Austria: Latest working life developments – Q4 2016

Real wage increases of up to 1% under negotiation in the annual bargaining rounds, trends in income for the period 2014-2015 including widening of the gender pay gap, and reform of the Trade Act are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the fourth quarter of 2016.

Collective agreements renewed

Traditionally, autumn marks the start of the annual wage bargaining rounds in Austria. Collective agreements and wage increases were negotiated – among others – in the influential metal industry sector, the large retail sector, in the public sector (where wages are set by law but are preceded by informal collective bargaining), in temporary agency work and in several branches of the agricultural and food industries. Nominal wage increases of 1%–2% were negotiated, which correspond to around 1% in real terms, correcting for the inflation rate. In the metalworking industry, which covers about 180,000 employees, actual and minimum nominal wage increases of 1.68%, on average, were negotiated, putting the new sectoral monthly minimum wage at €1,785.03. In the retail sector, collective agreements show a minimum wage increase of 1.3% for the 120,000 blue-collar workers and progressive increases of 1.33% on average for the 400,000 white-collar employees, bringing the monthly minimum wage to €1,500.

Income report highlights gender pay gap

Shortly before Christmas, the Austrian Court of Audit published its bi-annual General Income Report on the incomes of the Austrian population in 2014 and 2015. The report contains the average income by gender, sector, occupational group and function. It shows that the median real incomes (that is, incomes corrected for inflation) decreased by 3.5% between 1998 and 2015. The pay gap increased sharply within this period. While incomes of the top 10% of earners have increased by 4.3%, they have decreased by 35.1% among the lowest 10% of earners. This effect can be partially attributed to the increase in part-time work, as those numbers are not corrected for working time. Excluding seasonal and part-time workers, the real incomes of full-time workers increased between 2004 and 2015 by 10.8% among women and by 3.9% among men. Austria’s gender pay gap is still the second largest within the EU, with full-time employed women earning a gross annual income (median) in 2015 of €35,023 and men earning €42,364. However, no gender-specific income disadvantage can be observed among career public servants.

Equal Pay Day was celebrated on 11 October. It marks the day on which male workers, on average, have earned the average annual income of female workers, in other words, from this day onwards, women work for nothing. Even though several measures have been implemented in order to reduce the gender wage gap in recent years, there is no comprehensive strategy, which means only very small improvements can be observed.

Reform of Austrian Trade Act

The federal coalition government has agreed to liberalise the Austrian Trade Act (Gewerbeordnung). The Act is the most important regulatory instrument for trades and businesses. It distinguishes between:

  • regulated trades (around 80), for which a certificate of qualification is needed in order to start a business;
  • semi-trades (for which a simplified proof of qualification is needed);
  • associated trades (which may be carried out without the need for an additional certificate of qualification if the business activities are associated with another trade);
  • non-regulated ‘free’ trades (around 440).

A draft bill has been issued, the most important change being the dismantling of the 21 semi-trades (see Regulation on semi-trades, §1 for a list of all semi-trades), changing the vast majority of them into free trades, meaning that qualifications no longer need be presented. This includes trades such as clothing alteration, cemetery gardening, manicure or bicycle technology. Furthermore, business registrations are to become exempt from federal fees and administrative charges, bringing a cost-saving for future entrepreneurs. The draft bill has been assessed by various political players and is due to be passed in Parliament in the first quarter of 2017 (with possible alterations).

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