Minimum Wage in Austria

In contrast to other EU member states, there is no statutory minimum wage in Austria. However, collective agreements provide for a minimum wage, which should not be undercut. Below you will find information on minimum wage protection in Austria.

In Austria, there is no statutory minimum wage that applies to all employees. Minimum wages¹ or minimum salaries¹ for the respective occupational group or sector are mainly regulated in collective agreements without the involvement of the state. The term "collectively agreed minimum wage" therefore refers to the minimum remuneration that must be paid to employees according to the respective collective agreement.

¹⁾  The term "minimum wage" is generally used for blue-collar workers, the term "minimum salary" for white-collar workers. For the sake of simplicity, only the term "minimum wage" is used below.

In total, there are over 800 collective agreements in Austria. Around 95 percent of employees throughout Austria are covered by collective agreements.

Most collective agreements already provide for minimum wages of at least EUR 1,700 gross 14 times a year, resulting in an average monthly wage of EUR 1,983 gross.

The collective agreement minimum wage may not be undercut by an employment contract or works agreement. It is directly legally binding and can be enforced before the labour and social court having jurisdiction (see Enforcement).

In order to know the minimum wage one is entitled to, the employee must first figure out which collective agreement applies to him or her.

Scope of a collective agreement

The scope of application of a collective agreement provides information on which employees are covered. There is usually a geographical, professional and personal scope of application:

• Territorial scope: Determines the area (federal state/provinces) within which the collective agreement applies.
• Professional scope of application: Depends on the sector or branch of business for which the collective agreement is concluded^.(2))
• Personal scope of application: Determines the groups of persons (workers, employees, apprentices) to which the collective agreement applies.
   

²⁾The professional scope of application is determined by the employers' organisation of the respective employer. However, it is not relevant whether the employees belong to the trade union that is involved in the conclusion of the collective agreement.

When searching for the applicable collective agreement, the following should be noted in particular: Collective agreements are not concluded according to activities or professions, but according to sectors. It is therefore not only relevant which activities are carried out (e.g. electrician, secretary, lorry driver, etc.), but above all which industry/sector the company is assigned to.

Pursuant to Section 7 of the Austrian Wage and Social Dumping Prevention Act, (Lohn- und Sozialdumping-Bekämpfungsgesetz, LSD-BG), the parties to collective agreements must make the collective agreements they have concluded available in electronic form.

The currently applicable collective agreements can be accessed free of charge via the following databases:

• Collective agreement information platform of the ÖGB
• Collective agreement register of the WKO
• Instructions for the collective agreement search on the posting platform

Classification in the wage scale of a collective agreement

The actual minimum wage to which the employee is entitled under the collective agreement is determined by categorising the employee in an occupation or function group of the wage scale of the collective agreement applicable to the employment relationship.

Unless the collective agreement is based on other criteria (e.g. specialised training), classification is based on the employee's actual main activity. Classification into the various occupation or function groups is therefore based on job characteristics (e.g. employees who carry out technical or commercial work independently in accordance with general guidelines and instructions within the scope of their assigned tasks).

Previous periods of service (Vordienstzeiten) - depending on the collective agreement - must also be taken into account when classifying employees:

• Previous periods of service in other companies can lead to a higher classification under the collective agreement. A distinction is made between career years and years in a particular job group.
  • All completed periods of service are taken into account for years of service (Berufsjahren).
  • In the case of years in a occupation or function group (Verwendungsgruppenjahren), only the periods in which the employees have worked in a job at least equivalent to in the job group are taken into account.
• Periods of prior service completed abroad in the EU/EEA are recognised as Austrian periods of prior service.

The classification must be recorded in the employment note or employment contract. In the event of a change of occupation within the company, the classification must be adjusted if necessary.

Amount of the collectively agreed minimum wage

The amount of the specific minimum wage under the collective agreement depends on many factors such as training, professional experience, industry or company structure.

Collective bargaining wage scales essentially provide for a basic wage and other bonuses or supplements for each occupation or function group. Collective agreements also regularly include an entitlement to special payments. This specific remuneration (i.e. basic wage including bonuses, supplements, special payments, etc.) set out in collective agreements represents the minimum wage, to which employees have an absolute right. Employees may not be paid less than the minimum wage stipulated in the collective agreement; a higher wage may very well be stipulated in an employment contract. The collective agreement only specifies minimum standards.

If the agreed wage is higher than stipulated in the collective agreement, this is referred to as the actual wage (“IST-Gehalt”). The term overpayment (“Überzahlung”) refers to the difference between the actual wage and the minimum wage stipulated in the collective agreement.

Wage increases

Increases in the collectively agreed minimum wages are stipulated as part of collective bargaining between the trade unions and the employers' associations. These usually take place annually.

Remuneration

Concept of remuneration

Austrian labour law does not have a legal definition of the term "remuneration". According to established case law, remuneration is understood to mean all benefits granted to employees by employers for the provision of their labour.

The concept of remuneration includes all cash and non-cash benefits granted by employers to employees.

The remuneration includes especially

• Basic wage
• Special payments (holiday allowance and Christmas bonus)³⁾
• Allowances and bonuses (in particular overtime bonuses)
• Premiums
• Benefits in kind such as private use of the company car
• Commissions

³⁾There is no statutory entitlement to special payments. The entitlement, amount and due date of special payments are regulated in the collective agreement or, in some cases, in the employment contract.

Due date of the remuneration

Employers must pay white-collar workers (“Angestellte”) their monthly salary in two instalments on the 15th and last day of each month at the latest. However, it can be agreed that the entire monthly salary is to be paid on the last day of the month. Latter is stipulated in most collective agreements.

Blue-collar Workers' (“Arbeiter”) hourly wages must generally be paid at the end of each calendar week. However, many collective agreements contain deviating regulations.

Other forms of collective legal organisation

If there is no collective agreement, the minimum wage is based on the following instruments negotiated by the social partners, which apply directly and are legally binding:

• Statutes („Satzungen“)
• Minimum wage rates („Mindestlohntarife“)
• Homeworking rates („Heimarbeitstarife“)
• Apprentice income („Lehrlingseinkommen“)

In the few cases in which there is neither a collective agreement nor any other form of collective legal arrangement, employers owe employees appropriate or customary remuneration. This applies, for example, to employees in fitness centres (with the exception of apprentices, for whom an apprentice wage applies).

Enforcement

Employees can enforce their individual claims against employers by bringing an action before the labour and social court having jurisdiction (civil court proceedings). If, for example, employees have been paid too little, the outstanding wage can be claimed before the labour and social court, provided the claim is not time-barred or has lapsed.

The statutory limitation period for claims for remuneration under labour law is 3 years after the payment is due.

It should be noted whether the applicable collective agreement contains short expiry periods /forfeiture clauses (e.g. two months) for asserting labour law claims. Such a forfeiture period can also be agreed in the employment contract, provided that no statutory or collective agreement provisions are violated.

If employers fall below the minimum wage level stipulated in the collective agreement (underpayment), this is punishable under administrative criminal law.

If employees are dismissed because they assert claims against their employer, the dismissal can be contested on the grounds of a prohibited motive (protection against dismissal for motive; “Motivkündigungsschutz”).

The Chambers of Labour advise employees who are members of the Chamber in matters of labour and social law and provide them with legal protection by representing them in court in these matters in accordance with the relevant legal protection regulations. In this context, the Chambers of Labour can also intervene on behalf of employees in order to reach an out-of-court settlement with employers.

The Austrian Trade Union Federation (ÖGB) also provides its members with legal advice and, if necessary, legal protection.

You can find more information on legal enforcement here.

Sanctions

If employees successfully assert claims for remuneration, they are not only entitled to the underpaid amount, but also to interest. In accordance with § 49a of the Labour and Social Courts Act (Arbeits- und Sozialgerichtsgesetz, ASGG), the statutory interest rate for claims in connection with an employment relationship is 9.2 percent per year above the base interest rate applicable on the day after the due date.

The  Austrian Wage and Social Dumping Prevention Act, (Lohn- und Sozialdumping-Bekämpfungsgesetz, LSD-BG) is intended to ensure that all employees with their usual place of work in Austria have an absolute right to the remuneration to which they are entitled under the law, ordinance or collective agreement. This is to ensure equal pay conditions for all employees working in Austria.

The non-granting of minimum wage components to which employees are entitled by law, ordinance or collective agreement, in particular bonuses, supplements or special payments, constitutes an administrative offence pursuant to Section 29 LSD-BG. Underpayment of employees is generally punishable by a fine of up to EUR 50,000.

In order to ensure minimum wage entitlements and to better monitor compliance, there are extensive reporting obligations (see § 19 LSD-BG) and obligations to keep available reporting documents, social security documents, official authorisations and wage documents for employees posted or leased to Austria (see §§ 21, 21a and 22 LSD-BG). Violations of these obligations or acts of thwarting in connection with wage control are subject to considerable administrative penalties (see also here).

Further information

• Chamber of Labour and Employees
• Austrian Trade Union Federation
• Austrian Chamber of Agricultural Labour
• Austrian Chamber of Agriculture
• Austrian Federal Economic Chamber
• Company service portal