Short-time work for employees – an overview

The Coronavirus has caused massive unemployment throughout Austria. In fact, things haven’t been that bad since the Second World War. In March 2020 562.522 people are registered as unemployed with the Public Unemployment Service (AMS).

To tackle the issue, the government has fast-tracked a new model of short-time work (Kurzarbeit Neu). The measure aims to save as many jobs as possible. Employers will receive financial aid so they don’t have to lay off their workers.

At Austria for beginners we’ve received numerous calls and emails with regard to this model. As it is our goal to make Austrian law accessible, we will examine and explain the most important aspects for workers and employees of the short-time work model.

What is a short-time work?

We talk about short-time work when the working time in business gets significantly reduced for a limited time period. The reduction serves as a bridging operation for overcoming the temporary economic hardship caused by Coronavirus.

The short-time work model has a 3-month duration and if needed, can be extended with 3 more months.

Mechanics

The application for the model can be made only by the employer to the Unemployment Service and only for workers who have been employed with the firm for at least 1 month. The employers make an estimation of the number of hours the employee will be working during the short-time work.

Compensation

The short-time work financial aid is being calculated on the basis of the gross salary before the start of the short-time work, including all bonuses, commissions and premium pay. However, overtime payments and expense allowances are left out. The later doesn’t apply to All-In contracts and working contracts where is not explicitly stated that over-time lump sum can be withdrawn. Therefore, in those cases, over-time payments are included in the calculation.

An employee receives monthly a net replacement rate which is calculated as follows:

• Up to 1 700 euros gross salary amounts to 90% from the net salary before the short-time work.

• Up to 2 685 euros gross salary amounts to 85% from the net salary before the short-time work.

• From 2 685 euros gross salary amounts to 80% from the net salary before the short-time work.

• Earners whose monthly gross salary exceeds 5 370 euros are not entitled to this financial aid.

• Apprentices get 100% of their compensation before the short-time work.

During the short-time work period, it doesn’t matter how many hours the employee has worked daily/weekly/monthly. The calculation is done after the end of the third month. It is possible that the actual hours of work performed exceed the estimation. In that case, the employee will get paid also for the additional working hours. The Austrian Chamber of Labour has created a handy app for workers to keep track of their working hours.

The net replacement rate does not apply to the 13th and 14th salaries. They will be paid in the full amount.

Another big advantage of the model is the dismissal protection the employees from forced redundancies. The protection covers the short-time work period and one month after its end. Person-related dismissal  (the most common reason for a person-related dismissal is an illness) is still possible.  However, not in the case of a Coronavirus infection.

There has been some controversy regarding the use of time credits and vacation days from past years.  The model requires the two to be used if possible before or during the short-time work. Those days will be paid 100% of the net salary before the short-term work.

While many workers feel this is unfair, it is worth mentioning that we are experiencing something unprecedented as individuals and as a society. Many businesses are doing their best to stay afloat and save as many workplaces as possible. It is particularly challenging for small and middle-size companies. Even if they implement the short-time work model they will receive the financial aid after the end of each month and it is not clear yet how long will that last. Despite that, they have to manage to stay afloat. In the meantime, the majority of those businesses have suspended partially or entirely their operation. Employers and employees have to meet half-way.

It is crucial that we contribute whatever we can to come on the other side of this crisis.

Do you have any questions about the short-time work model or another legal matter? Write to us at office@austria4beginners.at or leave a comment under the post!

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Austria for beginners is a Vienna-based non-profit organization that aims to make Austrian law accessible to foreigners by providing free legal consultations.

The organization’s areas of expertise include:

• Immigration law
• Administrative law
• Labour and social insurance law
• Family law
• General civil law