Employee Benefits in Austria are mainly governed by the General Civil Code (ABGB), individual Acts, some European Union directives and Collective Bargaining Agreements (CBAs), the latter having comprehensive coverage of the Austrian workforce. Foreign companies must comply with every aspect of legislation as it applies to their employees once they have opened a subsidiary in the country, usually in the form of a private limited liability company, a GmbH. Once staff have been onboarded, employers must comply with Austria’s multi-layered legislation that provides safeguards and minimum guarantees for employees, such as paid vacations, working hours, termination, severance and notice periods, sick leave, and maternity allowances and benefits.
It emphasises that foreign companies’ responsibilities go beyond simply complying with Austrian tax and payroll regulations – although these still present a heavy workload. Employers must have a firm grasp of what is guaranteed for their employees to ensure a fruitful working relationship. Stepping out of line on specific compensation and benefit statutes runs the risk of fines, further sanctions and an unhappy workforce. This is where Bradford Jacobs points you in the right direction, drawing on over 20 years of experience as a Professional Employment Organisation (PEO) and Employer of Record (EOR). We deal with the complexities while your staff focus on work and are always under your daily operational control.
The General Civil Code (ABGB) lays down regulations governing employee benefits and entitlements in Austria. Additionally, individual Acts refer to specific areas of employment such as working hours, paid vacations, overtime and sickness benefit. Legally-binding Collective Bargaining Agreements (CBAs) cover the majority of the workforce. Austria’s membership in the European Union (EU) also affects some elements of legislation procedures, including the General Protection Data Regulation’s (GDPR) relevance to recruitment.
Maternity Leave and Benefit: It is guaranteed for 16 weeks. Generally, it is eight weeks before and after the due date, but early birth is adjusted accordingly to include the full entitlement. Twelve weeks post-natal applies to premature, multiple or Caesarean section births. Full-time employees’ benefit is assessed on their three monthly payments before the due date and paid at 100% of earnings.
Working Hours and Breaks: The Working Hours Act (AZG) sets maximum daily hours at eight (10 including overtime) or 40 each week (50 including overtime). There must be at least 11 hours between each working day and a minimum of 36 hours of continuous rest in each calendar week, including Sundays. The Act requires a minimum 30 minutes break (unpaid) when working six hours continuously.
Paid Vacations: Employees working the typical six-day week, Monday till Saturday, are guaranteed 30 days paid annual leave under the Holidays Act (UrlG), increased to 36 days after 25 years’ service. Five-day week workers receive 25 days of paid leave.
Unemployment Benefit: Claimants must have been covered by unemployment insurance for 52 weeks in the previous two years or 26 weeks in the last 12 months for under-25s. They must be available for work and registered with the local office of the Austrian Public Employment Service (Arbeitsmarktservice Österreich, AMS).
Compulsory health coverage through insurance funds covers virtually everyone in paid employment, most self-employed, individuals on unemployment benefits, pensioners and dependents of these groups. Patients may have to pay for private treatment and orthodontic procedures, but their funds can partly reimburse them. Patients must also pay towards hospital stays.
The state health insurance fund, the Österreichische Gesundheitskasse, ÖGK, also covers pension and accident insurance. Individuals are automatically covered once they take up employment, are registered by their employer with the relevant social insurance office, and receive a social insurance number.
Employers contribute the equivalent of 21.23% of employees’ salaries from payroll, while employees contribute 18.12% to various categories assessed up to a maximum wage of €5,500 (US$5,490) per month.