COVID-19 short-time work scheme

A new short-time work model came into effect (phase 7), with a return to a model resembling the pre-pandemic one. As of 1 October 2023,the employer benefit (as before the COVID-19 crisis) is based on the pro rata unemployment benefit.

The current short-time work model was extended to 30 September 2023.

In December 2022, the continuation of the Corona short-time work model (phase 6) was announced, in principle prolonging by six months to 30 June 2023 the (comparatively restrictive) regulations of the previous phase.

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.

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).

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).

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.

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.

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.

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.