Austrian Social Committee Approves New Protections for Freelance Workers

The Austrian Social Committee has unanimously endorsed a legislative initiative aimed at enhancing protections for freelance workers, introducing new termination rules and paving the way for collective bargaining agreements. This move is designed to establish clearer employment standards and address longstanding concerns about the vulnerability of individuals in freelance contracts.

Under the newly proposed measures, freelance contracts will now be subject to defined termination periods and dates. Both contracting parties will be able to end an agreement by providing notice within a set timeframe: a standard four-week notice period, extending to six weeks after two years of service. The first month of employment will serve as a probationary period. Terminations will be permitted on either the 15th or the final day of any month, though more favorable terms for the worker may also be agreed upon.

A significant aspect of the reform is the extension of the Austrian Labour Constitution Act to include freelance workers. This will make it possible for organizations representing freelance workers to negotiate collective agreements. Such agreements can be tailored specifically for freelancers or could see them included in existing contracts, provided the relevant parties agree to the necessary amendments. However, there will be no legal obligation to include freelance workers in every collective agreement.

Additional amendments require that newly contracted freelance workers, after the law comes into effect, be informed about the specific rules and minimum wage tariffs applicable to them, including collective agreements or statutory provisions. The minimum wage established by collective bargaining will be applied only to the hours worked to fulfill the contract. The scope for concluding collective agreements will also be expanded, allowing not just statutory representatives but also public legal entities, associations, and employers to participate.

Lawmakers across the political spectrum expressed support for the initiative as a step toward improving working conditions for freelance employees. While some political parties voiced reservations about the freelance contract model itself--arguing it can sometimes be used to bypass standard labor protections--they acknowledged the importance of providing greater rights and certainty for those working under such arrangements.

The Minister of Labour and Social Affairs highlighted the significance of these changes, noting recent high-profile cases in which large numbers of employees were reclassified as freelancers, often resulting in reduced job security and benefits. The new rules, set to take effect in January 2026, are intended to curb such practices and ensure better protection for those in non-traditional employment relationships.

Other proposals discussed in the committee, such as the inclusion of freelance workers in works councils, the implementation of an EU directive on platform work, and stricter measures against fraudulent companies, were deferred for further consideration. Lawmakers from the governing coalition argued that ongoing negotiations and the preparation of broader legislative packages addressing labor rights and fraud prevention are still underway.

The committee also reviewed a recent report from the financial police regarding wage and social dumping by foreign firms operating in Austria. In 2024, authorities inspected over 1,200 foreign businesses, checking more than 4,000 posted or leased workers. Approximately 8% were found to be underpaid, with the highest incidences in Upper Austria, followed by Lower Austria and Styria. These inspections led to hundreds of administrative penalties and millions of euros in fines. Despite narrowly missing its annual inspection target, the financial police reported a significant increase in enforcement actions compared to previous years. Sectors such as construction, security services, hospitality, and delivery services were identified as having higher risks of labor law violations.

Officials from the fraud prevention office indicated that, while they currently have sufficient staff to meet their targets, they remain vigilant and adapt their approach in response to emerging risks and trends. Ongoing discussions in the Social Committee signal a continued focus on combating wage and social fraud, improving labor standards, and ensuring fair treatment for all types of workers in Austria.