Cross-border work in the construction industry
- Holiday fund procedure of the Construction Workers Holidays and Severance Pay Fund (BUAK)
- Important rights of posted or hired-out construction workers
- Obligations of the employer
Workers posted or hired out across borders by employers based abroad who carry out construction work as defined by the Construction Workers Holidays and Severance Pay Act (BUAG) are integrated into the holiday fund procedure of the Construction Workers Holidays and Severance Pay Fund (BUAK).
If the posting or leasing company also carries out other activities, the following workers are included:
- In the case of organisational separation: the workers in those parts of the company which carry out construction activities
- If there is no organisational separation: those workers who predominantly carry out construction activities. This will regularly be the case if workers are posted or hired out for construction activities.
The employment of workers who normally work in Austria by employers who are not based in Austria in order to carry out work in Austria is also considered posting.
Exception: foreign social and holiday funds
The entire holiday fund procedure does not apply when:
- The BUAK has concluded agreements with foreign social insurance or holiday funds about the reciprocal offsetting and exemption from the obligation to make surcharges, or
- The employer is provenly integrated into a comparable holiday or social insurance fund system in its country of origin.
BUAK: Payment of wage tax and social insurance contributions
The BUAK passes on wage taxes collected in Austria. If the employee is not liable to tax in Austria due to the short nature of the posting or leasing, the employer can claim reimbursement from the Austrian tax office.
In addition, the BUAK pays the employees' and employers' social insurance contributions to the relevant social insurance institution abroad, as the employee remains within the social insurance system of his/her home country. The name of the social insurance provider is known from the social insurance form A1, which has to be filled in for posting. The name of the social insurance institution has to be given to the BUAK when a claim is asserted.
If postings last for a longer period of time, compulsory insurance and therefore payment of contributions to the relevant Austrian social insurance institution can become possible.
Holiday entitlement and holiday pay
Depending on the duration of the posting or leasing to Austria, the worker acquires entitlement to holidays. After employment periods of 52 entitlement weeks, the employee is entitled to holidays of 30 working days; this rises to 36 working days when a period of employment of at least 1,150 entitlement weeks has been reached. A calendar week counts as an entitlement week.
If the holiday is not consumed in Austria, workers can consume their holidays acquired in Austria and receive holiday pay from the BUAK for up to six months after their return to their country of origin.
Employees who work in a three-shift system or in certain two-shift systems, are entitled to one day of additional holidays for every eight weeks of shift work.
During holidays, the worker has a right to holiday pay (holiday bonus plus holiday supplement). If the holidays are consumed in Austria, holiday pay is paid out directly to the worker by the BUAK. The worker or the employer has to make the claim to the BUAK and provide evidence of the holiday agreement.
The extent of the claim is dependent on the payments made to the BUAK (see obligations of the employer). Before these are received, the BUAK is not obliged to make any payments.
Compensatory payment for unused holiday entitlement
If the employment relationship is ended and there is unused holiday entitlement, the employee can apply for compensatory payment from the BUAK corresponding to the duration in days of the entitlement as payment in lieu for untaken holidays.
The application for compensatory payment for untaken holidays must be submitted to the BUAK immediately after the end of the employment relationship. Holiday entitlement which would be lost within five months of the end of the employment relationship must be compensated for by a payment in lieu regardless of any application made.
Compensation for untaken holidays must be paid after the end of the employment relationship, but is only paid if the employee does not take on new work which is subject to the BUAG in the period for which compensation for untaken holidays is due.
Entitlement to compensation
If the worker does not consume any holidays during the period of the posting or leasing or immediately after his/her return to the country of origin, he/she has - after expiry of a six-month waiting period - a right to a compensation payment in lieu of the entitlement acquired in Austria. In the case of:
- Renewed posting or leasing to Austria or
- the establishment of an employment relationship with an employer in the construction industry based in Austria
Financing of holiday pay
In order to finance holiday pay, the employer has to pay surcharges to the BUAK for every week of entitlement. The level of the surcharges is laid down by the Minister of Labour, Social Affairs and Consumer Protection upon application by the bodies of the employers and employees which are responsible for collective agreements.
If the employer does not fulfil its obligation to pay the surcharges, the BUAK has to sue the employer abroad in court for recovery of the unpaid surcharges. Over and above this, the BUAK can take all measures necessary to collect the surcharges. This includes reminders, seizures, making applications for the opening of insolvency proceedings abroad etc.
Obligation to notify the authorities
Foreign employers have to notify the relevant provincial office of the BUAK of the employment of workers posted or hired out across borders within two weeks of the start of their employment.
The initial notification has to include the following details:
- Name, address and licence to exercise a trade or the object of the business of the employer, and its VAT identification number.
- In the case of the hiring out of employees: Name and address of the hirer
- Name and address of the representative of the employer
- Name and address of the client in Austria (general contractor)
- The names, dates of birth, social insurance numbers and relevant social insurance institutions as well as the citizenship of the employees posted to Austria
- Total duration of the posting, beginning and foreseeable duration of the employment of the individual workers in Austria as well as the agreed normal working hours and place of work of the individual employees
- The date upon which employment in Austria actually ends
- Amount of payment due to the individual workers and the beginning of the employment relationship
- Place of employment (exact address) in Austria (and also other places of work in Austria)
- Type of work and use of the employee, taking into consideration the relevant Austrian collective agreement
Employers based in another member state of the European Economic Area fulfil this obligation by submitting a notification in accordance with Section 7b of the Act Governing Adjustments to Employment Law (ARVAG).
In addition, the employer has to submit regular follow-up notifications to the BUAK with regard to wage details and changes to them, including the beginning and end of the employment relationship, for the calculation of surcharges.