Website of the Austrian Social Ministry

Labour market policy in Austria

Labour market policy includes all measures taken by public entities - such as the federal government, the Public Employment Service and partially also the provinces - to manage the labour market. A regulated labour market has positive effects on the social system and ensures fair economic competition.    

The tasks of labour market policy

According the Public Employment Service Act, labour market policy has the following tasks:

  • Preventing and eliminating unemployment
  • Balancing the supply and demand for workers to as great an extent as possible and in an economically meaningful and sustainable way while adhering to social and economic principles.

The goals of labour market policy

The goals of labour market policy are:

  • To achieve and maintain full employment
  • To keep older employees in work for longer
  • To take active measures to raise the level of qualifications and skills and to promote equal opportunities
  • To increase transparency in the labour market
  • To develop human resources
  • To help get the unemployed back to work 
  • To combat long-term unemployment

These general objectives are made more specific via the labour market policy targets of the Ministry of Social Affairs, which are implemented by the Public Employment Service. The current targets are available as a PDF file from the download area.

The Public Employment Service has the task of advising workers and finding jobs for them, as well as filling vacancies of which it is notified. During unemployment, people can claim unemployment benefit as a means of subsistence, and during longer periods of unemployment they can claim unemployment assistance.

Passive, active and activating labour market policy

Passive labour market policy

Passive labour market policy means the sum of all the measures and services which are designed to ensure that people can subsist during periods of unemployment. The individual measures can be:

  • Wage replacement benefits such as unemployment benefit and unemployment assistance, which in the case of unemployment are funded by unemployment insurance.
  • Means-tested minimum income - this is a benefit provided by the provinces.
  • Insolvency compensation - a wage replacement benefit if an employer becomes insolvent.
  • Advances on a pension - money which is paid for reasons of old age as well as due to reduced ability to work or inability to work.

 There is a legal entitlement to all of the benefits listed above.

Active labour market policy

Active labour market policy refers to those measures which promote the better functioning of the labour market. They are concluded by means of a contract between the Public Employment Service and those affected. Active measures can also be taken in advance in individual cases before unemployment actually occurs.

The most important measures of active labour market policy are:

  • Increasing the transparency of the market by processing various items of information with the aid of state of the art information technology: Job matching, careers information and advice
  • Subsidisation of initial and further vocational training in order to adapt the skills of the labour force to the needs of the market
  • Promotion of the mobility of the workforce, e.g. by providing assistance in finding suitable child care
  • Support in overcoming personal problems which make it difficult to advance oneself in employment (advice and support in cases of addiction, debt, homelessness, physical and mental disabilities etc.)
  • Temporary subsidised employment via recruitment grants to facilitate entry into working life

The target groups of active labour market policy

Active labour market policy is mainly designed to support those people for whom - for various reasons - it is difficult to find work. Examples of this are:

  • Long-term unemployment
  • Absence from the labour market while bringing up children
  • A lack of language skills
  • No qualifications or obsolete qualifications
  • Older age
  • Health problems, disabilities
  • Addictions (alcohol, medicines, illegal drugs)

Activating measures

Activating measures are a speciality of Austrian labour market policy. They could be assigned to active labour market policy, but are financed by funding which is earmarked for passive labour market policy.

Examples of activating measures are:

  • Part-time benefit for older workers: this is a benefit from unemployment insurance which is paid to the employer for a maximum of five years so that older workers can reduce their working hours. If the conditions for the so-called corridor pension (possible from the age of 62 at the earliest) are fulfilled, from 1 January 2016 a partial pension has also been available as a special form of part-time benefit for older workers
  • Various benefits to help ensure people's livelihoods during initial and further training: training unemployment benefit and unemployment assistance, unemployment benefit during rehabilitation, foundation unemployment benefit and further education benefit.

The legal basis for labour market policy

Austrian labour market policy is based on the following legislation:

The Public Employment Service Act (Arbeitsmarktservicegesetz, AMSG) regulates the tasks and organisation of the Public Employment Service (AMS). It also forms the legal basis for subsidies granted by the AMS.

The Labour Market Policy Financing Act regulates the financing of labour market policy. This is predominantly based on the levy of an unemployment insurance contribution from those persons who are subject to compulsory insurance according to the Unemployment Insurance Act.

The Unemployment Insurance Act regulates compulsory unemployment insurance and the conditions for claiming unemployment benefit and unemployment assistance. It thus makes a contribution towards providing a subsistence income during unemployment. Applications for benefits are made to the Public Employment Service. 

Other relevant legislation for the labour market includes the Employment of Foreign Citizens Act, the Labour Market Promotion Act, the Act on Wage Compensation from the Insolvency Contingency Fund, the Unemployment Assistance Regulation, the Temporary and Agency Employees Act, the Special Support Act, the Act on Bad Weather Compensation for Construction Workers, the Transitional Benefit Act, the Labour Market Area Districts Regulation and the Service Cheque Act.