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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure AT-2020-10/229 Updated – measures in Austria

COVID-19 short-time work scheme

Corona Kurzarbeit

Country Austria , applies nationwide
Time period Temporary, 01 March 2020 – 31 December 2022
Context COVID-19
Type Tripartite agreements
Category Employment protection and retention
– Income support for people in employment (e.g., short-time work)
Author Bernadette Allinger (Forba) and Eurofound
Measure added 31 March 2020 (updated 06 June 2022)
Related ERM support instrument

Background information

Short-time work enables working hours to be reduced within a company during temporary economic difficulties. Short-time work has been a well established crisis measure for a long time and was last used to a great extent during the 2008/09 financial crisis, alleviating the economic downturn to quite some extent. See for example a Eurofound report from 2010 .

Content of measure

A short-time work scheme applies if a company temporarily reduces the working time. In order to prevent dismissals and to protect businesses and employees from negative economic and social impacts of COVID-19, social partners (Chamber of Labour, Trade Unions, Economic Chamber) negotiated the current scheme.

Working hours of employees can be reduced up to zero hours keeping full / almost full pay. The employer only pays for the actual working time.

Reduced working hours: The reduced standard working hours must be on average between 10% and 90% of the collectively agreed working hours (this applies to (pre-short-time work) full-time workers, an aliquot reduction applies to employees who were on part-time before short-time work). A new aspect of this is that it may temporarily also be set at zero. Thus, for instance, in the context of a short-time working period of six weeks, it may be set at 0% for five weeks (i.e. no work will take place, and for one week at 60%). Another important point to note is that, in some business sectors, the agreement on short-time work may also include overtime.

For persons with a disability (registered disabled persons according to the Act on the Employment of People with Disabilities (BEinstG), a special job security subsidy applies when making use of the PES' short-time work model. The employers are reimbursed for the remaining wage costs after deduction of the PES short-time work subsidy for the duration of the short-time work. Prerequisites are an application for short-time work (even retroactive) by 30 June 2020 and the existence of a degree of disability of at least 50% (notice of assessment), as well as no existing wage subsidies for the disabled person concerned.

Updates

The following updates to this measure have been made after it came into effect.

24 May 2022

In May 2022, it was announced that the current model of the short-time working scheme (which otherwise would have expired by 30 June) will be extended until the end of 2022, but with some new elements applying from 1 July onwards.

Every company that intends to make use of the measure from 1 July on must notify the responsible regional PES office at least three weeks before the planned start. A consultative process needs to be taken, in which is checked whether the short-time work can be averted by other suitable measures (e.g. use of vacation days, time credits,...). The previous amount of the aid, including a deductible of 15% remains in place.

22 November 2021

Upon the implementation of another lockdown in Austria in November 2021 (with some regional variations in the length of the lockdown), the social partners agreed to a joint package of measures with the federal government:

  • The increased subsidy (100%) which is currently available in phase V to companies that are particularly affected by COVID-19 (i.e. companies directly affected by the entry ban or companies with a 50% decline in sales in the 3rd quarter of 2020 compared to 2019) is extended from 31 December 2021 to 31 March 2022. It is also available to all companies directly affected by the latest lockdown.
  • Short-time work can be implemented for a maximum of 24 months; it ends for companies that have been on short-time work since the onset of the crisis (March 2020) with 31 March 2022.
  • Extension of the application period (initial requests and extension requests): Short-time work that starts during a lock-down can be submitted up to 28 days retrospectively from the start of the short-time work period. Due to regional variations in the end dates of the lock-down, the latest days of applications vary (between 8 and 16 January 2022).

The duration of the run-time of short-time work has remained at 30 June 2022 (see update from 7 June 2021).

07 June 2021

Upon the expiration of the short-time work scheme "phase IV" (see update from 17 February 2021), the social partners and government negotiated the extension into "phase V" via two different models:

  • Model 1: This model applies to companies which have been hit especially hard by the COVID-19 pandemic (e.g. night gastronomy, conference business), i.e. companies affected by lockdowns or official/legal measures or companies which recorded a decline in sales of at least 50% in the 3rd quarter of 2020 compared to the 3rd quarter of 2019. The minimum working hours must lie at 30% of the previously (i.e. before short-time work was applied) worked hours (with exceptions in individual cases). Employees in these companies continue to receive 80 to 90% of their previous net income. This model runs until December 2021.
  • Model 2: This model is considered a 'transition model' and applies to all other companies which are still negatively concerned by the COVID-19 pandemic and are in need of shortening employees' working hours. The minimum working time lies at 50% of the previously worked hours (30% in exceptional cases, to be decided on an individual basis), employees receive 80 to 90% of their former net income. Companies will have to pay 15% of the funding themselves (this is a novelty). For both models, for each two months of short-time work, one week of annually vacation must be used up. An individual company may make use of short-time work for a total of 24 months.

This model has a run time of mid-2022 (possibly to be prolonged upon evaluation).

17 February 2021

On 17 February 2021, the social partners announced their agreement on the extension of short-time work for another three months ("phase IV" from 1 April to 30 June 2021). In principle, the same regulations that have applied in phase III remain in place, with a reduction of working time to between 30 and 80% of the original working hours. In businesses which are concerned by government-imposed closings (gastronomy, tourisms), a shortfall of the 30% is allowed. Further training is to be actively encouraged by the social partners and the PES; companies are reimbursed 60% of the training measures again (as in phase III).

Before the end of phase IV, further social partner talks will be held, to negotiate on a gradual exit from short-time work and/or an adapted offer to maintain employment, depending on the health and labour market situation then.

02 November 2020

Additions to the existing phase III of the short-time work scheme were added in November 2020 (retroactively from 1 November onwards) due to a second (followed by a third) lockdown in effect:

  • The minimum working time of 30% of the previous normal working time (phase III) which has been required since 1 October, has been reduced. Companies which are legally required to close their business due to the lockdown can reduce the working hours to 0 for the duration of the lockdown(s).
  • The guaranteed net replacement rate is not reduced by this change.
  • Employees on short-time work in companies that are directly affected by the lockdown and that are covered by a gratuity regulation of flat-rate tips (according to specific NACE sectors, including accommodation, food services, other health care, hairdressing and beauty salons, massage centers and other service activities) will receive €100 net per month for for the duration of the lockdown.
  • For apprentices on short-time work, there is no training obligation during phases of a lockdown.
29 July 2020

On 29 July 2020, the social partners agreed with the federal government on the extension of short-time work for a further six months ("phase III"), starting on 1 October 2020 until 31 March 2021. Phase III foresees several changes to the previous regulation for phase I (1 March until 31 May 2020) and phase II (1 June until 30 September 2020):

  • An economic justification (annex 1 to the social partner agreement) is needed. In addition to a justification, the supplement must state (among other issues): whether other subsidies have been granted; the sales development before short-time work; and a sales forecast for the period of short-time work applied for. If short-time work is requested for more than five employees, the confirmation of a tax adviser or accountant or auditor is needed.
  • The range of working hours has been changed and now needs to lie between on average between 30% and 80% of the contractually worked hours before short-time work within the six months duration of short-time work (i.e. fluctuations between the months are allowed). A higher reduction in working hours may be approved for companies that are particularly affected.
  • Employees must be ready to engage in further training or education at the employer's request and if the employer offers it. The employer must pay 40% of the costs, the rest (60%) is paid by the PES. Time used for education/training counts as working time for the employee, and as downtime for employers, i.e. they are paid by the PES for those hours. Further training measures can be interrupted if required by the company but may be taken at a later point in time (within 18 months).
  • The remuneration (80%/85%/90%) remains unchanged, but wage increases provided for in the collective agreement or individual salary advances are to be taken into account.
25 May 2020

The Austrian social partners negotiated a new agreement which extends the Corona short-time work measure for another three months ("phase II"). Following the gradual relaunch of work, companies can now increase their working time without having to alter their short-time working request; they can also return to full activity for a short temporary period without having to exit the scheme; on call-work is expressly prohibited; a new and simplified method for calculation ensures that employees get paid for the work actually done in short-time work (in the previous version some employees faced pay disadvantages since the actual time they worked did not affect the pay determination); the requirement to retain employment numbers continues, but the agreement clarifies and simplifies rules concerning information of the trade union or the PES regional advisory board when the retention requirement after the period of short-time work ceases to apply. The new agreement was approved by the Austrian government.

Use of measure

As of 14 April 2020, short-time work applications have been made for the jobs of 608,607 people, in mid-May, over 1.3 million people were on short-time work.

The funds have been increased several times, from originally €3 billion to currently (mid-June) €12 billion in mid-May.

The Federal Ministry for Labour, Family and Youth maintains a regularly updated webpage on labour market statistics , which keeps track of the number of people currently in short-time work. Peak numbers were reached during three weeks in May, during which time more than 1.3 million people were on short-time work. Numbers remained above 400,000 during the summer months and declined to 290,696 on 28 September 2020.

On 6 October 2020, according to a newspaper article by 'DiePresse', the financial police had carried out inspections in 13,829 companies for a total of 6,145 hours, primarily to check compliance with the short-time working rules. In sum, there were much fewer violations than initially feared, but an increase of other violations.

On 21 December 2020, 400,479 persons were on short-time work, in January 2021 around 470,000 persons were registered for short-time work and in February 2021 around 496,000 (according to official AMS data).

In 2021, the number of persons on short-time work have decreased. Latest data from 5 October 2021 show that 67,773 persons are currently registered for short-time work. This includes anticipated delivery bottlenecks in the automotive supplier industry.

By mid-September 2021, 296,075 applications for short-time work have been approved (including extensions). These include 118,206 companies and 1,289,042 employees and a funding volume of €10.3 billion. Thus far (mid-September), €9.3 billion have been paid.

According to a report by the labour minister to the parliamentary committee of social affairs, the government expenditure for short-time work amounted to €9.56 billion from March 2020 to the end of March 2022. Including outstanding obligations, the budget would amount to about €11.31 billion.

Contents

  • Employment retention
  • Income protection

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Agreed (outcome) incl. social partner initiative
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The measure is based on a social partner agreement.

Views and reactions

The social partners are supportive of the measure.

Sources

  • 26 March 2020: WKO Fact Sheet Corona short-time work (Corona-Kurzarbeit – Betriebe sichern, Arbeitsplätze erhalten) (www.wko.at)
  • 31 March 2020: Federal Ministry of Labor, Family and Youth, FAQ short-time work (Bundesministerium für Arbeit, Familie und Jugend, FAQ Kurzarbeit) (www.bmafj.gv.at)
  • 14 April 2020: 608 000 short time work applications, funds increased from 3 to 5 bio euros (www.derstandard.at)
  • 25 May 2020: Changes to short-time corona work from 1 June 2020 (www.wko.at)
  • 30 September 2020: Short-time work phase III (www.wko.at)
  • 30 September 2020: Changes in the social partner agreement phase III (www.wko.at)
  • 02 November 2020: Important information about the COVID-19 short-time work allowance Short-time work phase 3 (www.ams.at)
  • 17 February 2021: WKO - Short time work phase IV (news.wko.at)
  • 17 February 2021: Short-time work phase IV - ÖGB (www.oegb.at)
  • 07 June 2021: Corona Short-time work phase V (news.wko.at)
  • 01 October 2021: Current numbers for short-time work applications (www.wienerzeitung.at)
  • 05 October 2021: Unemployment figures below pre-Covid level (oesterreich.orf.at)
  • 24 May 2022: Short-time work extended until the end of 2022 (news.wko.at)

Citation

Eurofound (2020), COVID-19 short-time work scheme, measure AT-2020-10/229 (measures in Austria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/AT-2020-10_229.html

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