Website of the Austrian Social Ministry

Wage Payment

If a worker provides a service as part of an employment contract, payment is of course due to him/her.  A differentiation is made in Austria between two forms of payment: salaries for so-called white collar workers and wages for ‘blue collar' workers.

The minimum wage or minimum salary in Austria for employees is regulated by collective agreements, and partially also by minimum wage rates and payment for apprentices.

Collective agreements

Important areas of labour law provisions (particularly regulations on payment, flexible working hours, termination of the employment relationship etc.) are regulated in Austria via collective agreements which are negotiated between  representatives of the employers and employees who have the legal capacity to negotiate collective agreements. In this way, certain minimum wages and minimum standards for other important conditions of work are created without the involvement of the state. 

In terms of content, the parties to the collective agreements are largely autonomous in terms of their wages policy, though some fundamental legal conditions (such as the principle of equal treatment) have to be observed.

The Federal Conciliation Office

The Federal Conciliation Office is a body established within the Federal Ministry of Labour, Social Affairs and Consumer Protection. Its tasks include setting minimum wage rates, rates for homeworking and payment for apprentices as well as the declaration of collective agreements to be statutes (thus making them also applicable to employees who are in the same field but are not directly part of a collective agreement in their company). 

In addition, the Federal Conciliation Office can recognise the legal capacity of voluntary professional and other associations to make collective agreements if they fulfil the statutory conditions.

The legal capacity to make collective agreements

According to the Labour Relations Act (ArbVG), statutory interest groups of employers and employees have the legal capacity to make collective agreements in so far as they are independent of their negotiating partners on the other side of the table and are responsible for the regulation of working conditions. Independence here means that it must be possible to clearly assign the respective organisation to either the side of the employers or that of the employees.

Statutory interest groups with the legal capacity to make collective agreements include:

  • The Chambers of Labour (representatives of the employees)
  • The Austrian Economic Chamber (representative of the employers)
  • The associations of liberal professions (representative bodies of all persons belonging to the same profession)

Public-law legal persons also have the capacity to make collective agreements as long as they do not belong to another body which also has this capacity.  Their capacity to make collective agreements is that of an employer to regulate the working conditions of their own employees (for example the Austrian Academy of Sciences or the Federal Museums).

The capacity to make collective agreements can, however, also be laid down by a legal provision (e.g. the Bundesrechenzentrum GmbH).

In addition, the following entities can apply to the Federal Conciliation Office for the recognition of their legal capacity to make collective agreements:

Voluntary professional associations of employers or employees whose articles of association include the regulation of working conditions. The professional association must also cover a larger geographical and content-related area.  

Associations which do not belong to any body which has the legal capacity to make collective agreements. The latter's capacity to make collective agreements is that of an employer - to regulate the working conditions of their own employees.

The award of the legal capacity to make collective agreements by the Federal Conciliation Office is conditional on the presence of a certain level of economic significance, particularly with regard to the number of members.

In agriculture and forestry, the recognition of the capacity to make collective agreements is decided on by the High Conciliation Commissions (Obereinigungskommissionen) which are incorporated into the offices of the respective provincial government.

Wage inspections

The Act on the Combating of Wage and Social Dumping (LSD-BG) is intended to ensure equal wage conditions for workers in Austria.   

Administrative penalties for underpayment

Payment lower than that which is due according to laws, regulations or collective agreements can lead to an administrative penalty.

Range of penalties in relation to wage inspections

Depending on the number of employees affected and whether the administrative offence has been committed previously, the penalties range from €1,000 - €50,000. Employment agencies now have to provenly make wage documentation available, and hirers who do not keep such documentation on file commit an offence when they do not keep wage records on file. The range of penalties for circumventing inspections has been increased to €20,000. In addition, not sending documentation in spite of being called upon to do so can lead to a fine. As with underpayment, circumventing inspections and not keeping wage records on file can lead to the company being prevented from carrying out its business activities.

Extended safeguarding measures

In the case of grounds for suspicion of an administrative offence, and if there are reasons to expect that there may be impediments to prosecution of the offender, the measures taken to ensure the payment of administrative penalties is extended by:

  • Demanding provisional collateral (money or objects belonging to the employer or the agency)
  • The freezing of payments to the contractor or hirer by the inspection authorities.
In addition, measures to ensure the payment of fines for all administrative offences can be imposed in accordance with the Act on the Adaptation of Employment Contracts.