New law sanctions private care services by foreign nationals

For cost-saving reasons, many older people in Austria engage illegal foreign workers for private nursing care at home. In order to legalise this work and to make care services more affordable, the parliament endorsed new legislation in July 2007. Thus, illegally operating care workers may now be employed under the terms of the Private Household Workers Act or be entitled to join the ranks of self-employed nurses. Trade unions have strongly criticised the new schemes.

In Austria, thousands of older people privately engage the services of illegal foreign workers for geriatric nursing purposes in the home. This is because they cannot afford to pay licensed professionals to provide such services. Currently, experts estimate that around 40,000 illegally operating foreign nursing staff offer their services to persons needing such care in the home. To remove the threat of immediate prosecution of the parties involved and thereby secure the existing care relationships, in the autumn of 2006, the then opposition Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) and the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP) agreed to temporarily legalise most of these illicit employment relationships (AT0701019I). This interim amnesty is a step towards the objective of completely reorganising the labour market in the field of private care services.

After several months of intense negotiations, the SPÖ-ÖVP coalition government formed in January 2007 agreed on a substantial reform of the private geriatric nursing system, which was endorsed by parliament on 4 July 2007.

New legislation

The new legislation provides for two distinct employment alternatives for those working as geriatric nurses. First, the person requiring care may employ one or two geriatric nurses under the terms of the pre-existing Private Household Workers Act (in German, 152Kb PDF) (Hausgehilfen- und Hausangestelltengesetz). Accordingly, the nurses shall work 14-day periods on a ‘permanent’ basis, allowing for a maximum of 64 ‘normal’ working hours a week and additional stand-by duties of up to 34 hours a week. If a person requires permanent care, two nurses a month offering their services alternately have to be employed.

Secondly, nurses have the option of becoming self-employed under the new legislation. This means that the individual has to apply for a trading licence and register with the Social Insurance Association for Entrepreneurs and Self-Employed Workers (Sozialversicherungsanstalt der gewerblichen Wirtschaft, SVA).

Both schemes are subsidised by the federal state. The first scheme based on regular employment provides for subsidies of up to €400 maximum per nurse each month, while the self-employment option provides for a maximum subsidy of €112.50 per self-employed nurse each month. The size of the subsidies depends on the extent of a person’s care needs. However, only persons requiring 24-hour stand-by care, and who do not possess assets – except their home – worth more than €5,000, can legally claim such subsidies.

According to estimates from the Federal Ministry of Social Affairs and Consumer Protection (Bundesministerium für Soziales und Konsumentenschutz, BMSK), effective monthly costs of the new 24-hour care schemes are expected to amount to €1,500–€2,000 in the case of self-employment and to €2,600–€2,850 for regular employment. The new legislation came into effect retrospectively on 1 July 2007 and will be binding from 1 January 2008, when the interim amnesty regulation will expire.

Criticism of new legislation

The new 24-hour care schemes received a mixed response from the political parties, as well as the two sides of industry. Whereas the business organisations largely welcomed the amendment, the opposition parties and trade unions have rejected the new regulations for a variety of reasons. First, they consider the cost of the schemes to be too high. Moreover, they argue that, if such care services continue to be unaffordable for the majority of people who require care, most of these people will continue to hire illegal care workers. Secondly, the terms of the applicable Private Household Workers Act are likely to further deteriorate the working conditions of most of the employees concerned, since they do not provide for sufficient rest periods. In addition, it remains unclear how the observance of the working time rules – in relation to the stand-by duties – shall be monitored.

As regards the lower-cost scheme based on self-employment, the trade unions claim that this will put pressure on existing collective agreements and working conditions, since neither collective arrangements nor working time legislation currently apply to self-employed persons. Moreover, this scheme is likely to further encourage the spread of ‘bogus’ self-employment (TN0205101S); this is because 14-day work periods on a permanent basis for one single person clearly constitute individual and economic dependence, which is not compatible with the principle of self-employment.

Georg Adam, Institute of Industrial Sociology, University of Vienna

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