Bonus-malus for older workers: firms that cut staff over 60 should pay

Bonus-malus for older workers: firms that cut staff over 60 should pay Austria plans a bonus-malus system for older workers: firms with no employees over 60 would pay 15% of average annual pay per missing person. Start 2027. Topics: News, Labor Market, Economy.

Austria is heading toward a reckoning over how it treats its oldest employees. AK (Arbeiterkammer — the Chamber of Labour) and ÖGB (the Austrian Trade Union Federation) have presented a bonus-malus model targeting companies that quietly push out staff aged over 60. Their argument is blunt: in more than every fourth company with 20 or more employees, not a single worker is over 60 — while the country struggles with a skilled-labor shortage. Losing a job at that age often means years of unemployment before retirement. Here is how the proposed system of rewards and penalties would work, what non-compliant firms would pay, and when it could take effect.

What the numbers show: every fourth firm employs no one over 60

The starting point is bleak. According to AK, more than 25% of companies with 20 or more employees have nobody over 60 on payroll. Women fare even worse: 61.6% of firms employ no woman over that age, as the ÖGB points out.

Losing a job at this age means long-term exclusion from the labor market. Unemployed people aged 60 to 64 stay registered with AMS (the Public Employment Service) for an average of 451 days — compared with 182 days for prime-age workers. The overall picture is worsening too: in October, 389,941 people were unemployed or in training, and the fastest-growing group was the over-50s at +4.4% year-on-year, Der Standard reports.

How the bonus-malus system for older workers would work

The model by AK and ÖGB applies only to companies with 20 or more employees — small businesses are exempt. The key metric is the share of workers aged 60 to 64 on staff. 21 industries would get their own target quotas, rising step by step: a construction site and a bank are simply not comparable workplaces.

The logic works in both directions. Firms that beat their industry quota receive bonuses from a bonus fund. Companies with too few older employees pay a compensation levy — 15% of the average annual salary in that firm for every missing worker over 60. Under the model calculation, that amounts to roughly 615 euros per month for each missing position.

What a firm would pay: the hotel example

AK offers a concrete calculation. A hotel with 50 employees must have at least two workers aged 60–64 when first checked in 2028. If it has none and the average annual salary in the firm is 20,500 euros, the levy comes to 6,150 euros per year — about 513 euros a month.

The idea is anything but niche. According to ÖGB’s model, Austria is currently missing 36,087 jobs for older workers. 8,909 companies would exceed their quota and earn bonuses; 9,760 firms would miss it and pay. The theoretical levy revenue adds up to 266.4 million euros a year.

The money would be split in half. One half would feed the bonus fund, financing ergonomic workplaces, retraining and age-friendly working conditions. The other half would go to AMS for employment projects and the reintegration of older jobseekers — 133 million euros for each side of the model.

Workers shouldn’t have to adapt to a labor market that sorts them out at 55 or 60 — employers must finally take responsibility. Those who dodge it will have to contribute.

— Wolfgang Katzian, President of the Austrian Trade Union Federation (ÖGB)

Timeline: when the system starts and what happens first

The plan foresees a start in 2027. Companies would get one year to prepare: the quota for 2027 would first be checked in 2028, and that is when the first payments would fall due. Annual checks would follow — by 2031, firms are expected to meet the quota set for 2030.

For employees the implication is simple: retaining experienced staff would finally pay off better than dismissing them. Older jobseekers would get a realistic shot at employment instead of years of being parked at AMS. The broader backdrop of this debate — how the pension system itself works — is covered in our guide to the Austrian pension model.

Why the debate is really about pensions and rising unemployment

AK and ÖGB are answering two problems at once: a skilled-labor shortage on one side, and fast-growing unemployment among the over-50s on the other. Dismissing an older employee hurts the person and the social system alike — hundreds of millions of euros flow into benefits and lost contributions every year. We recently showed what layoffs look like in practice in our piece on Raiffeisen’s mass job cuts.

Notably, AK and ÖGB firmly reject raising the statutory retirement age: the actual age at which Austrians retire is already rising. Their position is that jobs for those who want to work until 65 must come first. The unions also remind the government of its coalition program, which promised incentives for older employees. AK President Renate Anderl puts it even more bluntly: whoever has no job at 60 will not find one at 67 either. For the practical side of losing a job, see our explainer on the AMS repayment error.

Frequently Asked Questions

What is the bonus-malus system for older workers? It is a system of incentives for companies proposed by AK and ÖGB. Firms with more than 20 employees would have to keep the share of workers aged 60–64 at their industry’s quota level: exceed it and you get a bonus, miss it and you pay.

Which companies would have to pay? Only companies with 20 or more employees whose share of 60–64-year-old staff is below the industry quota. ÖGB counts 9,760 such firms, with 36,087 jobs for older workers missing nationwide.

How large would the penalty be? 15% of the firm’s average annual salary for every missing worker over 60. On average that is about 615 euros per month; for a hotel with 50 staff, roughly 6,150 euros per year.

When would the system take effect? The plan is to start in 2027, with the first quota checks in 2028 and annual reviews afterwards. For now it remains a proposal: the government still has to introduce legislation.

What this means for workers over 55

The model is not yet law, but the direction of the debate is clear: responsibility for sidelining older workers is set to shift toward employers. What you can do right now:

• If you are 55+ and lose your job, register with AMS immediately: unemployment spells at 60 average 451 days.
• Follow the legislative process — if adopted, employers will start treating older staff differently.
• Planning to work after retirement? Read our guides on working while drawing a pension in Austria and earning on top of your pension in 2026.
• Want to understand how your pension is calculated? Start with our breakdown of the Austrian pension model.

The bonus-malus for older workers is the first systemic answer to a practice that leaves thousands of experienced employees stranded a few years before retirement. To catch the moment the proposal becomes law, subscribe to our newsletter.