24 and 31 December
In Austria Christmas is traditionally celebrated on Christmas Eve (24 December), hence before 25 December, and many employees will be eager to prepare for their New Year’s Parties on 31 December. This means employers are often uncertain about how to handle those days. Although neither the 24 nor the 31 December are national holidays, many Austrian collective bargaining agreements (CBA) stipulate that these days are holidays, either a full day, or starting at noon. As the Austrian Holiday Act does not provide for the possibility of taking less than one full vacation day, employees would basically need to take a full vacation day, even if according to the CBA they only need to work until noon, unless agreed otherwise. Employees therefore usually try to agree on compensatory time off, which is granted for specific hours (instead of full days).
In some companies, the days around the Christmas holidays (Christmas season) are less productive, as there are many bank holidays and many employees take additional vacation days. It is therefore common for employers to consider establishing an organisation-wide holiday at Christmas time. However, this is not a unilateral option for employers. Legally, employees need to give their consent individually to an organisation holiday suggested by the employer. This means that if organisations want to introduce a Christmas holiday, they should start planning for this on time and if possible, put this in the employment agreements of the employees affected. These agreements are basically enforceable as long as the determined organisation holiday does not exceed two weeks per holiday year.
Merry Christmas: employee benefits not subject to income tax or contributions
As a ‘thank you’ to their employees, employers often grant them ‘Christmas benefits’. This is not only a great incentive and motivator for employees, but it also brings tax benefits with it. A company event (such as a Christmas party) is tax free for costs up to EUR 365 per employee per year; material benefits (such as Christmas presents) are tax free for costs up to EUR 186 per employee per year. Future security benefits granted by the employer (e.g. endowment and death insurance, health insurance, shares in pension investment funds or pension fund contributions) are basically tax free for costs up to EUR 300 per employee per year. So before the year comes to an end, employers are recommended to think about tax-advantageous employee benefits that benefit the company as well.
Check overtime worked
For employees who have an all-in contract or a flat-rate overtime agreement (Überstundenpauschale), a working time check must be carried out at the end of the calendar year (if no shorter averaging period has been agreed). The amount of the flat-rate overtime must not be less than the remuneration that would be due for the employee’s actual overtime performance. If the amount of overtime hours is not covered by the flat-rate payment, the employee is entitled to remuneration for the overtime, provided that the employer was aware of the overtime hours or at least tolerated them.
To avoid possible fines (according to the Anti-Wage and Social Dumping Act) and further negative consequences in connection with a possible ‘underpayment’ employers should actively check overtime worked and pay any difference between agreed flat rate and overtime worked on their own initiative (before an inspection by the relevant authorities takes place).
Adapt to new collective bargaining agreements
New collective bargaining agreements usually come into force on 1 January each year. Employers are therefore urged to check at the end of the year whether any salary adjustments or other amendments are necessary in the new year for employees who are paid according to the minimum collective wage or are generally due based on actual wage increases and new rules in the respective collective bargaining agreement. Apart from the increase in salary rates (which is often between 1.5% and 2.5%) employers should also check additional adaptions made to the collective bargaining agreement (such as the recognition of prior years of service, allowances, regulations regarding apprentices etc.). A summary of the novelties resulting from the most recent collective bargaining negotiations of the relevant CBA can be found on the website of the Austrian Chamber of Commerce.