Austria employment law 2026 has entered a period of notable legislative activity. Amendments to the Arbeitsvertragsrechts-Anpassungsgesetz (AVRAG), updated collective bargaining outcomes, and evolving case law from the Oberster Gerichtshof (OGH) are reshaping the obligations of employers operating in Austria. This guide covers the most significant developments of the current quarter, explains what they mean in practice, and identifies the compliance steps that businesses - domestic and foreign-owned alike - should prioritise.
The most consequential recent development is the amendment to the AVRAG, which governs the adaptation of employment contracts to EU directives. The current revision tightens the written-information obligation: employers must now provide new hires with a comprehensive written statement of employment terms within one week of the start date, rather than the previous one-month window. The statement must cover working hours, remuneration components, probationary periods, and applicable collective agreements. Failure to comply exposes employers to administrative fines under the Verwaltungsstrafgesetz.
A second legislative strand concerns working-time flexibility. The Arbeitszeitgesetz (AZG) has been subject to interpretive guidance from the Federal Ministry of Labour, clarifying how the twelve-hour daily maximum and sixty-hour weekly cap interact with on-call arrangements in sectors such as healthcare, logistics, and IT services. The guidance confirms that voluntary overtime beyond ten hours per day requires explicit, revocable written consent from each employee - consent embedded in a standard employment contract template is no longer sufficient.
Thirdly, the Gleichbehandlungsgesetz (GlBG) anti-discrimination framework has seen procedural reinforcement. The Gleichbehandlungskommission now has an extended mandate to issue binding recommendations in cases of gender-pay-gap disputes, and employers with more than 150 employees must submit updated income-transparency reports to the relevant authority. Non-compliance triggers a presumption of discrimination in subsequent litigation, shifting the burden of proof to the employer.
Austria';s system of social partnership means that collective agreements (Kollektivverträge) set minimum wages and conditions for virtually every sector. The current round of negotiations has concluded for the metalworking, retail, and construction sectors, with agreed wage increases reflecting recent inflation trends. Employers bound by these agreements must update payroll systems promptly; applying the old rates even for a single pay period constitutes a wage underpayment under the Allgemeines bürgerliches Gesetzbuch (ABGB) and triggers claims for back pay with statutory interest.
A common mistake among foreign-owned subsidiaries is assuming that a group-level compensation policy satisfies Austrian collective-agreement minimums. In practice, the Kollektivvertrag applicable to the Austrian entity';s industry classification governs, regardless of what the parent company pays in its home jurisdiction. The industry classification is determined by the Austrian Economic Chamber (Wirtschaftskammer Österreich, WKO) at the time of company registration and can be difficult to change retroactively.
Employers in the IT and professional-services sectors should note that the relevant Kollektivvertrag for these industries has introduced a new job-classification matrix. Roles must be mapped to the updated matrix, and any reclassification that results in a lower minimum salary than the employee currently receives is not permissible - the higher rate is preserved as a personal supplement.
For employers navigating collective-agreement compliance or payroll restructuring, reaching out to specialists early avoids costly corrections later. We can help structure the setup correctly the first time. Contact us at info@vlolawfirm.com.
The Oberster Gerichtshof has issued several decisions relevant to day-to-day employment management. One significant ruling addresses the validity of non-compete clauses (Konkurrenzklauseln) under the Angestelltengesetz. The OGH confirmed that a non-compete clause is void if the employee';s monthly remuneration at the time of signing falls below the statutory threshold set in the Act. Employers who have relied on boilerplate non-compete language without checking the salary threshold should audit existing contracts.
A second ruling concerns the calculation of holiday entitlement (Urlaubsanspruch) for employees on long-term sick leave. The OGH aligned Austrian practice more closely with EU Court of Justice precedent, holding that holiday entitlement continues to accrue during periods of incapacity for work, and that employees may carry over unused entitlement for up to fifteen months after the end of the reference year if illness prevented them from taking leave. Employers must adjust their leave-management systems accordingly and should not forfeit accrued leave at year-end without first verifying whether the employee was prevented from taking it by illness.
A third decision clarifies the conditions under which a fixed-term contract (befristetes Arbeitsverhältnis) is deemed to have converted into an open-ended contract. The OGH reiterated that a second consecutive fixed-term contract is permissible only where an objective justification exists - project-based work, seasonal demand, or replacement of an absent employee. Chains of fixed-term contracts without such justification are treated as a single open-ended contract, triggering full dismissal-protection rights under the Angestelltengesetz or Arbeiter-Abfertigungsgesetz as applicable.
Austria';s Homeoffice-Gesetz, introduced in an earlier legislative cycle, has been supplemented by administrative guidance addressing cross-border remote work. The core issue for international employers is that an Austrian employee working remotely from Austria for a foreign employer may trigger Austrian social-security registration obligations under the ASVG (Allgemeines Sozialversicherungsgesetz), even if the employer has no registered presence in Austria. The current guidance confirms that the employer';s obligation to register and contribute arises from the employee';s habitual place of work, not the employer';s seat.
Practical scenario one: a German GmbH employs a software developer who relocates to Vienna and works entirely from home. Under current rules, the German company must register as an employer with the Austrian Sozialversicherung and remit contributions. Failure to do so exposes the company to back-contributions, surcharges, and potential personal liability for the managing director.
Practical scenario two: an Austrian GmbH sends an employee to work remotely from another EU member state for a period exceeding the A1 certificate threshold. The employer must apply for an A1 certificate from the Österreichische Gesundheitskasse (ÖGK) before the assignment begins. Operating without the certificate risks rejection of the employee';s social-security coverage in the host country and fines in both jurisdictions.
A non-obvious requirement is that the Homeoffice-Gesetz obliges employers to reimburse employees for reasonable costs of working from home - specifically digital equipment and a proportionate share of internet costs - unless the employer provides the equipment directly. This obligation applies regardless of whether the home-office arrangement is permanent or occasional.
Austria operates a dual severance system. Employees hired before a specific legislative cutoff remain under the old Abfertigung Alt system, under which severance is paid directly by the employer upon termination (subject to minimum service thresholds). Employees hired after that cutoff fall under Abfertigung Neu, under which the employer makes monthly contributions of 1.53 percent of gross remuneration to an employee-designated Mitarbeitervorsorgekasse (MVK). Foreign employers frequently confuse the two systems or omit MVK contributions entirely, which results in accumulated arrears and interest.
Dismissal procedure in Austria is governed by the Angestelltengesetz for white-collar employees and by sectoral rules for workers. Notice periods are set by statute and, in many cases, by the applicable Kollektivvertrag; contractual notice periods may not fall below the statutory minimum. A common mistake is issuing notice by email without confirming receipt, since Austrian courts have held that notice must be received - not merely sent - to be effective. Registered post or personal delivery with a signed acknowledgement is the safer approach.
Termination for cause (Entlassung) requires an immediate response: the employer must act within a short period of becoming aware of the grounds, or the right to dismiss for cause is forfeited. The OGH has consistently interpreted this window narrowly. Employers who delay while investigating an incident risk losing the right to dismiss without notice and being required to pay full notice and severance instead.
Redundancy procedures for larger workforce reductions trigger consultation obligations with the Betriebsrat (works council) where one exists, and notification to the Arbeitsmarktservice (AMS) under the Frühwarnsystem. The AMS notification must be filed at least thirty days before the first termination takes effect. Missing this deadline does not invalidate the terminations but exposes the employer to administrative penalties and reputational risk with the AMS, which administers unemployment benefits and active labour-market programmes.
Employers should treat the following as immediate action items in light of recent developments.
For cross-border employers, the additional steps are to confirm social-security registration obligations for remote workers in Austria and to obtain A1 certificates for any employees working remotely from other EU member states.
If your organisation needs a structured review of Austrian employment compliance, our team is available to assist with documents and filings. Contact us at info@vlolawfirm.com.
What is the practical effect of the new written-information obligation under the AVRAG amendment?
The amendment reduces the window for providing new employees with a written statement of employment terms from one month to one week from the start date. The statement must be comprehensive, covering remuneration, working hours, applicable collective agreements, and probationary terms. Employers who use standardised onboarding packs should review them to ensure all required elements are present. An incomplete or late statement does not automatically invalidate the employment contract, but it exposes the employer to administrative fines and may complicate disputes about agreed terms. In practice, preparing a compliant template in advance is the most efficient way to manage this obligation.
How long does it take to complete social-security registration for a foreign employer with remote workers in Austria?
Registration with the Österreichische Gesundheitskasse typically takes several weeks from submission of the required documents, which include proof of the employer';s legal existence, details of the employee, and the employment contract. The employer must obtain an Austrian employer number before the first salary payment. Processing times can extend if documents require translation or if the application is incomplete. Foreign employers should begin the process as soon as a remote-work arrangement is confirmed, not after the employee has already started. Retroactive registration is possible but attracts surcharges on late contributions.
When should an employer in Austria use a fixed-term contract rather than an open-ended one?
Fixed-term contracts are appropriate where a genuine objective justification exists - for example, covering a specific project with a defined end date, replacing an employee on parental leave, or meeting seasonal demand. They are not appropriate as a general tool for managing probationary risk, since Austrian law already provides a one-month probationary period in most employment relationships. Chaining fixed-term contracts without justification converts the relationship into an open-ended one by operation of law, triggering full dismissal-protection rights. Employers uncertain about the correct structure for a particular hire should seek legal advice before the contract is signed, as correcting the structure after the fact is significantly more complex.
Austria employment law 2026 presents a demanding compliance environment. Legislative amendments, updated collective agreements, and a consistent line of OGH case law all require active attention from employers - both those long established in Austria and those entering the market for the first time. The consequences of non-compliance range from administrative fines to full reinstatement claims, making proactive legal review a sound investment.
VLO Law Firms advises international clients on employment law matters in Austria. We can assist with employment contract reviews, collective-agreement compliance, social-security registration for cross-border arrangements, and termination procedures. To request a consultation, contact: info@vlolawfirm.com