Austria's Minimum Wage: Is It Enough?

Austria does not have a federally mandated minimum wage. Instead, minimum pay is determined through collective bargaining agreements (CBAs) between trade unions and employers' associations. These agreements are established almost exclusively at the sectoral level and cover around 98% of workers in Austria. As a result of these agreements, there is effectively a minimum wage in Austria of €1,500 per month, which came into effect on July 1, 2020. This minimum wage covers basic salary, overtime payments, bonuses, and idle-time compensation. However, certain costs, such as tax-free per-diems, housing, transportation, and meal expenses, do not count towards the minimum wage.

Austria's minimum wage in 2024 is €1,766.92 per month before tax

Austria does not have a statutory minimum wage. Instead, minimum wages are established through collective bargaining agreements (CBAs) between trade unions and employers' associations. These agreements are almost exclusively made at the sectoral level.

• Restaurant servers/delivery/cleaning/security guards: €2,025 - €2,070
• Logistics/packaging/maintenance: €2,055 - €2,143
• Drivers (vehicles weight max 3.5 t, cranes, forklift)/metal sorters: €2,130 - €2,245
• Drivers (trucks over 3.5 t and tractors): €2,190 - €2,325
• Certified drivers/trained professionals/metal cutters: €2,225 - €2,365

Most agreements factor in 14 paychecks a year instead of 12, which includes extra bonuses given in June and December. So, in practice, the minimum monthly pay in Austria totals around €2,020.

While there is no federal minimum wage, in January 2017, the Austrian government asked social partners to negotiate a minimum wage that would apply to all industries in the country. This resulted in a minimum wage of €1,500 a month, which was implemented by sectoral collective agreements by 2020. This minimum wage covers basic salary, overtime payments, bonuses, and idle-time compensation.

In Austria, around 98% of workers are covered by collective agreements. The Labour Constitution Act stipulates that these agreements can regulate "the mutual rights and obligations of employers and employees arising from the employment relationship." This includes the employee's obligation to work and the employer's obligation to pay wages and provide care.

The Austrian Trade Union Federation (ÖGB) and the Federal Economic Chamber (WKO) are the two main organisations involved in determining minimum wages through collective agreements.

There is no statutory minimum wage in Austria

Austria does not have a statutory minimum wage. Instead, minimum pay is determined through collective bargaining agreements (CBAs) between trade unions and employers' associations. These CBAs are almost exclusively made at the sectoral level.

In 2017, the Austrian government asked social partners to negotiate a minimum wage that would apply to all industries in the country. This led to the creation of sectoral collective agreements by four main social partner organisations: the Austrian Trade Union Federation, the Federal Economic Chamber, the Austrian Chamber of Agriculture, and another unstated organisation. These agreements established a minimum wage of €1,500 per month, which came into effect on 1 July 2020. This minimum wage covers basic salary, overtime payments, bonuses, and idle-time compensation.

While there is no federal minimum wage, workers in Austria are still protected. Over the last few years, a series of collective bargaining agreements have essentially enforced a base rate for salaries, which functions as a minimum wage. The exact amount varies based on factors like industry, occupation, age, experience, and region. This ensures fairness of starting salaries depending on the complexity of the job. For example, in some fields, the minimum wage is higher:

• Drivers of vehicles weighing over 3.5 tonnes, cranes, and forklifts: €2,130 - €2,245
• Drivers of trucks over 3.5 tonnes and tractors: €2,190 - €2,325
• Certified drivers, trained professionals, and metal cutters: €2,225 - €2,365

In most industries, remuneration for apprentices is also regulated via collective agreements. If there is no collective agreement, the Federal Conciliation Office can set the remuneration for apprentices. The Federal Conciliation Office also sets the wage rates for piece workers, who are financially dependent on those who buy their goods.

Minimum pay is determined through collective bargaining agreements

Austria does not have a statutory minimum wage. Instead, minimum wages are determined through collective bargaining agreements between trade unions and associations representing employers. These agreements are concluded between employers' representatives and employees' representatives who have the capacity to enter into such agreements. The Labour Constitution Act stipulates that these collective agreements can regulate the mutual rights and obligations of employers and employees, including the obligation to work and the obligation to pay wages and provide care.

The capacity to conclude collective agreements lies with statutory interest groups of employers and employees, including the Chamber of Labour (representing employees), the Federal Economic Chamber, and the chambers of liberal professions (e.g. doctors and lawyers). These groups must be independent of their negotiating partners and responsible for regulating working conditions. In addition, the Federal Arbitration Office can grant the capacity to conclude collective agreements to voluntary professional associations of employers and employees and certain other associations.

The collective bargaining process generally takes place at the industry level and is coordinated within and between sectors. While it typically occurs annually, in specific circumstances (such as the COVID-19 pandemic), bi-annual agreements have been concluded in some sectors. The agreements cover various aspects, including minimum wages, salary increases, working hours, overtime supplements, allowances, and annual leave.

The applicable collective bargaining agreement determines the legal framework for minimum wages, salary increases, working hours, and dismissals or terminations. Around 98% of employees in the private sector are covered by a collective bargaining agreement. While these agreements form the basis for minimum wages, employees can sometimes negotiate additional pay and benefits based on their qualifications and professional experience.

The current minimum wage in Austria, as of July 1, 2020, is €1,500 per month. This minimum wage was established through sectoral collective agreements by four main social partner organizations: the Austrian Trade Union Federation, the Federal Economic Chamber, the Austrian Chamber of Agriculture, and others.

The Austrian government asked social partners to negotiate a minimum wage for all industries in 2017

In 2017, Austria did not have a statutory minimum wage. Instead, minimum wages were established through collective agreements, usually at the sectoral level. While this meant that there was no official minimum wage, these collective agreements effectively functioned as a minimum wage.

In January 2017, the Austrian government asked social partners to negotiate a minimum wage that would apply to all industries in the country. This was a response to the lack of a federal minimum wage and an attempt to standardise wages across all sectors. The four main social partner organisations were:

• Austrian Trade Union Federation (ÖGB)
• Chamber of Labour (AK)
• Federal Economic Chamber (WKÖ)
• Austrian Chamber of Agriculture (LKÖ)

These social partners presented a minimum wage of €1,500 per month at a press conference on 30 June 2017. They announced that this minimum wage would be implemented by sectoral collective agreements by 2020, with each sector following its own timeline. This minimum wage included basic salary, overtime payments, bonuses, and idle-time compensation.

The Austrian government's intervention was necessary as there was a risk of the government legislating a minimum wage if the social partners could not come to an agreement. This intervention ensured that the social partners, who are usually responsible for agreeing on wage policy, could continue to do so without government interference.

The minimum wage in Austria is now on par with other Western European countries

Austria does not have a statutory minimum wage, but workers' rights are protected through collective agreements. These are negotiated between employers' and employees' representatives, and cover almost all workers in the country. In 2017, the Austrian government asked social partners to negotiate a minimum wage that would apply across all industries. This resulted in a de facto minimum wage of €1,500 per month, which came into effect in July 2020. This minimum wage covers basic salary, overtime payments, bonuses, and idle-time compensation.

The minimum wage in Austria is set through collective agreements, which are negotiated between employers' and employees' representatives. These agreements cover a wide range of issues, including wages, working conditions, and other benefits. The agreements are legally binding and create binding law for the employers and employees covered by them. The Labour Constitution Act stipulates that collective agreements can regulate the mutual rights and obligations of employers and employees arising from the employment relationship. This includes the employee's obligation to work and the employer's obligation to pay wages and provide care.

The process of setting the minimum wage through collective bargaining generally takes place at the industry level and is well-coordinated within and between sectors. It usually occurs annually, but in specific circumstances, such as economic instability, it may take place bi-annually. The metalworking industry often takes a leading role in wage negotiations, and its agreements often mark one of the highest increases compared to other sectors due to the relative strength of the metalworkers' trade unions.

While the minimum wage in Austria is now on par with other Western European countries, there are still some exclusions and variations. For example, tax-free per-diems, housing, transportation, and meal costs don't count towards the minimum wage. Additionally, certain work functions, such as attending business meetings and conferences, don't entitle employees to extra benefits beyond the minimum wage.

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