In certain sectors, freelancers make up a comparatively large proportion of the workforce, for example, in the health and social services sector as well as in IT and media industries. The advantages for companies and freelancers are essentially that freelancers can organize their work freely and can also have someone substitute for them; companies are relatively flexible when it comes to terminating the contract.

As of January 1, 2026, new legal provisions for freelance contracts will come into force, which will play a major role in the future when considering which form of employment to choose.

Freelance Contract

The legal classification of freelancers can cause difficulties in practice as the freelance contract is not legally regulated as a contract type. A freelance contract generally can be identified when a person provides work for the contracting partner within the framework of a continuing obligation (unlike work contracts, which establish an obligation to achieve a specific result), without being personally dependent on them — as is the case with genuine employees — and without possessing significant personal operating resources.

Freelancers are classified as self-employed; however, this does not mean that they are economically independent. Rather, freelancers — like genuine employees — are economically dependent on their contracting partner and are therefore to be classified between genuine employees and contractors with work contracts.

Freelancers perform their work without being bound by instructions or organizationally integrated into the business. In return, protective standards typical for employees, such as a minimum wage, recreational leave, or protection against dismissal, do not (yet) apply to freelancers.

Current Legal Situation

Since the freelance contract is not an employment contract due to the freelancer's lack of personal dependence, many labor law standards do not generally apply to these contractual relationships. However, freelancers are not completely without protection. Some labor law provisions already apply directly to freelance contracts, such as the right to be issued a written statement of terms and conditions (“Dienstzettel”) or the securing of outstanding claims against insolvent employers. Furthermore, provisions of labor law that do not hinge on the personal dependency of the employee and are intended to protect the socially weaker party are to be applied analogously to the freelance contract.

Legal Situation as of January 1, 2026

Until now, a key characteristic of freelance contracts was that they were not covered by the scope of collective agreements and that no special statutory notice periods applied.

With the federal law that amends the General Civil Code (“ABGB”), the Labor Constitution Act (“ArbVG”), and the Agricultural Labor Act 2021, special notice periods for freelancers will be incorporated into the ABGB on the one hand, and on the other hand — by extending the scope of application of the ArbVG to freelancers — the possibility will be created to apply collective agreements to freelance contracts.

However, the extension of the scope of the ArbVG to freelancers is not intended to create a new definition of 'employee' in the sense of the ArbVG; rather, the existing scope is to be expanded to include the group of freelancers. Thus, on the one hand, collective agreements can in the future also be concluded for freelancers, and on the other hand, the scope of existing collective agreements can be extended to freelancers.

This means that minimum wages and special payments stipulated by collective agreements would also apply to freelancers. The scope of most labor laws will not include freelancers, so regulations in collective agreements that refer to these laws — such as regulations from the Vacation Act or the Working Time Act — will continue to not be applicable to freelancers. However, the parties to the collective agreement could explicitly agree on corresponding regulations for freelancers. Therefore, companies will — in addition to observing minimum wages and special payments from collective agreements — always have to check whether the applicable collective agreement contains specific regulations for freelancers.

Furthermore, specific notice periods for freelancers will be incorporated into the ABGB. This means less flexibility for companies in terminating freelance contracts.

The amendment to the ArbVG is scheduled to come into force on January 1, 2026. The scope of collective agreements valid at the time of the amendment's entry into force will remain unaffected, meaning the scope of existing collective agreements will not automatically be extended to include freelancers. However, companies that employ freelancers should in any case monitor if and which collective agreements will become applicable to their freelancers in the future.

Outlook

The upcoming legal changes for freelancers from 2026 are expected to bring comprehensive changes in how freelance contracts are handled. Companies will have to deal with these changes and incorporate them into their assessment of the attractiveness of freelance contracts.