Employer & Employee Contributions
Employers are required to pay contributions to various social insurance programs, such as health insurance, accident insurance, and pension insurance. The amount of the contribution varies depending on the employee’s salary and the specific program.
Other Contributions
In addition to social insurance contributions, employees may also be required to pay other contributions, such as the Family Burdens Equalization Levy and the Municipal Tax. These contributions are used to fund various social programs and services.
Overall, Austria’s tax and social contribution system is complex and requires careful management and compliance. Employers and employees should be aware of their tax and social contribution obligations to avoid penalties and fines.
7. Severance and Termination Policies
Employment termination can be a challenging process for both employers and employees. In Austria, the termination of employment relationships is governed by the Labour Constitution Act (Arbeitsverfassungsgesetz) (ArbVG) and the Salaried Employee Act (Angestelltengesetz) (AngG). These laws provide guidelines for both white-collar and blue-collar workers, with different termination models for each.
Termination of Employment
Under Austrian law, an employment contract can be terminated by either the employer or the employee. During the probationary period, an employment contract may be terminated by either party without giving reasons. If the parties stipulate a probationary period, it must not exceed one month (apprenticeship: three months).
After the probationary period, an employer can terminate an employment contract for a valid reason, such as poor performance, misconduct, or redundancy. Termination for personal reasons, such as illness or retirement, is also possible. However, the employer must provide the employee with written notice of termination, which must include the reasons for the termination and the notice period.
Severance Pay
Austria’s labor laws do not require employers to provide severance pay to employees upon termination. However, collective agreements or individual employment contracts may provide for severance pay. If an employee is entitled to severance pay, the amount is usually based on the employee’s length of service and salary.
In cases of wrongful termination, an employee may be entitled to compensation. However, the burden of proof is on the employee to demonstrate that the employer did not have a valid reason for termination or did not follow the proper procedures.
Employers and employees in Austria should be familiar with the country’s labor laws and regulations regarding termination and severance pay. By following these guidelines, both parties can ensure a fair and legal termination process.