On 1 January 2015, the New Labour and Social Law Amendment Act 2014 (Arbeits-und Sozialrechtsänderungsgesetz 2014 (ASRÄG 2014)) came into force in Austria. The law provides for several significant changes for employers in the fields of wage and social dumping.
Increased control and supervision
Austria has a very distinct regime of control with regard to wages, connected tax and social security contributions. Employers are audited regularly on a random basis and, if irregularities are identified, the consequences include subsequent demands for payments of tax, social security contributions and the imposition of administrative fines.
Up to 1 January 2015, compliance with the respective minimum wages in accordance with the relevant law, regulation and / or collective bargaining agreements were subject to these controls.
From 1 January 2015, employers must not only comply with the respective minimum wage obligations but also with obligations regarding any and all statutory supplementary payments such as special payments, allowances and / or surcharges, which are reviewed and evaluated by the control authority. Every shortfall in relation to the statutory minimum remuneration (base salary plus any and all possible statutory special payments, allowances and / or surcharges) may result in prosecution as well as significant fines.
Administrative fines relating to wage and social dumping range between EUR 1,000 and EUR 10,000, and for repeated transgressions between EUR 2,000 and EUR 20,000. Taking effect from 1 January 2015, these fines are imposed cumulatively for each affected employee.
Reduction for "Active Repentance"
The control authority can refrain from imposing penalties, if the employer:
- pays the difference between the actual (shortfall) salary and the statutory salary and supplementary payments due to the employee in advance of assessment or review by the control authority; or
- pays out the difference in advance of the authority request within the given time period;
and in each case
- the shortfall is minor; or
- only the control authority finds that the error is the result of accidental oversight or error by the employer (as opposed to serious negligence or deliberate action).
In some cases, subsequent payment of the difference only has a mitigating effect and will not protect the employer from administrative sanction. With any occurrence of wage and social dumping, the social insurance authority has to inform the affected employee of the findings.
Limitation period for prosecution
On 1 January 2015, the limitation period for prosecution of wage and social dumping cases was extended from one to three years. In the case of continuous underpayment, the limitation period for bringing any action is five years from the date of the most recent underpayment.
International secondments or temporary agency work
If an employee is on an international secondment or undertaking temporary agency work for a foreign employer in Austria, the employee is now entitled to minimum wage at a rate equivalent to comparable employees of an Austrian employer (in accordance with applicable law, regulations and / or collective bargaining agreements) from the first day of engagement in Austria. The following short-term engagements are, however, excluded from this obligation:
- business meetings only which do not result in further working obligations;
- exhibitions or comparable events of a maximum duration of ten consecutive days (set-up and dismantling work and delivery of goods is not excluded);
- attendance at conferences;
- cultural events;
- international sports tournaments (again excluding delivery of goods such as food and drink); and
- assembly work in the case of the supply of facilities and any connected training activities or repair work.
In the case of international secondments or temporary agency work, the Austrian employer / engaging company is obliged to retain all the relevant documents in relation to salary and social security payments for control and evaluation purposes; these must also be in German. All of the aforementioned requirements are applicable to international secondments and temporary agency work within the EU or the EEA.