Labor Law Changes 2026

Improvement of the legal status of freelancers (freie Dienstnehmer:innen)

As of January 1, 2026, comprehensive legislative changes entered into force, aimed at establishing legal certainty and achieving extensive parity between freelancers and regular employees (echte Dienstnehmer:innen). The new regulations are intended to reduce the attractiveness of employing individuals on the basis of a freelance contract (freier Dienstvertrag) as a means of circumventing labor law provisions.

The legislative amendment applies exclusively to freelancers within the meaning of Section 4 para 4 General Social Insurance Act (Allgemeines Sozialversicherungsgesetz, ASVG), while independent contractors under the Social Insurance Act for the Self-Employed (Gewerbliches Sozialversicherungsgesetz, GSVG) remain unaffected.

Termination provisions

Freelancers are not statutorily regulated under general labor law. Due to the lack of statutory termination provisions, it was previously necessary to contractually agree upon reasonable notice periods.

With this legislative amendment, unilaterally mandatory termination provisions for freelancers have been established for the first time. Indefinite independent employment relationships can now be terminated as of the 15th or the last day of a calendar month, subject to a four-week notice period, which increases to six weeks after the second year of service. Furthermore, the first month may be agreed upon as a probationary period, during which the freelance contract may be terminated at any time with immediate effect.

Collective bargaining agreements

From now on, it is possible to conclude specific collective bargaining agreements for freelancers, to expressly include them in existing collective bargaining agreements, or to issue minimum wage tariffs. It should be noted, however, that this does not establish an obligation to conclude or include freelancers in collective bargaining agreements.

Correspondingly, freelancers must be informed of the norms of collective provisions applicable to them through appropriate disclosures in the service note (Dienstzettel) or the freelance contract.

New regulations on educational leave (Bildungskarenz) – continuing education period (Weiterbildungszeit)

The continuing education allowance (Weiterbildungsgeld), which was abolished in March 2025, was replaced on January 1, 2026, by a comprehensive successor regulation. The central element of the new continuing education period is the Public Employment Service (Arbeitsmarktservice, AMS) continuing education subsidy (AMS-Weiterbildungsbeihilfe), which, unlike the previous regulation, is structured as an AMS grant without a legal entitlement. Simultaneously, new minimum requirements, proof of success, and reporting obligations were introduced to increase the effectiveness of the measure and better reach individuals with lower formal qualifications.

Under labor law, the possibility to agree on educational leave or part-time educational leave (Bildungsteilzeit) remains. However, the validity of such an agreement is now contingent upon the approval of the continuing education subsidy by the AMS.

A prerequisite for agreeing on an educational measure is an uninterrupted period of at least twelve months of employment, subject to unemployment insurance, with the current employer. Linking an educational measure directly to the receipt of maternity benefit (Wochengeld) or childcare allowance (Kinderbetreuungsgeld) is excluded. Educational leave can henceforth only be agreed upon for a duration of at least two months up to a maximum of one year.

Finally, employers are required to provide an employer subsidy (Dienstgeberzuschuss) to the continuing education subsidy once certain salary thresholds are exceeded.

Introduction of the new partial pension and reform of part-time work for older employees (Altersteilzeit, ATZ)

With the new Partial Pension Act (Teilpensionsgesetz), the legislator is implementing various measures to increase the actual retirement age, create incentives for longer labor market participation, and strengthen the financial stability of the pension system. The primary foundation is the introduction of the new partial pension and the reform of part-time work for older employees as of January 1, 2026.

Partial pension

The newly created partial pension constitutes a genuine pension benefit that can be drawn in parallel with remaining part-time employment. This results in a combination of part-time remuneration and a partial pension.

Insured persons who meet the requirements for any type of old-age pension can choose in the future whether to draw a regular or early pension in full, defer retirement, or apply for a partial pension. The essential requirements for receiving a partial pension are a reduction in working hours between 25 % and 75 %, a corresponding agreement with the employer, and the existence of employment that triggers compulsory pension insurance.

The amount of the partial pension is based on general calculation rules and depends on the extent of the reduction in working hours. The partial pension lapses if self-employed activity triggering compulsory insurance is commenced, if income above the marginal earnings threshold (Geringfügigkeitsgrenze) is earned, or if the required working time reduction is undershot by more than 10 %. Upon reaching the statutory retirement age, the partial pension automatically converts into the regular old-age pension, the amount of which will be recalculated.

For the duration of the partial pension, there is also a right to refuse mandated extra hours or overtime, as these could lead to an impermissible exceedance of the required working time reduction.

Part-time work for older employees

In addition to aligning ATZ with the new partial pension, it is being comprehensively reformed and subjected to several restrictions.

There will be a phased reduction of the maximum duration of ATZ agreements from five years to a maximum of three years. In the future, ATZ can only be utilized prior to corridor pensions or the statutory retirement age. From the point at which an entitlement to a partial pension exists, the ATZ allowance shall generally be discontinued. Furthermore, the employment periods required for access to ATZ will be gradually increased.

If an employee takes up employment with another employer during ATZ that was not regularly performed in the year prior to the commencement of the term, the entitlement to the ATZ allowance lapses. Consequently, the employer will not receive ATZ allowance for those months in which employment is pursued with another employer, meaning the employee loses the wage compensation (Lohnausgleich). As of January 1, 2026, this prohibition on dual employment applies to both new and existing ATZ agreements, with a transition period for agreements already in progress.

Furthermore, the previous possibility for the employer to receive 100 % reimbursement from the AMS for the wage compensation and the proportional social insurance contributions has been abolished.

Implementation of the EU Pay Transparency Directive in Austria

EU Member States are required to transpose the EU Directive to strengthen the application of the principle of equal pay for men and women for equal work or work of equal value (EU Pay Transparency Directive), issued in June 2023, into national law by June 7, 2026.

Although a national draft bill is currently unavailable in Austria, it is recommended to use the time until the final national implementation in 2026 to engage early with the EU Pay Transparency Directive and the resulting consequences for one's own company.

Legal certainty regarding notice periods for seasonal businesses (Saisonbetriebe)

In 2021, notice periods for blue-collar workers and salaried employees were aligned, whereby deviating regulations can be made via collective bargaining agreement for industries with a predominant seasonal character. In practice, this exemption led to significant difficulties in interpretation, particularly regarding the covered industries and the requirement for social partners to conclude new agreements.

In a now-passed legislative amendment, the National Council (Nationalrat) has stipulated that only those industries are exempt from the general notice periods of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB) for which express collective bargaining agreement regulations were made between January 1, 2018, and June 30, 2025. Collective bargaining agreements concluded earlier will lose their validity. Moreover, changes to these regulations are only permissible if they favour the affected employees. Crucially, notice periods agreed upon in collective bargaining agreements may not fall below one week in the future, and the requirement of being a seasonal industry (Saisonbranche) is abolished.

Finally, the amendment anchors a prohibition of discrimination (Benachteiligungsverbot) in the Law amending the Employment Contract Law (Arbeitsvertragsrechts-Anpassungsgesetz, AVRAG), which protects employees who challenge collective underpayment from dismissal, termination with notice, or other disadvantages.