Government support for business and workers in Austria

Social partners (employees’ associations that maintain cooperative relationships with employers) have enabled an expanded short-time working scheme. Within a reference period that may initially last a maximum of three months, working hours may be reduced to an average of 10% - 90% of previous working hours. In this context, short-time work may also be structured so that no work at all is undertaken for a while. Furthermore, an arrangement must also be made whereby, prior to commencing short-time work or during short-time work, "expired holiday" from previous holiday years and time credits should be used up.

The preconditions for approving a short-time work subsidy have been adjusted to reflect the present situation surrounding COVID-19. The most important change is this: the possibility for short-time work and the short-time working subsidy in the context of the economic difficulties arising from coronavirus has been anchored in law.

Notwithstanding the short-time working scheme, there are other options for making it through the coming weeks, such as modifying flexitime schemes or schemes for averaging working hours.

Short-time working enables working hours to be reduced within a company during temporary economic difficulties. Reduced working time also means "reduction" of an employee's wage or salary entitlement. This loss of pay is largely offset by both the short-time working benefit provided by the employer, which is then refunded by the short-time work subsidy provided by the AMS.

Amount of short-time work subsidy: To compensate for their lost standard working hours, employees will be entitled to short-time working benefits from their employer. This means that their remaining (reduced) working hours will be contractually remunerated. Added to this will be a short-time working benefit. This will be reimbursed in full to employers by the AMS in the form of the short-time working subsidy according to fixed flat rates per hour of downtime. Employees will thus receive the following percentage of the net pay they received prior to commencing short-time work (net reimbursement rate):

• 80% net reimbursement rate if, prior to the introduction of short-time work, gross pay was between EUR 2,685 and EUR 5,370; or
• 85% where gross pay is between EUR 1,700 and EUR 2,685; or
• 90% where gross pay is below EUR 1,700; or
• 100% of the previous compensation for apprentices.

The scheme covers all employees who fall under/contribute to the unemployment insurance scheme. This means that public servants, or marginally employed employees are not covered by the scheme. Austrian labour market authorities are furthermore of the opinion that only employers with a branch office/establishment in Austria are covered by the scheme.

There must be a reason for short-time work, namely external economic difficulties: the economic difficulties that make short-time work necessary must be briefly set out in writing in an application for short-time work. Currently, according to the indications given by social partners, a comparatively short explanation – COVID-19 and consequential measures – will be sufficient.

Short-time work must be agreed upon within a company: either a works council agreement or an agreement must be signed by all affected employees. The social partners have drawn up specimen agreements for this purpose. The social partners will – once they receive the agreement reached within a company/establishment – either agree or disagree to the short time work agreement; a consultation appointment may be arranged. Once the social partners have agreed to the introduction of the short-time working scheme, the Public Employment Service (AMS) will administer the funding process based on the application for funding.

The application process – either through the AMS, or directly through the social partners – varies from Bundesland to Bundesland.

Reduced working hours: The reduced standard working hours must be on average between 10% and 90% of standard working hours as agreed under collective working arrangements. A new aspect of this is that it may temporarily also be set at zero. Thus, for instance, in the context of a short-time working period of six weeks, it may be set at 0% for five weeks (i.e. no work will take place, and for one week at 60%).

Using up holiday and time credits: Before and during short-time work, expired holiday (i.e. holiday from previous holiday years) and time credits should be used up. The basis for calculating holiday pay will be working hours prior to short-time work. The general rules will apply to agreements on holiday and time credits.

Social insurance contributions: Social insurance contributions must generally be paid as if working hours had not been reduced. But in accordance with the agreement made by the social partners, the AMS will assume the employer's resulting additional costs with effect from the first month.

During short-time work, the number of employees in a business must be maintained at the same level. This means that dismissals are generally only possible if a departing employee is replaced by another. Following the end of short-time work, there exists a one-month period in which positions must be retained; employees may only be dismissed when this retention period expires.