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Employment Law Overview Austria
Opening a Business in Austria

Employment Law Overview Austria


Austrian employment law can be divided into individual employment law and collective employment law.

Individual employment law regulates the relation between the individual employee and the employer. Collective employment law regulates the collective representation and organisation of employees.

Austrian employment law is not embedded into or regulated by a single labour law code. The sources of Austrian employment law are therefore in several codes/acts/federal law, the respective applicable collective bargaining agreements, works council agreements on a company level, individual employment contracts and instructions.

Key Points

  • There are more than 800 collective bargaining agreements in Austria. These are mandatory for employers and are determined by the trade business carried out by the employer. Collective bargaining agreements take precedence over the law if they are more favourable to employees.
  • A distinction is made between blue-collar and white-collar workers. The regulations and collective bargaining agreements applicable to the two groups are partly different, partly the same. There are more and more steps by the legislator into equal treatment of blue-collar and white-collar workers.
  • There is no nationwide minimum wage. Rather, each collective bargaining agreement provides for minimum wages. The applicable minimum wage must be determined separately for each position/each individual depending on the responsibilities and periods of service.
  • There are special courts for employment and social law disputes. Trained judges decide together with lay judges.
  • A works council can be elected in companies with 5 or more employees.
  • Austrians do not strike much compared to other countries.
  • The early warning system applies in the event of mass terminations (e.g. if at least 5 employees are to be dismissed within 30 days). Terminations in disregard of the early warning system are invalid.

There is no single statute or code governing all aspects of individual and collective employment law in Austria. The four main sources of Austrian employment law are as follows:

  • Statutory Legislation

Austria has a wealth of statutory regulations covering employment law including regulations in the General Civil Code (ABGB), the Labour Constitution Act (ArbVG), the Act on Adjustment of Labour Law (AVRAG), Employment of Foreign Nationals Act (AuslBG), Disability Employment Act (BeinstG), Vacation Act (UrlG), Occupational Safety and Health Act (ASchG), Working Hours Act (AZG), Work Rest Act (ARG), Personnel Leasing Act (AÜG), Wage and Social Dumping Act (LSD-BG).

There are separate statutes regulating blue-collar workers, white-collar workers, domestic workers, public workers, etc. In practice, the most important piece of legislation for white-collar workers is the Austrian Salaried Employees Act (AngG).

Statutory provisions are generally for the benefit of the employees and aim to protect the employee. Other sources of employment law such as collective bargaining agreements, works council agreements and individual agreements may not contain provisions less advantageous to employees (favourability principle).

  • Collective Bargaining Agreements (CBA)

A CBA is a written agreement entered into between employees’ associations and employers’ associations for the purpose of regulating working conditions for employees of the respective industry. Generally, a CBA is concluded for all businesses and all employees in one industry. Sometimes, there are company CBAs.

The parties of the CBA are the competent Trade Union and the competent subgroup of the Austrian Chamber of Commerce. Historically, the CBA mainly regulated the issue of remuneration. Due to the fact that CBAs encompass most employees in the private sector, a certain kind of minimum wage exists in Austria though there is no statutory legislation in this respect. CBAs are usually renegotiated annually for all employees within the respective sector.

An employer cannot “opt out” or “choose” the applicable CBA.

  • Works Council Agreements

To regulate certain topics on a company level, the employer and the works council may conclude works council agreements which are then binding for the represented group of employees. Regarding some measures (e.g. control measures or flexi time, a works council is mandatory).

  • Individual Employment Agreements

Please see section III. EMPLOYMENT CONTRACTS subsection 1. Minimum Requirements.

New Developments

  • Home Office

Since 1 April 2021, working from home is governed by special mandatory rules. Home office is defined as the regular performance of work at the employee’s home (main residence, secondary residence, residence of a life partner, residence of a close relative). According to the new rules on home office, home office has to be agreed between employer and employee.

The employee does not have a right to perform home office and the employer cannot instruct the employee to perform home office. Performance of work from home further requires an agreement in writing for reasons of proof.

The employer has to provide the employee with the “digital work equipment”, such as PC/laptop, data connection/Internet and if needed a mobile phone. As an alternative, the employer can reimburse the costs incurred by the employee through the use of his/her private digital work equipment or the parties can agree on the payment of a lump sum. This entitlement to reimbursement of costs for digital work equipment by the employee is indispensable/mandatory. The use of private equipment for work purposes has to be reviewed carefully from a data protection perspective and appropriate data security measures must be taken.

Some CBAs contain special provisions regarding “Telework”. It must therefore be examined in each individual case which provisions are applicable, whereby as a general rule, the provision that is more favourable to the employee must be applied. The framework conditions regarding home office can be regulated on a company level by a works council agreement.

  • Alignment of Blue- and White-Collar Workers

Between 2017 and 2022, there has been a constant harmonisation of some legal rules applicable to blue-collar workers and white-collar workers. This primarily relates to termination periods and termination dates, continued payment of wages in the event of illness and disability pensions and occupational disability pensions in pension insurance law. In some industries, there are no longer separate CBAs for blue- and white-collar workers. In other industries, there are.

  • Wage and Social Dumping Act (LSD-BG)

In implementation of Directive (EU) 2018/957 (amending Directive on the Posting of Workers Directive), the Wage and Social Dumping Act (LSD-BG) was amended. The Act is intended to ensure that employees that are posted to Austria receive the remuneration to which they are entitled for the work they perform and to enable fair competition between companies. The recent amendments of this Act brought improvement of working conditions for cross-border posted workers, a revision of the scope and penalty provisions in the LSD-BG, new regulation of the security deposit and a new regime of penalties. In connection with wage dumping, administrative fines can be imposed of up to 400,000.00 EUR.

  • Discrimination

In recent years, the ordinary courts have increasingly dealt with discrimination cases. This also testifies to a greater sensitivity with regard to the possibilities of legal protection in discrimination cases. There will possibly be a further increase in the number of cases before the ordinary courts in the coming years. Violations of anti-discrimination provisions will also be brought outside the labour court proceedings, in which discrimination on the basis of the proscribed characteristics is already routinely alleged. In this context, case law on the assessment of claims for damages will probably also emerge in the future.

  • Collective Bargaining Agreements (CBA)

A CBA is an agreement that the trade union (usually) negotiates annually with the employer side (chamber of commerce) for all employees in a specific industry. Typically, these agreements contain provisions on remuneration, continued payment of wages in the event of absence from work, termination of employment, or working time regulations. Most CBAs are re-negotiated every year. In particular, the minimum wage is adjusted by negotiation between the parties to the CBA.

Any questions

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