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Amendment to the Wage and Social Dumping Prevention Act

Human Resources Management & Labor Law
date icon 01. September 2021

As of today, adjustments to the EU Posting of Workers Directive apply and the strict penalty provisions are eased. The amendment to the Wage and Social Dumping Prevention Act (LSD-BG), which will come into force on 1.9.2021, contains various changes that should lead to an improvement in working conditions for posted workers:

  • For postings and transfers from the EEA or Switzerland to Austria for a period of more than one year (in justified cases: 18 months), Austrian labor law (i.e. laws, collective agreements, …) applies in full, provided this is more favorable than the corresponding ( applicable) regulations of the sending state
  • Framework reports for repeated postings / transfers are extended to 6 months.
  • Wage documents can also be kept in English.
  • Postings and leasing of higher-income workers to Austria are generally excluded from the LSD-BG (120% of the SV-HBG = € 6,600.00 for 2021).

Administrative penalties

Until now, administrative penalties for violations of formal regulations on the supply of labor or underpayment of wages could result in fines of up to millions of euros. According to a ruling by the European Court of Justice (ECJ), however, these penalty provisions are disproportionate and thus contrary to EU law. Therefore, in the future, there will only be a penalty of a maximum of € 20,000.00 for violations of reporting and stand-by obligations, regardless of the number of employees. In the case of thwarting actions in connection with wage control, the penalty will be a maximum of € 40,000.00. In the case of underpayment of wages, there will now be a penalty range in 5 levels. The penalty will be based on the amount of remuneration withheld and, in the case of the last level (up to € 400,000), also on the degree of culpability (intent)

For micro-enterprises with up to nine employees, the upper limit of the penalty range is reduced from € 50,000 to € 20,000 for serious cases (not repeat cases), if the sum of the withheld remuneration is also less than € 20,000. A lower penalty range is also to be assumed if the employer assists in establishing the truth, e.g. by providing documents.

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PS: Please note, that we are no native speakers and that our blogposts were translated with the help of google translate. 

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