Austria's 2025 Labor Law Updates: Key Reforms and Practical Guidance

As of 2025, Austria has introduced a series of significant updates to its labor regulations, reflecting evolving workplace dynamics, digital transformation, and growing emphasis on employee well-being. These changes impact employers across sectors, particularly those with international operations or remote teams. This article outlines the core legislative developments, provides actionable implementation steps, and highlights critical considerations for compliance.

Major Changes in Austria’s 2025 Labor Legislation

The Austrian Ministry of Labour and Social Affairs rolled out amendments to the Arbeitsverfassungsgesetz (ArbVG) and the Angestelltengesetz (AngG), focusing on flexible work arrangements, digital rights, and enhanced worker protections. Key reforms include:

• Expansion of the right to remote work under certain conditions
• Introduction of 'right to disconnect' legislation
• Strengthened anti-discrimination measures covering gender identity and neurodiversity
• New rules on algorithmic management transparency
• Mandatory psychosocial risk assessments in workplaces with over 50 employees

Remote Work and Flexible Arrangements

Employees now have the legal right to request remote or hybrid work models if their role permits. Employers must respond within four weeks and justify any rejection based on operational necessity. A new Telework Agreement Template is required to formalize working conditions, including data protection, equipment provision, and working hours monitoring.

Case Example: A Vienna-based tech firm recently adjusted its HR policy to allow three remote days per week after an employee petition. The company adopted standardized digital logs to track productivity without infringing on privacy—aligning with the 2025 Data Transparency Directive.

Right to Disconnect: Protecting Employee Downtime

To combat burnout, Austrian law now mandates that employers establish clear boundaries for after-hours communication. Workers cannot be penalized for not responding to emails or messages outside contracted hours unless prior agreement exists for on-call duties. Companies must publish internal policies outlining expected response times and emergency protocols.

Best Practice: Multinational firms like Borealis and Verbund have implemented AI-driven messaging filters that delay non-urgent notifications until business hours, reducing after-work interruptions by up to 68%.

Algorithmic Management and Digital Monitoring

With increased use of performance tracking software, the 2025 update requires employers to disclose how algorithms assess employee performance. Workers have the right to access their data profiles and challenge automated decisions affecting promotions, bonuses, or terminations.

Employers using tools such as workforce analytics platforms must conduct annual audits and register these systems with the Austrian Data Protection Authority (DPA).

Psychosocial Risk Assessments

Organizations with more than 50 staff must perform documented risk assessments addressing stress, harassment, and mental health risks. These evaluations should be reviewed annually and involve employee representatives. Failure to comply may result in fines of up to €10,000 per incident.

TIP: Use standardized questionnaires developed by AUVA (Austrian Workers’ Compensation Board) and integrate findings into existing occupational safety programs.

Anti-Discrimination Enhancements

The Equal Treatment Act (Gleichbehandlungsgesetz) now explicitly includes protection against bias related to neurological differences (e.g., ADHD, autism) and gender expression. Employers must provide reasonable accommodations and report diversity metrics annually to the Federal Equality Commission.

Step-by-Step Compliance Guide for Employers

1. Review current employment contracts and update them to reflect 2025 standards
2. Develop or revise internal telework and digital conduct policies
3. Conduct mandatory psychosocial risk assessments by Q2 2025
4. Register all algorithmic management tools with the DPA
5. Train HR teams and managers on updated anti-discrimination guidelines
6. Implement transparent performance evaluation processes involving human oversight
7. Appoint a Digital Rights Officer in companies with over 100 employees

CriticalNotes (Key Considerations)

• Ensure cross-border consistency: For multinational employers, align Austrian-specific policies with EU-wide frameworks such as the EU Work-Life Balance Directive.
• Document all employee requests and employer responses regarding remote work to avoid disputes.
• Avoid blanket surveillance; monitoring must be proportionate, purpose-limited, and disclosed.
• Engage works councils early when introducing new digital tools or restructuring workflows.
• Regularly audit third-party HR tech providers for compliance with Austrian law.

SailGlobal offers specialized advisory services for international businesses navigating Austria’s evolving labor landscape, including compliance audits, policy drafting, and expatriate workforce management.

Conclusion

Austria’s 2025 labor reforms underscore a progressive shift toward humane, transparent, and digitally responsible workplaces. Proactive adaptation will not only ensure legal compliance but also enhance employee trust and organizational resilience. By integrating these regulatory updates into strategic HR planning, employers can build future-ready, inclusive work environments.