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Workforce Flexibility and Government Incentives in times of Covid-19 - Austria

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

  • Agreement on reduction of normal working hours
  • Agreement regarding consumption of time credits or outstanding holiday entitlements
  • Agreement of (unpaid) vacation/leave (Karenz)
  • Agreement on educational leave
  • Short-time work (Kurzarbeit), which is under certain conditions financially supported by the Federal Government

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

Short-time work is the temporary, non-seasonal reduction in working hours and pay due to economic difficulties in order to reduce personnel costs. Due to the current situation, the Austrian federal government, together with social partners, has developed a special short-time working model to overcome the corona crisis ("Corona short-time work"). The new rules entered into force on 16 March 2020.

According to the new model the working time of individual or all employees must be at least 10% during the entire short-time work period. It can also be reduced temporarily up to 0% provided at least 10% is reached in average. Companies can apply for short-time work for a maximum of three months. If necessary, a further extension of three months is possible after discussions between the social partners. After that, the regulation will cease to apply.

The working time performed is to be remunerated by the employer on a pro rata basis. The lost working time (i.e. the reduced hours) is compensated by the Public Employment Service Austria (AMS) by means of a short-time work allowance between 80% and 90% of the net remuneration of the employee before short time-work (net replacement rate) (limited with a maximum amount to be compensated).

Conditions for short-time work:

  • The Public Employment Service Austria ("AMS") must be informed immediately of any employment difficulties.
  • Short-time work must be agreed between the company and the employee. If a works council exists, this is done by means of a company agreement, otherwise by individual agreement with the concerned employees.
  • The agreement must be submitted to the social partners (in general Chamber of Commerce and competent specialist Trade Union) for signature. The social partners will sign the agreement within 48 hours as of the submission of the agreement.
  • An application for short-time work assistance must be submitted to the AMS.

For employees who are covered by short-time work, a payroll list must be submitted by the 28th of the following month. After the partial payroll has been submitted and checked, the short-time work allowance is paid retrospectively for each calendar month.

Please note the above might still be subject to changes.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

If the business operation is closed due to the newly implemented COVID-19 Measure Act (COVID-19-Maßnahmengesetz) in order to prevent the spreading of COVID-19, currently no special rules regarding reimbursement are foreseen. We understand that the business operation of Henry Schein in Austria is currently not shut down based on the COVID-19 Measures Act and the Regulation based thereon.

However, a COVID-19 Crisis Management Funds was installed which might provide for further compensation. However, details in this regard are not yet determined. Thus, changes might occur within the following days.

Moreover, tax deferrals may be requested at the competent tax authority. Within the application it must be made credible that the company is impacted by COVID-19.

Regarding short-time allowance, we refer to question 1.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

Please find our answers in 1. and 2.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Please find our answers in 1. and 2.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 27 March 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.