Since November 2023, employers have had to consider the amended legal provisions relating to parenthood, care and family hospice leave (KWR Blog from November 2023). Employment law changes which have a bearing on employers are planned in Austria for the beginning of 2024, too. We have summarised some important points for you below:
Reduction of pension contributions planned for retirees in gainful employment
In November 2023, the governing parties submitted a government bill whereby persons in retirement who receive a retirement pension while they continue to be gainfully employed or self-employed up to twice the marginal earnings threshold not have to pay full pension insurance contributions in 2024 and 2025 (expected marginal earnings threshold in 2024: EUR 518.44). Employers’ pension contributions are not affected by this and must therefore be paid in full!
This measure is intended to create an incentive for retirees to continue working during their retirement and thus counteract the shortage of skilled labour. The contributions which no longer need to be paid as a result are to be covered by the federal government from budget funds.
Planned exemption from taxes for cost of living bonuses
The tax-free cost of living bonuses created under legislation for the years 2022 and 2023 would expire at the end of this year. However, the Federal Minister of Finance recently announced in a press release that an extension of the tax-free cost of living bonuses for 2024 is possible if the social partners so wished.
No specific draft legislation has been put forward for the exemption. It is therefore not yet possible to make a reliable statement as to whether and to what extent or under what conditions the cost of living bonus will remain tax-exempt.
Payment of compensation for unused paid leave to marginal part-timers - full insurance?
If employment contracts of marginal part-timers are terminated and they have not used up all of the leave they are entitled to, compensation is due for unused paid leave. Up until now, administrative case law has said that an employment relationship remains marginal even if compensation for unused paid leave is paid out. This was justified by the fact that the pay threshold for marginal part-timers was solely based on the respective current salary.
However, the Austrian Supreme Administrative Court (VwGH) has now ruled that the payment of compensation for unused leave results in full insurance (see VwGH ruling Ra 2021/08/0127). According to the legal opinion of the Supreme Administrative Court, compensation for unused leave fall under the definition of remuneration in Section 49 of the General Social Insurance Act (ASVG) and would therefore extend the period of compulsory insurance by the period of leave the marginal part-timer would have been entitled to and is covered by the compensation payment. The compensation for unused leave must therefore be taken into account in the contribution base for the respective calendar months to which it is to be allocated in accordance with Section 11 par. 2 ASVG.
For valid reasons, the Austrian state health insurance institution ÖGK considers the ruling of the Supreme Administrative Court as a specific decision in an individual case which cannot be generalised.
The KWR Employment Law team will be happy to assist you with any questions you may have about the planned changes.