What are the rules applying to annual leave and the holiday pay fund for employees who are posted or hired out to Austria?
Why are posting undertakings included in the Austrian holiday pay fund procedure at all?
EU legislation such as the Posting of Workers Directive 96/71/EC, adopted in 1996, requires EU Member States to ensure that employees who are posted to work within a specific country’s territory receive the same minimum amount of annual leave as employees who normally work in that country.
Austrian provisions on the posting and cross-border hiring out of employees require posting undertakings to grant their employees at a minimum the amount of paid annual leave that is to be granted pursuant to Austrian law.
Special rules governing annual leave exist for the construction sector in Austria.
These special rules are based on the experience that employment relationships at construction works are prone to heavy fluctuation and frequent interruptions.
To ensure that construction workers are also able to take annual leave and to accumulate the minimum periods of employment required, the holiday pay fund procedure has been enshrined in Austrian law since 1946.
This procedure is also to be applied to cases of cross-border posting and hiring-out of workers to Austria.
The annual leave supplements that posting undertakings are obligated to pay to the Austrian Construction Workers' Holiday and Severance Pay Fund (BUAK) are used to cover the annual leave pay entitlements that workers acquire who are posted or hired out to Austria.
How do construction employees posted or hired out to Austria acquire annual leave entitlement?
When posted or hired out to Austria, workers acquire a proportionate share of annual leave beginning with the first day of employment.
The amount of annual leave entitlement increases in proportion to the period of employment in Austria.
The amount of annual leave entitlement accrued depends on the number of ‘qualification weeks’ accumulated by the employee.
One qualification week corresponds to one calendar week in which the employee works five days.
Annual leave entitlement can be claimed from the BUAK only for the qualification periods for which the employer paid annual leave supplements to the BUAK.
Employees can accumulate a maximum of up to 25 working days of annual leave entitlement each calendar year (i.e. 52 qualification weeks).
Employees can accumulate a maximum of up to 30 working days of annual leave entitlement after 1150 weeks of employment. Periods of employment in the construction sector in other countries are also counted if evidence thereof can be provided (more detailed information in the menu item Construction – cross border deployment).
The BUAK issues the employer with a monthly payment order, indicating the current amount of annual leave days and entitlement to annual leave pay.
The employee additionally receives a quarterly statement indicating the employment periods registered with the BUAK and the annual leave entitlement accruing from those periods.
The actual amount of annual leave to which a given employee is entitled is determined by totalling the number of qualification weeks, irrespective of the undertaking where the entitlement was acquired.
This allows employees to collect the qualification weeks required for annual leave entitlement with several different businesses, each independent from the others. Employees can subsequently take holidays at any business, regardless of the time of employment with that company.
How does the Austrian holiday pay fund procedure work?
These are the features of the Austrian holiday pay fund system:
Employees in the construction sector receive benefits based on statutory annual leave entitlement only from the Construction Workers’ Holiday and Severance Pay Fund (BUAK) and not from their employer in the individual case.
Employees accordingly have a claim to annual leave with the BUAK and not with their employers, the BUAK pays out benefits.
Employers in turn remit the monthly wage supplements (referred to as annual leave supplements) to the BUAK, in this way contributing to funding for their employees’ annual leave entitlements.
Based on the monthly reports submitted by the employers, the BUAK calculates the annual leave supplements and issues a corresponding payment order to employers.
For workers employed in Austria, annual leave entitlement accrues, after the annual leave supplements are paid, in proportion to the employment period and beginning with the first day of work. Annual leave entitlement increases on a daily basis.
The amount of supplement per day is determined based on the employee’s type of work and the currently applicable hourly wage as stipulated by collective agreement.
The equation below is used to calculate the supplement for all businesses:
(Collective agreement wage + 20%) x factor / 5
The Austrian Ministry of Social Affairs specifies the factor in regulation specifically issued. The magnitude of the factor depends on the normal weekly working time as stipulated by collective agreement. It is currently
• for 40.0 hours: 11.85
• for 39.0 hours: 11.55
• for less than 39.0 hours: 11.40
Posted or hired-out workers come under the Austrian holiday pay fund procedure even when covered by a social insurance scheme in their home country during the posting.
You will find details on registration for social insurance and on obligations to provide documents relating to social insurance in the section entitled ‘Formal requirements’, under the menu item Registration for social insurance.