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Bridge to New Markets.

“Corona: Short-Time Work“

schramböck © BKA

What are the objectives of short-time work?

  • New, facilitated form of short-time work,
  • temporarily for a period of six months (three months plus an additional three months if needed),
  • to safeguard jobs and operational know-how,
  • maintain flexibility in personnel deployment,
  • preserve the liquidity of companies, and
  • to retain valued employees.

What steps are necessary if a company plans to introduce short-time work?

Step 1: Prompt notification to the Austrian Public Employment Service (AMS) about existing employment difficulties, including the following information:
  • Precise number of employees and planned duration of short-time work
  • Number of employees as well as trainees affected by short-time work
  • Scope of employment of the impacted employees
  • Average income in the respective income groups
  • Planned maximum reduction in working time
Step 2: Negotiations held with the works council, if any exists
Step 3: Agreement with the social partners (Federal Economic Chamber and Austrian Trade Union Federation)
Step 4: Submission of application to the responsible AMS office


Is short-time work possible for every company?

  • Short-time work is possible for companies regardless of their respective size and the sector in which they operate.
  • If there is no entity to negotiate a collective agreement on the employer side (e.g. in the case of associations, NGOs), the approval on the employees' side is sufficient for the agreement of the social partners.
  • Personnel leasing companies are eligible for aid.
  • Bankrupt companies in the midst of bankruptcy or restructuring proceedings are not eligible for aid.
  • Local and regional authorities, legal persons under public law not actively participating in economic life as well as political parties are also not eligible for support.

Which employees are potentially entitled to short-time work?

  • In principle, all employees come into question for short-time work.
  • Members of management bodies are covered if they are insured under the General Social Security Act (ASVG).
  • Trainees are eligible as well.
  • Freelancers may receive aid if their normal monthly working hours can be depicted.
  • Marginally employed persons, civil servants, one-person enterprises and shareholders-managing directors are not encompassed in the short-time work model.

Can only subdivisions of the company or individual employees be subject to short-time work?
The social partnership agreement stipulates the material scope of short-time work and its applicability to employees.

Can new employees be hired, for example on 1 April, and immediately be included in the short-time work scheme immediately after their employment relationship begins?

  • The legally stipulated purpose of short-time work is to prevent unemployment in a temporarily difficult economic situation by reducing normal working hours of employees who previously worked for the company.
  • In this case, the state aid fulfils the purpose of partly compensating for salary losses resulting from the reduction of working time. For this reason, the calculation base for determining state aid must be able to refer to at least one month or four weeks in which the employee received a full salary (or at least three months or thirteen weeks in the case of irregular wages) before the beginning of short-time work.

If parents return to work from parental leave during the period of short-time work, can they also be included in the short-time work model?
Yes, provided the scope of the social partnership agreement regulating short-time work in the particular company encompasses employees whose employment relationship remained valid during the period of parental leave.

Can the number of working hours be reduced to zero?
During the entire reference period, working time and thus the related remuneration can be reduced by a maximum of 90 percent. However, a weekly working time of zero hours can also be agreed upon over a period of time.

Does the employee have to consume his entire vacation time and all working time credits?
In submitting the application for financial support, the company has to document to the AMS that serious efforts were made to consume all past entitlements to vacation time as well as working time credits of the employees. The employer is not legally permitted to order employees to unilaterally use up vacation days and working time credits. For this reason, the company is not required to demonstrate its success. If negotiations with works council do not lead to an agreement on the reduction of vacation time and working time credits, this fact is not allowed to cause harm to the employer.
Within the context of extending short-time work, the employer has to document the fact that serious efforts were made to reduce current vacation time entitlements by three weeks.
Previous vacation time and working time credits can also be reduced during the period of short-time work. However, these times do not comprise calculable working hours lost.

How much money does the employee receive? How high are the net replacement rates?
The short-time work grants provided by the AMS are based on the net salary of the employee before the introduction of short-time work, and are designed to guarantee a minimum income:

  • In the case of a gross salary of up to € 1,700, the remuneration amounts to 90 percent of the previous net salary.
  • In the case of a gross salary of up to € 2,685, the remuneration amounts to 85 percent of the previous net salary.
  • In the case of a gross salary of more than € 2,686, the remuneration amounts to 80 percent of the previous net salary.
  • For income up to the maximum contribution basis, the AMS covers the additional costs incurring for the employer in comparison to actual working time but not for the portions of income above the maximum contribution basis.

Must the employer continue to pay social security contributions?
The fixed rates of the AMS also include the proportionate social security contributions? However, the social security contributions of the employer are based on the salaries before short-time work. In the new short-time work model, these increased contributions will also be covered by the AMS starting in the fourth month.

How quickly can an agreement be reached on the short-time work model?
The social partners have pledged to create the basis for a social partnership agreement within 48 hours after negotiations are concluded at a company level (existence of a ready to be signed company agreement/individual agreement).

How long will the period of financial support last?
Initially for three months. If necessary, the model can be extended for an additional three months.

Can the application for financial support be submitted retroactively?
Yes, the application for short-time work grants can be submitted retroactively as of 1 March 2020.

Is the employer allowed to dismiss employees during the period of short-time work? How long must the employer retain employees after the short-time work is over?
In line with the social partnership agreement, the employer is obliged to maintain the level of employment in the company during short-time work and up to one month afterward. Under special circumstances, negotiations can be carried out about not complying with the stipulated retention period.

Can an employer headquartered in another EU member state apply for short-time work for employees fully insured in Austria?
No, unfortunately government aid is not possible in such cases. Short-time work in Austria represents assistance provided to employers who actually operate a permanent business establishment in Austria or an entity responsible for employment relationships.

Can a company headquartered in Austria also include employees covered by social insurance abroad in the short-time work scheme?
Short-time work is also being offered not least also in the interest of the community of insured people. The bottom line is the government aid must be financed through their social insurance contributions. For this reason, short-time work is limited to employees covered by unemployment insurance in Austria working for companies with a business location in Austria.

Source: AMS and BMAFJ


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