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Austria’s ‘short-time work’ regime for the coronavirus crisis

Written by
Schima Mayer Starlinger, a modern, service-oriented law firm in Austria.
In order to counteract the negative economic impact of Covid-19 the Austrian government has implemented ‘corona short time work’.

The Austria Government has introduced a regulated regime of short-time work (‘Corona-Kurzarbeit’). The intention behind the short-time work is a temporary reduction of normal working hours and remuneration. To take advantage of this regime, the company has to discuss it either with the works council if there is one, or with affected employees. In the first case, an agreement about short time work is concluded between the employer and the works council, in the latter case the employer has to conclude individual agreements with every affected employee (based on master agreements called ‘social partner agreement’ which are available on Chamber of Commerce or union websites). To ease the process in view of restrictions on leaving home, agreements with the employees can also be reached using email or even WhatsApp. The employer must forward the agreement form, signed either by the works council or by all the employees affected, to the Labour Market Service (AMS). The employer must also send a special form giving the exact number of employees of the company (how many white collar employees and how many workers), the planned duration of short-time work, the number of employees affected, the average income and the planned maximum reduction in working hours among other information to the AMS.

According to a recent statement by the social partners (trade unions and Chamber of Commerce), it has been decided that the AMS will grant preliminary approval for complete applications that include social partner agreement. The trade unions examine application for short-time-work on a selective basis and can reject individual applications within 48 hours. The Chamber of Commerce has already given its global approval for all applications for short-time work submitted in accordance with a social partner agreement to speed up the approval process.

Corona short-time work may also be agreed retroactively starting on 1 March 2020 for a maximum of three months, after which it may be extended once by another three months. As a general rule, employees have to use any holiday entitlements from previous years and any time credits, if feasible, before starting the short time work. However, the employer is only required to prove it made a serious effort to ensure the employees use old vacation and time credits (for example by sending a letter to employees requiring them to use up their old vacation as much as possible). If the short-time-work is extended by another three months, employees basically have to use three additional weeks of vacation from the current vacation year (if they have accrued that many days).

During corona short-time work, an average of at least 10% (and of 90% maximum) of the weekly normal working time must be worked. Working hours can be arranged flexibly: normal working hours can temporarily be set to zero for some of weeks, as long as the average of working hours is at least 10% over the whole period of short time work.

The advantage of the coronavirus short-time work system compared to previous models is that depending on the employee’s salary (up to EUR 1.700 gross / up to 2.685 gross / above 2.685 gross) the AMS will pays the difference between reduced net income (which is paid by the employer) to guarantee that the employee earns up to 90%, 85% or 80% of former net income (based on usual hours outside of short time working). The AMS will not pay short time for any portion of salary above EUR 5,370.

During short-time work, no employees can be laid off for business reasons. In addition, any employee that participated in short time work cannot be laid off for a further month after the short-time work ends. If terminations based on personal reasons are necessary, the employer has to employ a new employee instead.

Lisa Hittinger
Associate - Austria
Schima Mayer Starlinger