Temporary work permits issued to illegal foreign care workers

In Austria, thousands of older people and those in need of care privately engage the services of illegal foreign workers for geriatric nursing and care purposes in the home; this is generally because they cannot afford to use licensed professional services. In the autumn of 2006, the then opposition Social Democratic Party (SPÖ) and the conservative People’s Party (ÖVP) agreed to temporarily legalise most of these illicit employment relationships, in a move which was welcomed by the social partners as a first step towards a re-organisation of the labour market in the area of private care services. However, the new SPÖ-ÖVP coalition government, formed in January 2007, has appeared divided so far in its proposals about how to draw up a sustainable reform of the private geriatric nursing system.

During the summer of 2006, a heated debate arose over the longstanding problem of increasing numbers of illegally operating foreign geriatric nurses working in Austria’s private households. The debate was fuelled when the then Chancellor of the Austrian People’s Party (Österreichische Volkspartei, ÖVP), Wolfgang Schüssel – who had previously attempted to play down the geriatric nursing problem – was forced to admit that his own mother-in-law was for some time being cared for by an illegal worker.

Geriatric care relies on illegal foreign workers

In practice, thousands of older people and those in need of care in Austria privately engage the services of illegal workers from abroad, mostly from the central and eastern European new Member States, for geriatric nursing services in the home. This is because many people cannot afford to pay licensed professionals providing such services. Older people, given that they are formally recognised as being in need of care, are entitled to claim a statutory nursing allowance of up to €1,563 per month, which is subject to the extent of their needs. This allowance, however, is often totally insufficient to meet the costs of care duties performed by licensed nursing personnel; for example, some people may require 24-hour stand-by care, which would prove very costly. Due to the consistent shortage of licensed and affordable mobile nursing staff, as well as stationary nursing places for elderly people, an informal nursing system has been in operation for some time. This comprises about 40,000 illegally operating care workers who work as geriatric nurses but often lack the relevant qualifications. These workers usually have to perform many specialised activities, such as medicinal provision and physical care, as well as housekeeping duties and providing a simple physical presence and company for the person in care. Many of these workers live in the same household as the person who is being cared for, receiving some form of ‘allowance’ rather than regular pay.

Unregulated market

Wages in the new EU Member States are, on average, about 60% to 80% lower than those paid in Austria; in addition, the unemployment rate remains high in these countries. At the same time, Austria suffers from a significant shortfall of permanent private care services. As a result, thousands of care workers, mostly women, from the central and eastern EU Member States are seeking nursing places in Austria; in turn, Austrian nationals in need of care services are in need of people providing affordable geriatric nursing and care services. However, since access to the Austrian labour market of employees from most of the new EU Member States is still restricted (AT0403201N), and the workers thus have to offer their services outside of the official labour market, there is often a lack of information between those supplying and those demanding such services. This lack of information contributes to the absence of a formal nursing market in Austria. As Stephan Schulmeister of the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO) explains, this is related to the fact that the market economy is not capable of providing for public goods, including the appropriate market conditions. If the state fails to provide for market conditions, as is the case in the field of nursing activities, private agents are likely to organise sub-markets, Mr Schulmeister argues.

Since both those in need of care and the illegal workers are dependent on private agents, the latter tend to charge some form of commission from both sides for their brokering activities, usually on a permanent basis for the duration of an employment relationship. In Austria, people seeking care services usually have to pay around €100 a month to the agent as a kind of ‘administration fee’, while illegally operating nurses must transfer between 20% and 30% of their earnings to the broker. If they refuse to do so, the nursing staff risk being exposed as illegal workers by the agents and eventually being expelled from the country.

WIFO proposals

In August 2006 – in an attempt to re-organise and legalise the Austrian private nursing system, without endangering the nationwide provision of affordable care services – Mr Schulmeister of WIFO suggested a series of measures, including the following main proposals:

  • The state in cooperation with the social partners should draw up binding rules for the organisation of nursing activities. These rules should stipulate minimum standards for nursing activities and skills, minimum pay for nurses, and costs for people in need of care services according to the extent of their needs. Moreover, these rules should list those public welfare organisations which are entitled to organise care services.
  • People in need of care services would notify one of these organisations about the extent of their needs, while potential geriatric nurses would notify the organisation of their willingness to work. The difference between total demand and domestic supply would be compensated by foreign personnel, in that the Labour Market Service (Arbeitsmarktservice, AMS) would grant some kind of fixed-term work permit for foreign nationals under the Aliens Employment Act (Ausländerbeschäftigungsgesetz, AuslBG (in German, 188Kb PDF)).
  • All nurses would be regularly employed by one of the selected organisations. Regular employment would ensure full standard social insurance coverage, preventing the establishment of any new form of atypical work.
  • Since the provision of appropriate care services for the Austrian population serves the public interest, and since a well organised, mobile care system is nevertheless cheaper than a stationary one, the federal state would contribute to the social costs on behalf of the nurses.
  • People requiring care services would receive the main proportion of their nursing allowance in the form of ‘nursing cheques’. These cheques would entitle them to purchase distinct ‘bundles’ of care services from one of the recognised organisations. This measure would ultimately terminate the brokers’ activities and thus directly channel such funds to finance nursing services.
  • At the request of the person seeking care services, care obligations could also be assumed by a relative. In such instances, the relative would be employed under the same terms and conditions as other employees and paid proportionally to the extent of work.
  • The quality of care would be monitored by the responsible organisation on a regular basis in order to avoid cases of neglect.

Position of social partners and political parties

The Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ), in line with the trade unions, has partially adopted Mr Schulmeister’s proposals, and demands the legal recognition of the new occupation of ‘care in the home’. Accordingly, the pay and employment conditions of the employees concerned should be regulated in a sector-related collective agreement, concluded between the relevant social partners. Workers who are currently operating illegally should be given the opportunity to be legally employed by one of the recognised welfare organisations, which would in turn be responsible for training their staff and monitoring the quality of services. The scheme should be jointly financed by the revised nursing allowance scheme and additional public means.

In contrast, the conservative ÖVP party, the junior partner of the SPÖ-ÖVP coalition government formed in January 2007, insists that any reform of the current nursing system should be cost neutral. In a draft reform proposal for Austria’s geriatric nursing system, the ÖVP recommends an extension of the coverage of the Private Household Workers Act (Hausgehilfen- und Hausangestelltengesetz) to geriatric nurses. Accordingly, tenders would serve over 14-day periods on a ‘permanent’ basis, allowing for a maximum of 64 ‘normal’ working hours per week and additional stand-by duties of up to 34 hours a week. However, since each person being cared for on a ‘permanent’ basis would have to engage two nurses per month offering their services alternately, monthly costs are expected to amount to at least €3,000–€4,000. According to the ÖVP draft, these costs should be borne almost exclusively by the people in care and their relatives; however, such services are not affordable to the majority of these people. In response, and given that the proposed working hours are widely considered as being unacceptable, the SPÖ, the Green Party (Die Grünen, GRÜNE), the trade unions and most of the welfare organisations have rejected the ÖVP’s draft reform proposal.

Meanwhile, the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKO) has reservations about the proposals, after its initial proposal of introducing a ‘nursing service cheque’, similar to the ‘household service cheque’ (AT0602202F), received no response. In accordance with the WKO’s proposal, people using nursing services would have to buy a special nursing cheque (including some social insurance contributions on behalf of the worker) prior to engaging the services of a private nurse, who – for their part – would then have to submit the cheque to a certain insurance association in order to receive cash in exchange. This cheque scheme is quite different from that proposed by the WIFO.

Interim legalisation

During the summer and autumn of 2006, public debate on the alleged illegality of the estimated 40,000 care relationships raised fears among both persons receiving such care services and foreign nursing staff. As a result, the then opposition SPÖ and the ÖVP agreed in October 2006 to temporarily legalise the foreign workers affected. Otherwise, the authorities would have been forced to continue the prosecution of the parties involved, which would have threatened the maintenance of many older people’s care services. In accordance with the SPÖ-ÖVP settlement, the Federal Ministry of Economy and Labour Affairs (Bundesministerium für Wirtschaft und Arbeit, BMWA) issued, on 25 October 2006, a decree providing for an interim exemption from the AuslBG of foreign private nursing staff from the new EU Member States, beginning on 1 November 2006. This means that all people from the new EU Member States employed by private persons for geriatric nursing purposes are entitled to obtain a legal employment status on a temporary basis, provided that the person under care shows a certain minimum need for care and that the tender is paid over and above a certain threshold, qualifying the worker for full social insurance protection. This regulation is deemed only as a first step, and it is planned that it will be replaced by a more comprehensive reform of the country’s private geriatric nursing system by the summer of 2007. The measure has been welcomed by both trade unions and employers.

Commentary

Currently, according to trade union estimates, about 80% of the several hundreds of thousands of older people requiring care services of some kind are being cared for by relatives, mostly by women. Demographic forecasts predict that the number of people who need some form of care will significantly increase within the next few decades (AT0312202F). Moreover, due to the increasing employment rates among women, the number of female relatives willing to take over care duties on behalf of family members will decrease. Hence, the number of licensed employees needed in the private geriatric nursing sector is expected to grow dramatically. In order to achieve further and continuous recruitment of personnel, clear-cut regulations in terms of professions, working conditions and (re)training schemes are required.

In this respect, the WIFO proposals formulated by Mr Schulmeister appear to be the most promising. Achieving the labour law aspects of these proposals without, in particular providing substantial additional funds (which is the ÖVP’s position), may meet the formal requirements; however, it is inevitable that a scheme which is not affordable to a large proportion of the population will fail to be successful. Experts agree that, unless additional public funds for the provision of private geriatric nursing services are secured, most care services will continue to be tendered outside of the official labour market by illegally operating foreign nationals.

Georg Adam, Institute of Industrial Sociology, University of Vienna

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