Austria: Employment trend - Four-day workweek

By redistributing working time, employers gain a competitive advantage

In brief

In many countries, the trend of the four-day workweek is nothing new; now this trend has finally reached Austria. The benefits are obvious: employers can increase their appeal on the labor market and attract promising talent. 


Contents

The four-day workweek model — a success story

We have summarized the most important facts about the four-day workweek for you as follows:

  1. What is it about?

Within the framework of a four-day workweek, an employee's weekly working hours are evenly distributed over four days per week. Employees, thus, benefit from a three-day period off work. This enables a good work-life balance, reduces stress and increases employees' health, motivation and productivity.

  1. How can companies implement a four-day workweek and what do they need to consider?

In companies with a works council, a works council agreement is required for implementing the four-day workweek. In companies without a works council, individual consent has to be obtained. However, there is no "one-size-fits-all" model for the four-day workweek. Instead, companies have a variety of alternatives for implementing the four-day workweek.

  1. What kind of four-day workweek models are there?

Model No. 1 | Redistributing working time without reducing working hours and remuneration: The company redistributes the previous normal weekly working hours (usually 38.5 to 40 hours) from five to four days while remuneration remains the same. In this case, a daily normal working time of up to 10 hours and a maximum daily working time of up to 12 hours is possible. In this respect, overtime hours occur from the 11th working hour per day or the 40th working hour per week. In this variant, the daily workload is above average, which can somewhat reduce the positive effects of the four-day workweek.

Model No. 2 | Redistributing working time while reducing working hours but avoiding pay cuts: In order to fully exploit the positive effects of the four-day workweek, many companies reduce the normal weekly working hours to 37 or fewer, enabling a daily working time of 7.5 to 8.5 hours per day. However, many companies refrain from reducing the current remuneration despite the reduction in working hours. Personnel costs per worker will indeed increase in this case. Nevertheless, these are offset in the long term by increasing productivity.

Model No. 3 | Redistributing working time while reducing working hours and pay: This model implements Model No. 2 with regard to working hours, but also introduces a reduction in fixed salary. In this alternative, employers should consider compensating employees with special incentives, e.g., by introducing variable bonuses linked to specific performance targets that increase productivity. This promotes employee motivation despite short-term financial losses in fixed pay.

Model No. 4 | Flexi-time variant: A four-day workweek can also be accomplished by implementing flexi-time. In this respect, the flexi-time agreement will limit any core working time regulations to four days (e.g., Monday to Thursday) while in parallel enabling flexi-time days. In this case, the fifth day of the week (e.g., Friday or Monday) is considered a working day, but employees are actually not working on their flexi-time day. Under such conditions, even normal working hours of up to 12 hours per day are fairly permissible. The flexi-time agreement may be designed in such a way that employees themselves are free to choose each workweek whether they work four or five days.

  1. All-in-salary and four-day workweek

An all-in-salary considers and compensates a certain amount of overtime hours, usually based on a five-day workweek. In terms of a four-day workweek, as the daily workload is already very high, employees may be less willing or able to perform those overtime hours originally considered part of their salary package. Consequently, the pressing question is: how will companies deal with all-in salaries when implementing a four-day workweek? There are several alternatives, which range from reducing or canceling the all-in-salary to agreeing on a simple lump sum payment for overtime hours. However, even if the all-in-salary remains the same, there are certain options to mitigate a mismatch between pay and productivity after all, such as the introduction of targeted performance management tools and bonus models.

Conclusion

More and more companies are implementing the four-day workweek. In doing so, companies are enjoying a strong competitive advantage on the labor market. We at Baker McKenzie are very happy to advise and support you in identifying and implementing the four-day workweek model that is most beneficial for your company.

Click here to access the German version.


Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.