicate that their tight schedule was determined by strict construction deadlines and pressure from labor brokers, who in turn are accountable to primary contractors operating under BYD’s rapid construction timeline.

These working conditions may violate the Hungarian Labor Code (Act I of 2012), summarized below:

Articles 99, 109 (Maximum Working Time & Overtime): Overtime must remain within a regulated framework, and the annual overtime ceiling is capped at 400 hours.

Article 101–102 (Sundays and Public Holidays): Work cannot be assigned on Sundays and public holidays, except in defined categories of employment.

Articles 105–106 (Weekly Rest Period): Outside of a set of defined circumstances, employers must provide a minimum of 48 consecutive hours of weekly rest, commonly scheduled following no more than six consecutive working days.

Articles 115–117 (Annual Leave): The employee is entitled to annual leave every calendar year, which consists of 20 days of basic leave with additional leave calculated based on years worked.

The reported seven-day workweeks, imposed without compensatory rest or overtime premiums, raise risks of non-compliance with statutory rest periods, leaves, and regulated overtime limits.

2. Excessive Hours Amounting to Systematic Overtime Abuse

The standard daily schedule reported by workers was 9–10 hours per day, generally with only a 30-minute lunch break. Workers were unsure whether the additional 1–2 hours were calculated based on overtime premium. Conversations with local Hungarian workers corroborated that Chinese laborers routinely work seven days per week, and in the summer months, shifts up to 12 hours long were reportedly common, with some workers working 14 hours. Winter hours were only marginally reduced.

In the absence of rest days, these schedules amount to well above the legal annual limit of 400 overtime hours, even when measured conservatively, and also exceed the 48 hours weekly legal limit. Therefore, rather than sporadic overwork, such work schedules reveal a systematic unpaid overtime regime treated as standard practice—with no legal compensation mechanisms in place.

Excessive work hours violates the Hungarian Labor Code (Act I of 2012):

Article 92 (Regular Working Time): The standard maximum working time is 8 hours per day, with fixed schedules requiring a daily rest break.

Article 99 (Weekly Working Time): Weekly working hours should not exceed 48 hours.

Article 103 (Work breaks): Mandated rest breaks must be provided to workers.

Article 108, 143 (Overtime Compensation): Overtime must be paid at a wage premium—50% on regular workdays and 100% (in addition to the weekend and holiday wage premium) on weekly rest days or public holidays. This cannot be absorbed into regular wages.

Article 109 (Annual Overtime Cap): Annual overtime is capped at 400 hours.

Article 140 (Weekend and Holiday Premiums): Work on weekends and public holidays requires a wage premium.

Article 143 (Working Time Records): Employers keep accurate, up-to-date records of working time, overtime, rest periods.

Work schedules at the BYD factory construction site lack mandatory overtime premiums and exceed daily hour limits and the legal annual overtime ceiling, constituting systematic non-compliance with regulated working time protections.

Persistent unpaid overtime may therefore constitute exploitative working time practices with potential indicators of coercion, which is an indicator of forced labor, especially when combined with economic penalties for taking leave.

3. Wages Structured to Obscure Overtime Obligations

Most Chinese workers CLW engaged with earned approximately 500–600 RMB (approx. USD 70–85) per day in gross wages. Local workers pay up to 33% of their monthly wages in taxes, while some Chinese workers don’t pay taxes, since their wages are paid in China. Since workers’ standard one-hour meal break is often condensed to half an hour, their standard workday is close to 9.5 hours.

Furthermore, hours worked beyond the nine-hour work day are rolled over into another work day to be counted as regular working hours and workers only receive regular pay. This practice systematically extends workers’ workdays and effectively erases workers’ legal entitlement to overtime pay. The roll-over mechanism for “overtime” beyond the regularly scheduled nine-hour workday further suggests a deliberately structured system to avoid paying legally mandated overtime rates.

Additionally, workers described a lack of transparent wage calculation, no written breakdown of overtime components, and a dependence on team leaders to interpret or mediate wage disputes. This opaque structure blurs compensation rules and keeps workers unaware of the wages legally owed to them.

As a case example, a worker mentioned that his daily work hours are from 7 a.m. until 5 p.m., and he has a short break during the day for meals. He earns 550RMB (approx. USD 76) a day. If he exceeds the prescribed number of working hours, those hours would not be counted as overtime; instead, they would be carried over and calculated into the work hours for the following day, and he would not receive overtime pay.

These practices may violate the Hungarian Labor Code (Act I of 2012):

Article 92 (Standard Working Time): Legally defined working time is 8 hours per day, and overtime must not be absorbed into a “base rate.”

Article 107–109, 140, 143 (Overtime Compensation): Overtime requires a wage premium or compensatory rest, and cannot be merged into standard pay or informal team-level arrangements.

Article 155 (Wage Calculation and Payment Transparency): Employers must provide clear, itemized wage documentation, including overtime, bonuses, deductions, and hours worked.

The normalization of 9-hour “standard” days may constitute a direct attempt to circumvent overtime obligations and could be in violation of mandatory wage transparency rules.

4. Recruitment Fees Creating Debt-Driven Labor Dependence

Workers recruited through subcontracted labor teams reported paying recruitment fees ranging from RMB 8,000 to nearly RMB 20,000 (approx. USD 1,100–2,780) prior to departure. By contrast, workers hired directly by BYD or through primary contractors reported no upfront fees, demonstrating that these burdens are specific to subcontracted tiers.

For workers originating from low-income regions of China, these fees may constitute a substantial debt bondage, effectively forcing workers to remain in place regardless of rights violations, wage shortfalls, or substandard working conditions. This is especially problematic for those who financed their recruitment fees through family borrowing or informal lenders. Burdened by upfront fees, workers described feeling unable to freely leave work or switch employers, illustrating a mechanism of economic coercion.

Such practices may violate the following regulations :

Hungarian Labor Code (Act I of 2012), Article 161 (Restriction on Wage Deduction): Deduction from wages is only permissible if required by law or enforceable court decisions, or with the employee’s consent; deductions that benefit the employer or intermediaries for securing or maintaining employment are forbidden.

Hungarian Act CXXV/2003 on Equal Treatment: It is stipulated that employers are to adhere to the principle of equal treatment, and discrimination and unequal treatment of employees is prohibited.

The payment of recruitment fees appear to align with ILO Forced Labor Indicators, as debt bondage—where economic debt restricts the freedom to leave an employer—is recognized as an indicator of forced labor. Charging recruitment fees that produce binding indebtedness is a recognized pathway to debt-based forced labor, even when workers initially consent to travel or sign contracts.

5. Conditional Fee Refunds as a Retention Mechanism

Workers report that several subcontractors promised to refund recruitment fees only if they completed one full year of uninterrupted employment at the BYD construction site. Workers who attempt to leave early would not only forfeit these refunds but could be required to repay additional expenses, including the airfare to Hungary and visa-processing costs. These expenses can represent a significant financial burden. These penalties were communicated informally by team leaders, yet widely understood as binding conditions among workers.

A worker mentioned that he struggled to adapt to the environment in Hungary and wanted to leave earlier. But because he was required to bear the related costs of returning to China, he felt that he had no choice but to continue working in Hungary.

These practices may violate the following regulations:

Government Decree No.118/2001: Labor agencies are prohibited from charging job seekers recruitment fees; instead employers should be charged the fees.

Economic penalties left workers feeling unable to resign—even when faced with excessive hours and wage disputes. The structure therefore transforms recruitment fee “refunds” into retention tools that condition freedom of movement on financial loss, creating an economic dependence that restrains workers from exercising their right to exit employment without retaliation. This may amount to a debt-based retention mechanism operating at the subcontractor level.

The ILO’s Forced Labor Indicators framework lists debt bondage and withholding of wages or benefits as indicators of forced labor.

Together, linking fee reimbursement to completion of a fixed work term may constitute debt bondage regardless of contractual consent at the time of recruitment.

6. Illicit Use of Non-Work-Authorized Immigration Status for Full-Time Industrial Labor

While some workers came to Hungary on work visas, other workers reported that their company told them they were on business visas despite being recruited for full-time, manual industrial labor at the BYD construction site. Although the specific category of the business visa is unclear, it is likely short-term and does not permit employment.

Among themselves, workers consistently stated that they began working immediately upon arrival, without obtaining legal work authorization. Two workers provided detailed accounts, including one who spent three months laboring under a business visa, then returned to China for two months solely to obtain another visa, before resuming the exact same job in Hungary. This suggests that visa misuse may be a deliberate strategy facilitated by labor intermediaries to speed up labor deployment while bypassing legal employment screening and worker protections attached to proper work visa processing.

The lack of legal immigration status creates significant physical, social, and legal vulnerabilities for workers. For example, as one worker explained: “I am on a business visa. If I have a work injury, I can’t go to the hospital for treatment. I can only rest in the dormitory to recover.”

Using inappropriate visa categories deprives workers of basic labor protections, including lawful contracts, written wage protections, and access to legal recourse. This practice also creates an inherently precarious immigration status that exposes workers to threats, retaliation, or deportation risk, preventing them from reporting abuse or seeking alternative employment. Mobilizing industrial labor under non-work-authorized entry channels may therefore constitute a systemic strategy to potentially circumvent labor regulations within BYD’s construction supply chain.

Specifically, the use of non-work-authorized entry channels appears to be in breach of Hungarian Labor Law and Migration Law:

Act II of 2007 on the Admission and Residence of Third-Country Nationals: Full-time employment without a valid work permit is explicitly prohibited, and residence must correspond to the purpose of stay.

Hungarian Labor Code (Act I of 2012), Article 42: Employment must be formalized through lawful contracts, with all protections applicable only to legally employed workers.

Deploying workers under nonemployment-based visas unlawfully bypasses legal employment contracts, thereby denying workers the labor protections that are guaranteed under the Labor Code.

7. Delayed Wage Payments Among Smaller Subcontractors

While BYD and its main contractors reportedly paid on time, workers employed by smaller subcontracting teams described wage delays of up to three months, a clear breach of Hungarian wage-payment regulations. Such delays deter workers from resigning or voicing grievances, as doing so puts them at risk for losing out on substantial unpaid income. Withholding of wages thus operates both as an economic infraction and as a de facto mechanism of control.

Furthermore, these workers mentioned that wages are paid in two installments: The first installment is paid monthly in Hungary with around 20–30% withheld by the employer. The withheld portion (second installment) remains inaccessible until workers return to China, when it is deposited in RMB into their Chinese bank accounts.

As a case example, a worker holding a business visa shared: “I came to work in Hungary on a business visa. They said I have to wait three months after returning to China, before they can pay all my wages in full.”

Delayed wage payments may violate Hungarian Labor Code (Act I of 2012):

Article 80, 95, 155 (Timely Wage Payment): Employers must pay wages by the agreed deadline, at least monthly, with full written information on wage components; wages must be settled accurately and in full on termination.

Article 161 (Duty to Ensure Lawful Payment): Employers are responsible for providing verifiable payment records and cannot defer wages beyond legally required payment intervals.

Withholding payment for many months may constitute unlawful wage retention and denial of statutory economic rights, regardless of subcontractor status.

Persistent late payment for the purpose of retaining workers may also constitute coercive wage control, converging with internationally recognized indicators of forced labor. ILO’s Forced Labor Indicators identify withholding of wages as a mechanism of coercion, as it restricts a worker’s ability to exit employment without severe financial penalty.

8. Opaque Employment Relationships

Additionally, some workers reported that they did not know who their legal employer was due to the multiple layers of subcontracting involved—including direct BYD employment, first-tier contractors, second-tier subcontractors, and outsourced labor teams. Some workers were therefore unable to identify who was responsible for their wages or whom they should approach to assert legal claims. This opacity in the employment relationship itself constitutes a major labor risk and may violate Hungarian law requiring clarity in employment arrangements.

Specifically, this may violate the following stipulations in the Hungarian Labor Code (Act I of 2012):

Article 46 (Employer Obligation to Inform): Within seven days of the employment relationship, the employer must provide in writing to the employee, the individual or party that acts on behalf of the employer.

Article 134 (Employer Obligation to Keep Records): Employers must maintain accurate, complete, and up-to-date records of all employment-related data necessary for verifying compliance with labor law.

In multi-tier subcontracting arrangements, each employer in the chain must keep records that clearly identify the employment relationship and the entity responsible for wage payment. When workers cannot identify their employer at all—because of opaque or informal labor teams—this raises risks of non-compliance with Article 134.

A sample employment contract template shows that Chinese workers in Brazil, Hungary, and Turkey sign with a labor dispatch company, which recruits workers for Jinjiang, a BYD contractor. The contract mentions work hours are 10 per day; wages are paid as a daily rate; personal leave, rest days and non-attendance days are unpaid; and the pay for overtime is the same as the pay they receive for regular hours worked (The Hungarian Labor Code specifies that overtime hours are to be paid at a premium—50% on regular workdays and 100% on weekly rest days or public holidays). The contract also specifies that workers must unconditionally accept any work that is outside their hired position and that they may be sent to countries other than Brazil, Hungary, and Turkey.

9. Company-Directed Instructions to Falsify Working Hours During Inspections

Workers reported that at the pre-departure training, they were instructed to claim during any inspection that they worked “five days per week, eight hours per day, with one hour of overtime.” In reality, Chinese workers regularly worked 12 hours per day, seven days per week, especially in summer. This indicates an intentional effort to conceal unlawful working hours.

This may violate the employer duties outlined in the Hungarian Labor Code (Act I of 2012):

Article 134 (Employer Obligation to Keep Records): Employers must maintain accurate, complete, and up-to-date records of all employment-related data necessary for verifying compliance with labor law.

Directing workers to misrepresent their working hours during inspections undermines the purpose of Article 134 and may constitute a violation of statutory record-keeping and transparency obligations.

10. Inadequate Medical Insurance and Medical Care for Workplace Injuries

Workers mentioned that they did not have adequate medical insurance, nor did they receive the medical care needed for workplace injuries. Workers rarely mentioned receiving any training related to health and safety.

This may run contrary to obligations in the following laws and regulations: :

Hungarian Labor Code 2012 (Act I of 2012), Article 51: (Obligation to ensure safe work environment): Employers are required to provide safe and non-hazardous work and employees can only be employed if there are no adverse consequences, especially when taking into account their state of health.

Hungarian Act XCIII/1993 on Labor Safety: Employees have the right to safe and healthy work conditions, and employers are to implement occupational safety and health requirements. Without clarity in employment arrangements, workers also do not know whom to approach when OSH issues arise.

11. Intimidation and Retaliation

Intimidation and Retaliation

Many workers also expressed fear of retaliation. Some stated that if the employer learned that they had spoken to outsiders, they risked dismissal, wage withholding, or negative consequences after returning to China.

This may violate Hungarian Labor Code 2012 (Act I of 2012):

Article 7 (Abuse of Rights): Parties in the employment relationship are prohibited from taking actions that might restrict the other party from asserting their interests or suppressing their expression of opinion.

Article 271, 272 (Freedom of Association): Workers’ rights to form and join trade unions are protected. The threat of retaliation for speaking to outsiders likely prevents workers from engaging with unions.

Along with this, ILO’s Forced Labor Indicators (2012) identifies intimidation and threats, such as when victims wish to complain about the conditions at work, as a forced labor indicator.

Analysis

The findings presented in this report are primarily based on investigations into the working conditions of workers employed through subcontracting arrangements. Labor recruitment and employment at the construction site of BYD’s Szeged facility operate within a multi-layered and cross-border labor structure. While a portion of workers were directly employed by BYD, China Labor Watch (CLW) identified significant numbers of workers employed by BYD’s primary contractors, engaged through project-level outsourcing arrangements, or hired by third-party subcontractors and small labor teams. Recruitment intermediaries involved in these arrangements include both China-based labor agencies and Hungarian labor brokers, forming a complex labor supply chain with diffuse accountability.

The investigation indicates that workers directly employed by BYD and its primary contractors generally experienced clearer contractual terms, greater employment stability, and more favorable working conditions than those employed through third-party subcontractors. Workers employed through subcontracting arrangements face significantly greater legal and human rights vulnerabilities, including opaque payment practices, partial withholding or delayed payment of wages, and the routine use of business visas collectively places workers in situations of economic dependency, information asymmetry, and reduced access to legal protections. BYD and contractors are thus at risk of violating the principles of equal treatment under Hungarian Act CXXV/2003 which prohibits unequal treatment among different groups of workers. Additionally, Government Decree 118/2001 stipulates that private employment agencies must not meet labor needs with unlawful conditions and that foreign placements must comply with the host country’s laws.

Taken together, these practices create a migrant workforce that is highly vulnerable, easily replaceable, and readily subject to discipline and control. In such circumstances, workers are often unable to exercise their rights to resign, report abuses, or seek remedies when faced with excessive working hours, wage disputes, or unsafe working conditions, due to fear of economic loss, immigration-related consequences, or retaliation. This constellation of risks closely aligns with the International Labor Organization’s (ILO) Forced Labor Indicators, particularly those relating to situations of vulnerability, economic coercion, and restrictions on the freedom to leave employment through financial penalties.

From a human rights due diligence perspective, these practices should not be understood as isolated violations or the result of dishonest recruiters. Rather, they reflect a labor management model characterized by repressive labor practices and prioritization of productivity under accelerated construction timelines, tight project deadlines, and insufficient oversight or enforcement of domestic and international labor standards. Within this model, subcontracting arrangements function to systematically shift risk, dilute employer responsibility, and weaken effective compliance with labor and human rights obligations.

Under the framework of the EU Corporate Sustainability Due Diligence Directive (EU CSDDD), such labor structures may constitute foreseeable and identifiable high-risk conditions within a company’s operations and value chain. Companies are required to identify, prevent, mitigate, and remediate adverse human rights impacts. The labor practices observed at the Szeged project, however, indicate significant gaps in risk identification and management, thereby reinforcing employer control while eroding migrant workers’ labor rights and access to remedy.

Recommendations

Based on the findings at the construction site of BYD’s Szeged facility, China Labor Watch urges immediate and systemic action to address labor exploitation and ensure compliance with Hungarian law and ILO standards. These recommendations are clustered in the following thematic guidance:

Strengthen Regulatory Oversight

Hungarian labor authorities must conduct independent inspections of subcontracted labor on BYD and other Chinese-backed industrial projects, with particular focus on working hours and overtime pay.
Enforcement of international standards and Hungarian law should extend to visa compliance, recruitment practices, and wage payments, with meaningful penalties for violations, especially where debt bondage or coercion is identified.

Mandate Corporate Accountability

BYD and its contractors must implement transparent recruitment and wage policies, including banning upfront fees and conditional refunds, while documenting overtime, hours worked, and pay in full compliance with the law.
Subcontractors and labor brokers must be held contractually accountable, with regular monitoring and robust, anonymous and unmonitored grievance mechanisms accessible to workers in their language.
Companies must remediate any violations promptly, ensuring that migrant workers are able to exercise their rights without fear of retaliation.

Ensure Equitable Working Conditions

Weekly rest periods and maximum working hours must be strictly enforced, with overtime paid at legally mandated rates.
Economic dependencies created through debt or conditional fee structures must be eliminated to prevent coercion.

Promote Transparency and Worker Protections

Employment contracts, visa documentation, and pay records must be accessible to workers and regulators.
Workers must receive clear information on their rights and access to legal support.
Companies should publicly report on labor conditions and corrective actions.

Coordinate Across Borders

Hungarian authorities and EU agencies should collaborate to prevent systemic labor abuses in transnational Chinese investments.
Lessons from BYD operations globally, including documented abuses in Brazil, must inform proactive risk mitigation and remediation strategies.

Conclusion

This investigation into the construction site of BYD’s Szeged factory in Hungary shows that the labor issues identified display clear and consistent structural characteristics. Taken together, opaque wage calculations, improper use of visas, and the shifting of recruitment costs onto workers create a highly precarious employment situation.

Such working conditions not only place Chinese migrant workers in legally and economically disadvantaged positions but may also generate spillover effects on Hungary’s labor market and the broader European workforce.

When companies reduce costs by providing limited labor protections for migrant workers, overall labor standards are driven down in favor of productivity, running the risk of creating a race to the bottom that pits local workers against socially, politically, and economically vulnerable migrant workers. More importantly, as the BYD Szeged project is a key entry point for Chinese electric-vehicle investment in the European Union, the labor practices established at the project carry precedent-setting risks. If low wages, long working hours, limited worker protections and other repressive practices are tolerated or normalized, they may set a baseline for the European Union’s emerging EV supply chain, shaping expectations for future foreign-investment projects.

Moreover, the EU Corporate Sustainability Due Diligence Directive (EUCSDDD) came into force in July 2024. Member states, including Hungary, are required to transpose the directives into national law. Once enacted, companies will be required to conduct due diligence to identify, prevent, mitigate and remediate adverse human rights impacts. Thus, it is recommended that companies operating within the EU begin implementing measures to reduce potential human rights risks, and reverse the trajectory of tolerating repressive labor practices.

The labor practices observed at the Szeged project mirror patterns long documented in parts of China’s domestic manufacturing sector, where legal protections exist but enforcement gaps have allowed abusive labor practices to persist. The concern now is that such models are being replicated within the EU.

Addressing the aforementioned issues requires coordinated action by companies, government regulators, regional institutions, and civil society. Strict enforcement of Hungarian labor law, meaningful oversight of subcontracting arrangements, and corrective action to address visa and recruitment-related violations is essential to protecting migrant workers’ rights. At the same time, such actions are equally critical for safeguarding the working conditions of Hungarian workers and ensuring fair competition across the European labor market.

Only through timely and robust regulatory intervention—ensuring fair wages, reasonable working hours, transparent recruitment, and effective accountability—can exploitative labor practices be prevented from becoming institutionalized within Europe’s green-transition industries, thus ensuring that the energy transition does not come at the expense of workers’ rights.

Responses from Government Authorities and European Union Institutions

In December 2025, CLW filed a formal complaint with the Hungarian government’s labor authorities regarding labor rights concerns involving Chinese migrant workers in the BYD Hungary project. The organization also submitted related information to institutions at the European Level. We have received the following written responses:

European Commission’s Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL). The Commission formally acknowledged receipt of the communication and confirmed that the Hungarian Labour Inspectorate is the competent authority to investigate the matter. The Commission referred us to an officer within the International Affairs Unit for further engagement.

European Parliament’s Commitee on International Trade (INTA Committee). The Secretariat of the Internal Market and Consumer Protection Committee forwarded our information to the office of a Member of Parliament.

Hungarian Commissioner for Fundamental Rights (Ombudsman). The Ombudsman’s office declined jurisdiction over the labour law aspects of the case, citing statutory limitations. However, they confirmed that the competent Hungarian labour authorities are reviewing the matter. The visa-related concerns have been formally transferred to the National Directorate-General for Aliens Policing for further action.

Hungary’s Csongrád-Csanád County Government Office. Responded that they are initiating an examination of the report we submitted in accordance with Act XXV of 2023 (on co

Wednesday, April 15, 2026

Hungary -Building BYD Szeged: Labor Risks for Chinese Migrant Workers in Hungary’s EV Supply Chain