Plan to extend unemployment insurance coverage to 'atypical' workers

In March 2002, the Austrian Minister for Economic and Labour Affairs issued proposals to extend unemployment insurance coverage to 'atypical' workers working either under a 'free-service contract' or a 'contract for work'- a group which has grown significantly over the past few years and now involves around 50,000 people . Currently, only dependent employees are subject to obligatory unemployment insurance and therefore entitled to receive unemployment benefit on losing their jobs.

On 30 March 2002, Martin Bartenstein, the Minister for Economic and Labour Affairs, announced his intention to extend unemployment insurance coverage to all 'dependent self-employed persons' and holders of 'free-service contracts' (Freier Dienstvertrag). People employed under a free-service contract are currently insured under the terms of the General Social Insurance Act (Allgemeines Sozialversicherungsgesetz, ASVG), while economically dependent holders of a 'contract for work' (Werkvertrag) (also referred to as 'Neue Selbständige') are dealt with like all other self-employed persons and therefore insured under the terms of the Social Insurance Act on Self-Employed Persons (Gewerbliches Sozialversicherungsgesetz, GSVG). While in 1998, both of these categories of worker were brought within full coverage of Austria's social insurance system (including state pensions), they are still not covered by unemployment insurance - only dependent employees are subject to obligatory unemployment insurance and therefore entitled to receive unemployment benefit on losing their jobs.

Over the past few years, the number of 'atypical' workers - both highly qualified persons with a high income as well as low-skilled, low-paid workers - has grown significantly. According to statistics provided by the Association of Social Security Providers (Hauptverband der Sozialversicherungsträger, HSV), the number of people employed under a free-service contract grew by more than 60% from 1998 to 2000, when it stood at 23,900. Women made up 48% of the people in these employment relationships, somewhat higher than their share in the dependent labour force (44%). The number of persons employed under a contract for work amounted to 13,400 in 2000, with women accounting for 41%. Since 2000, the number of workers in these forms of employment has further grown, reaching a total of about 50,000 in 2002. While this kind of employment relationship seems to occur in nearly all economic branches, the vast majority can be particularly found in the fields of journalism, scientific research, transportation industries and computing.

A recent study on 'atypical employment relationships', conducted by L&R Sozialforschung in cooperation with the Institute of Government at the University of Vienna and commissioned by the Ministry of Economic and Labour Affairs (Ministerium für Wirtschaft und Arbeit, BMWA), revealed that holders of contracts for work and free-service contracts face a higher-than-average risk of poverty. However, Minister Bartenstein denied any interrelation between the study and his recent proposal and referred to the fact that he announced his intention to extend unemployment insurance coverage to all self-employed persons one year previously. According to his proposal, self-employed persons should contribute 6% of their gross income to unemployment insurance in order to gain full protection against the risk of unemployment. While in the case of dependent employees, contributions are shared between employers and employees (3% each), it is not yet clear who will cover the unemployment insurance contributions for people working under a free-service contract.

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