Competitive distortion caused by undeclared work and social fraud affect all industries including construction. To combat this, BUAK is consistently working on strengthening their measures against various forms of social fraud.
Wage and social dumping
The Anti-Wage and Social Dumping Act [Lohn- und Sozialdumping-Bekämpfungsgesetz] (LSD-BG) came into effect on 1 May 2011. BUAK is the supervisory body for all employees who are subject to the Construction Workers’ Annual Leave and Severance Pay Act [Bauarbeiter-Urlaubs- und Abfertigungsgesetz] (BUAG). As such, it is authorised to conduct inspections in the construction industry (at construction sites and in payroll offices), and to file complaints with the responsible district administrative authority when violations are detected.
The administrative offence of underpayment applies equally to both foreign-registered and Austrian employers. This is because the purpose of LSD-BG is to achieve equal employment market and wage conditions for all employees working in Austria. LSD-BG also aims to ensure fair competition between the companies on the market, as well as the proper payment of fees and social security contributions.
For more details, see Wage and social dumping.
Whether a person is considered an employee or an independent contractor is determined on the basis of the actual economic situation as part of an overall assessment. Various criteria are examined including the person’s obligation to follow instructions and their integration into the company. If BUAK determines that a person is in a dependent employment situation according to legal criteria, supplements are calculated and charged pursuant to BUAG.
2011 BUAG amendment — Construction site database
On 27 July 2011, the Austrian National Council passed an amendment to BUAG allowing for the creation of a construction site database. This database is to provide quick and transparent information about start and end dates for every construction site in Austria. This gives users significantly faster access to information about the location and start dates of construction projects, and allows for inspections – as long as the construction site still exists and there are employees on-site.
In unclear cases, employees are invited to a meeting at BUAK to clarify any ambiguous situations. Inspectors check directly at the construction site whether an employment contract has been reported to BUAK. Through targeted collection and further processing of this information, BUAK is contributing to social fraud prevention.