Amended Anti-Wage and Social Dumping Act

The amended Anti-Wage and Social Dumping Act (Lohn- und Sozialdumping-Bekämpfungsgesetz, LSD-BG), in force as of 1 September 2021, contains a variety of changes intended to improve working conditions for posted workers.

• Austrian employment law (acts of parliament and collective agreements) applies to inbound postings and secondments lasting a year or more (or in justified cases 18 months or more), as long as Austrian law is more favourable to the employee than the corresponding (i.e. applicable) regulations in the country from which the employee is posted.
• Accommodation provided for employees posted or seconded to Austria from another country must conform to the applicable provision of the Austrian Workplace Order (Arbeitsstättenverordnung).
• Postings and secondments of high earners to Austria are generally excluded from the provisions of the Act.

Cumulation of administrative fines
The previously prescribed cumulation of administrative fines for breaches of official regulations (such as obligations to report secondments) and for underpayment could, in extreme cases, lead to fines of millions of euros. The European Court of Justice has ruled that these penalty provisions are disproportionate and therefore in contravention of EU law. As a result, cumulation of fines no longer applies and fines will not be imposed per employee.
Instead, various ranges for fines (in five tiers) will apply. In determining the range of fines, the amount of remuneration withheld (damage) and, in the case of the highest tier (up to EUR 400,000), as an aggravating factor the degree of culpability (intentional commission of the offence) and the average amount of underpayment are taken into account.
For microbusinesses with up to nine employees, in serious cases (not repeated cases) the fine range upper limit is reduced from EUR 50,000 to EUR 20,000, if the total withheld remuneration is also less than EUR 20,000. If the employer cooperates promptly and fully in finding the truth, for instance by granting access to payroll accounting, the fine is reduced by applying up to the maximum penalty in the tier that is one level lower than the tier corresponding to the total amount of damage, unless the conditions are met for the highest tier, with an upper limit of EUR 400,000.