Austria: How social protection rules affect self-employed and independent contractors

The social protection of people in non-standard forms of employment has been a political issue in Austria since the mid-1990s. Non-standard workers have been integrated into the general social insurance system through a series of reforms, with the declared goal of preventing evasion from compulsory insurance and integrating all types of earned income from employment into social security. These reforms are likely to have contributed to a substantial reduction in the number of independent contractors. However, the number of self-employed tradespeople and of so-called “new self-employed” continued to rise and there are some indications that this to some degree compensated for the reduction in the number of independent contractors. Tradespeople and the new self-employed in most cases benefit from lower statutory insurance contributions than for those in standard dependent employment, which may imply a financial incentive to opt for these forms of employment. Furthermore, the lack of unemployment insurance coverage, in the case of self-employed people, and comparatively low employment stability and often low incomes, in the case of self-employed people and independent contractors, increase the likelihood that people in these types of employment later become (partly) dependent on tax-financed basic financial security