Employment laws in Austria

The framework of employment laws in Austria grew piecemeal rather than being codified into a single labor act. Currently, various acts regulate aspects such as working hours, maternity rights, termination of employment, equal treatment, occupational safety, and worker representation councils. 

Collective agreements specific to industrial sectors, termed Kollektivverträge, add further regulations to the existing labor laws in Austria. Negotiations are made in the context of Austria’s Social Partnership, which includes representatives from employer organizations and trade unions. 

Around 95% of Austrian employees fall under a Kollektivvertrag. As an employer engaging Austrian talent, you need a working knowledge of which statutes apply and how the rules connect across the employment lifecycle. Below are the relevant labor laws in Austria, together with your responsibilities under them.

Key employment laws in Austria

The following labor laws in Austria govern the employment relationships:

1. Angestelltengesetz (AngG / Salaried Employees Act): Deals with office and professional employees concerning probation, notice periods, illness payments, and severance compensation 
2. Arbeitsvertragsrechts-Anpassungsgesetz (AVRAG / Employment Contract Law Adaptation Act): Regulates the issue of Dienstzettel (employment information sheet), fixed-term contract regulations, parents’ leave, and many others concerning contracts
3. Arbeitszeitgesetz (AZG / Working Hours Act): Prescribes the normal weekly working hours, overtime rates, daily rest requirements, and maximum hours of night work
4. Arbeitsruhegesetz (ARG / Rest from Work Act): Determines weekly rest days, Sunday working limitations, and public holidays 
5. Entgeltfortzahlungsgesetz (EFZG / Continued Pay Act): Sickness insurance based on tenure paid by the employer
6. Mutterschutzgesetz (MSchG / Maternity Protection Act): 16 weeks Mutterschutz (maternity protection) plus prohibitions on working while pregnant
7. Familienzeitbonusgesetz (FamZeitbG / Family Time Bonus Act): Paternal Leave (Papamonat) for the non-birthing parent
8. Gleichbehandlungsgesetz (GlBG / Equal Treatment Act): Protection against discrimination during the hiring process, throughout employment, and upon termination
9. Arbeitsverfassungsgesetz (ArbVG / Labor Constitution Act): Regulations regarding works councils, participation rights, and collective bargaining
10. ArbeitnehmerInnenschutzgesetz (ASchG / Workers’ Protection Act): Health and safety measures in the workplace, risk assessment, and ergonomic standards
11. Ausländerbeschäftigungsgesetz (AuslBG / Foreigners Employment Act): Work permits for non-EU nationals (Red-White-Red Card, EU Blue Card)

Labor law compliance in Austria today means understanding the unified framework that applies to most workplace situations.

As a regional reference point, Germany follows a similar uncodified structure. Both jurisdictions split employment regulation across multiple statutes rather than a single labor code.

Contract employment laws in Austria

The employment contracts must be written in German and English. Let’s begin by understanding the common employment relationships: 

Types of contract

You can structure Austrian employment relationships in several ways:

1. Unbefristeter Arbeitsvertrag (indefinite contract): The default with no end date. Standard notice and termination rules apply.
2. Befristete Arbeitsverträge (fixed-term contracts): A defined start and end date. Written form is required to enforce the fixed-term nature. Stacking multiple back-to-back fixed-term contracts (Kettenarbeitsverträge / chain contracts) can be reclassified by Austrian labor courts as indefinite unless objectively justified.

Essential contract terms

Under the recent European Union (EU) Directive, you must issue a written Dienstzettel (employment information sheet) within a few days of the employee’s start date, covering the key employment terms: 

• Parties (employer and employee)
• Start date (and end date for fixed-term)
• Workplace location
• Job description and reporting structure
• Working hours arrangement
• Gross monthly salary and the 14-installment payment schedule
• Applicable Kollektivvertrag (collective bargaining agreement) where one applies
• Probation length
• Notice periods
• Annual leave entitlement

Denmark imposes a similar written-terms obligation.

Minimum wage in Austria

You won’t find a federal statutory minimum wage in Austria. Wage floors instead come from sectoral Kollektivverträge (collective bargaining agreements or CBA). 

The Netherlands takes a different approach, setting a statutory minimum wage updated every six months. Austria’s reliance on Kollektivverträge instead means wage floors vary by sector, with the social partners renegotiating each agreement on its own cycle.

The 2024 IT sector CBA, as a benchmark, set its entry-level baseline at €2,102 per month. Other sectors track higher or lower depending on the agreement in force. 

Use the employee cost calculator for a quick estimate of total employment cost before you draft offers. 

Working hours in Austria

Working hours in Austria run to 40 hours weekly as the statutory standard under the Arbeitszeitgesetz (AZG / Working Hours Act). However, CBAs in many sectors push this down to 38.5 hours. 

Employers can enforce overtime if there is increased work demand, but the employee has the right to refuse if the weekly working hours exceed the limit of 50 hours. 

Overtime laws in Austria set the minimum surcharge at 50%. Sunday, a public holiday, and night work typically attract more under most collective agreements. 

Mandatory benefits

In addition to fair wages, employees in Austria have access to a range of statutory benefits that support their well-being and work-life balance. Most collective bargaining agreements also build in 13th and 14th month salary as standard, paid in June and November, respectively.

Annual leave

Your employees are entitled to 25 working days of paid annual leave per year of service. This rises to 30 working days after 25 years of service with the same employer. 

Unused leave can be carried forward, but the statutory entitlement expires two years after the end of the year in which it accrued.

Sick leave

You continue to pay full salary during sick leave on a tenure-based scale. 

It starts at six weeks in the first year and scales up to 12 weeks from the 26th year of service. After the full-pay window expires, the employee is entitled to half pay for a further four weeks.

ÖGK’s Krankengeld (sickness benefit) covers up to 26 weeks for the same illness, extending to 52 weeks where the employee had at least six months of compulsory insurance in the previous 12 months. 

Social security benefits

Austria runs a comprehensive social insurance system, covering health, accident, pension, and unemployment insurance. 

As an employer, you contribute approximately 21% of gross salary, with the employee contributing around 18%. 

Separately, you pay 1.53% of your monthly gross salary into a Betriebliche Vorsorgekasse (occupational pension fund), accumulating an account that follows the employee across jobs.

Maternity leave

You must provide 16 weeks of Mutterschutz (maternity protection), split into eight weeks before the expected due date and eight weeks after birth. The post-birth window extends to 12 weeks in cases of premature birth, multiple births, or C-section. 

During this protective period, you pay no salary. The employee receives Wochengeld (maternity benefit) directly from ÖGK.

Paternity leave

The non-birthing parent can take a paternity leave of 28 to 31 days during the mother’s protective period after birth. You pay no salary during this time.

Public holidays

Austria observes 14 federal public holidays each year. Many CBAs may also treat December 24 (Christmas Eve) and December 31 (New Year’s Eve) as half-days, though federal law does not require this. 

Additional leaves

Several other leave entitlements support employees in particular life situations:

• Bereavement and compassionate leave: Employees typically receive up to one to two weeks of paid leave for the death of a close family member, personal health, or other family obligations.
• Wedding leave: Most CBAs grant one to three days of paid leave for the employee’s own wedding.

Termination

Termination laws in Austria run through the Salaried Employees Act for white-collar workers. Several pathways can end an employment relationship.

Types of termination scenarios

The main termination pathways for labor law compliance in Austria: 

1. Termination by employer with notice (Kündigung): You can end an employment contract for various business or performance reasons, observing the statutory or contractual notice periods based on the employee’s length of service.
2. Termination for cause (Entlassung): You can terminate without notice in cases of serious misconduct, fraud, criminal activity, or fundamental breach of trust. The grounds must be substantial, and the dismissal must be issued without delay after the cause becomes known.
3. Termination by employee (Kündigung or Austritt): Employees can end their contract with proper notice, or immediately for cause when working conditions become unreasonable.
4. Mutual termination (Einvernehmliche Auflösung): Both parties agree in writing to end the relationship on agreed terms. This pathway avoids notice periods and gives flexibility on the end date and any negotiated terms.

When valid grounds are missing for an employer-initiated termination, the employee can bring an unfair dismissal Anfechtung (challenge). The two-week filing window starts from the dismissal notice and runs at the Arbeits- und Sozialgericht (Labor and Social Court). Keep the termination documented in writing so both parties have an official record.

Probation period

The labor act caps the probation period in Austria at one month. During this window, either side can end the relationship with no notice and no stated reason required. The cap cannot be extended by individual contract.

Notice period

Notice periods vary depending on who initiates the termination and the employee’s tenure.

After probation, the statutory notice period in Austria for employer-initiated terminations scales with tenure:

Severance pay

Severance pay in Austria runs under the Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz (BMSVG / Occupational Employee Provision Act). 

You pay 1.53% of your monthly gross to an occupational pension fund, supervised by the Financial Market Authority. 

Contributions accrue per employee and follow them across jobs. Withdrawal or rollover becomes available after three years on the system, except where an employee resigned voluntarily.

For a regional comparison, Portugal operates a different termination framework, with statutory severance calculated on a per-year-of-service basis rather than through a contribution model.

Navigate employment laws in Austria with trusted support

The labor law compliance in Austria spans several statutes. Each has its own requirements and timelines.

Payoneer Workforce Management supports companies that want to bring on Austrian employees. Compliance across the employment lifecycle is supported on the platform side:

• Localized Dienstzettel (employment information sheet) issuance support
• EUR payroll with Lohnsteuer (wage tax) withholding and ÖGK social insurance reporting
• Monthly contributions to the employee’s chosen Betriebliche Vorsorgekasse (occupational pension fund)
• Statutory leave administration covering Mutterschutz (maternity protection), Papamonat (paternity month), Elternkarenz (parental leave), sick leave, and annual leave
• Termination workflows are aligned with the statutory notice cascade

For contractor engagement instead of full-time hires, the Agent of Record (AOR) service and contractor management system handle the cross-border side. 

Book a demo today to get started.

Frequently asked questions (FAQs)