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Hire Employees in Austria

Austria is an attractive location for businesses looking to expand their operations. With a highly skilled workforce and a business-friendly environment, Austria offers many growth opportunities. However, hiring employees in Austria can be complex, with various legal and regulatory requirements that must be met. Understanding Austrian employment law is essential for any business looking to hire employees. Employers must comply with various regulations related to employment contracts, working hours, leave, compensation, and benefits. They must also ensure they meet their tax and insurance obligations, which can be complex and time-consuming.

Key Takeaways

  • Understanding Austrian employment law is essential for any business looking to hire employees in the country.
  • The hiring process in Austria involves obtaining work permits and residence permits for foreign workers and complying with a range of regulations related to employment contracts, working hours, leave, compensation, and benefits.
  • Employer of record services can help businesses navigate the complex legal and regulatory landscape in Austria.

The hiring process in Austria involves several steps, including obtaining work permits and residence permits for foreign workers. Employers must also ensure that they have appropriate employment contracts in place and that they comply with all relevant regulations related to working hours, leave, and compensation. It is also important to consider the services of an employer of record, which can help businesses navigate the complex legal and regulatory landscape in Austria.

Understanding Austrian Employment Law

Austrian employment law provides broad protection and rights for employees, similar to most members of the European Union. The most important areas of Austrian labor law are codified in a wealth of diversified statutes and in-depth regulations. There is no single statute governing all aspects of individual and collective employment law in Austria.

The Austrian Settlement and Residence Act (Niederlassungs- und Aufenthaltsgesetz) regulates the employment of foreign nationals in Austria. It sets out the conditions for obtaining a work permit, which is required for non-EU citizens to work in Austria. EU citizens do not require a work permit but must register with the authorities.

Austria has a strong tradition of collective bargaining, and many workers are covered by collective agreements that set out their terms and conditions of employment. These agreements are negotiated between employers’ associations and trade unions.

Employment contracts in Austria must be in writing and signed by both parties. The contract must contain certain minimum information, including the job title, start date, duration of the contract, and salary. The contract may be for a fixed term or indefinite, but if it is for a fixed term, it must be for a legitimate reason, such as a specific project or a temporary replacement.

Austrian labor laws provide for a minimum wage, which is adjusted annually. The current minimum wage is €9.60 per hour. Employers must also pay social security contributions and provide health insurance for their employees. Salaries in Austria are paid 14 times a year, with the 13th and 14th months paid at the end of June and November, respectively.

Understanding Austrian employment law is crucial for any employer looking to hire employees in Austria. It is important to comply with the relevant labor laws and regulations, including the Austrian Settlement and Residence Act, and to negotiate collective agreements where applicable.

Hiring Process in Austria

Hiring employees in Austria requires following the country’s employment laws. The process can be quite complex, and there are numerous laws regarding the recruitment process and the payroll/onboarding process in Austria that must be adhered to.

To hire employees in Austria, the employer must first advertise the job opening in all possible media sources, including social networks and job boards. Once the candidates have been shortlisted, the employer must conduct interviews and choose the best candidate for the job.

After the candidate has been selected, the employer must provide them with an employment contract. Employment contracts in Austria are subject to strict regulations, and they must include specific information, such as the job title, salary, working hours, and paid leave entitlements.

The employer must also register the employee with the local entity and report the beginning and end of the employment of the international skilled worker to the Austrian Public Employment Service (AMS) within three days. If the skilled worker has a Long-Term Resident EU permit, the employer is not required to report the beginning and end of the employment.

In addition, the employer must ensure that the employee is enrolled in the Austrian social security system and that all relevant taxes are paid. By law, salaries in Austria have to be paid 14 times a year. The 13th-month salary is paid at the end of June, and the 14th at the end of November. These salaries are taxed at a very low rate (6%). Paid vacation entitlement depends on the length of employees’ workweek: those working six-day weeks get 30 days off in a year, and those working five-day weeks get 25 days off.

Hiring employees in Austria requires following strict regulations and adhering to the country’s employment laws. Employers must advertise the job opening, conduct interviews, provide an employment contract, register the employee with the local entity, report the beginning and end of the employment to the AMS, and ensure that the employee is enrolled in the Austrian social security system and that all relevant taxes are paid.

Work Permits and Residence Permits

In Austria, employers who wish to hire foreign employees must comply with the Ausländerbeschäftigungsgesetz (Foreign Nationals Employment Act). This act regulates the employment of foreigners in Austria and requires employers to obtain a work permit for their foreign employees.

There are several types of work permits available in Austria, including the Red-White-Red Card and the EU Blue Card. These permits allow skilled international employees from non-EU member states to work in Austria. 

Red white red card austria
Red-White-Red Card Australia Eligibility

The Red-White-Red Card is issued for a period of 12 months and can be renewed, while the EU Blue Card is issued for a period of 24 months and can also be renewed.

EU blue card austria
EU Blue Card Austria Eligibility

Third-country nationals who wish to work in Austria must obtain a residence permit. This permit allows them to reside in Austria for a limited period of time and work on a self-employed basis. However, they are not allowed to pursue gainful employment as a salaried employee.

Employers who wish to employ third-country nationals must apply for a residence permit on behalf of their employees. The application process can be lengthy and requires a significant amount of documentation, including proof of employment, proof of accommodation, and proof of health insurance.

The application process can be complex and time-consuming, but it is necessary to ensure compliance with Austrian law.

Employment Contracts

Employment contracts are a crucial component of hiring employees in Austria. They establish the terms and conditions of employment and help avoid misunderstandings between the employer and employee. Employment contracts must be in writing and must be signed by both parties.

The contract should include the following information:

  • Identity of the employer and employee
  • Job title and duties
  • Place of work
  • Start date of the employment
  • Duration of the employment (if a fixed-term contract)
  • Duration of the probationary period (if applicable)
  • Salary and payment schedule
  • Working hours and overtime policy
  • Notice periods for termination of the contract by either party
  • Vacation entitlements and holiday pay
  • Sick leave entitlements and sick pay
  • Social security contributions and benefits

Employers are required to provide employees with a copy of the employment contract in German. It is also advisable to have the contract reviewed by a legal expert to ensure compliance with Austrian labor laws.

Employment contracts can be either fixed-term or indefinite. Fixed-term contracts are allowed only in certain circumstances, such as when the work is temporary or seasonal. Indefinite contracts are the norm in Austria and provide greater job security for employees.

In case of any changes to the terms and conditions of employment, employers must inform employees in writing. Any changes to the employment contract must be agreed upon by both parties and must also be in writing.

Working Hours and Leave

In Austria, the normal working time for full-time employees is generally 40 hours per week and 8 hours per day. However, several collective agreements specify a weekly working time of 38.5 hours each week. It is also possible for employers to specify that employees work up to 12 hours a day and 60 hours per week.

austria working hours

Employees are entitled to at least 5 weeks of annual leave per year. This entitlement increases with age and length of service. Additionally, employees in Austria receive a 13th and 14th month salary, which are paid out in June and November.

There are also several types of paid leave available to employees in Austria, including sick leave, special leave, and compassionate leave. Employers are required to provide paid leave for public holidays, which include New Year’s Day, Easter Monday, Labor Day, Ascension Day, Whit Monday, National Day, Christmas Day, and Boxing Day.

Maternity leave in Austria is 16 weeks, with an additional 2 weeks of leave available for multiple births. Both parents are entitled to parental leave, but they cannot take it at the same time. The total amount of parental leave available is 52 weeks.

Overall, Austria provides broad protection and rights for employees in terms of working hours and leave entitlements.

Compensation and Benefits

When hiring employees in Austria, it is important to understand the local regulations regarding compensation and benefits. The most important legislation regulating employment relationships in Austria includes the Labour Constitution Act (Arbeitsverfassungsgesetz) (ArbVG), the Salaried Employee Act (Angestelltengesetz) (AngG), and the Working Hours Act (Arbeitszeitgesetz) (AZG). Many aspects of employment relationships are also governed by collective agreements.

Payroll and Minimum Wage

Employers in Austria are required to pay their employees at least the minimum wage set by the government. The current minimum wage in Austria is €1,500 per month for 14 payments per year. This means that employees are entitled to 14 monthly payments, including two extra payments in June and December.

Employers must also ensure that their payroll is in compliance with local regulations. This includes withholding taxes from employees’ salaries and making social security contributions on their behalf. It is recommended that employers work with a local payroll provider to ensure compliance with local regulations.

Compensation and Bonuses

In addition to the minimum wage, employers in Austria may offer their employees additional compensation and bonuses. This can include performance-based bonuses, profit-sharing schemes, and other incentives.

It is important to note that any bonuses or other compensation must be in compliance with local regulations and collective agreements. Employers should consult with a local employment law expert to ensure compliance.

Benefits

Employers in Austria are required to provide their employees with certain benefits, including paid vacation time, sick leave, and maternity leave. The amount of paid vacation time that employees are entitled to depends on their length of service, but typically ranges from 25 to 30 days per year.

Employers may also offer additional benefits to their employees, such as health insurance, retirement plans, and flexible work arrangements. It is important to note that any additional benefits must be in compliance with local regulations and collective agreements.

Employers in Austria must ensure that their compensation and benefits packages are in compliance with local regulations and collective agreements. It is recommended that employers work with a local employment law expert to ensure compliance and to provide their employees with a competitive compensation and benefits package.

Tax and Insurance Obligations

Employers in Austria have certain tax and insurance obligations when hiring employees. It is important to understand these obligations in order to comply with Austrian employment law.

Taxes

Austria has a pay-as-you-earn tax system, which means that taxes are deducted from employees’ salaries throughout the year. Employers are responsible for withholding and paying these taxes to the Austrian tax authorities.

The withholding tax rate depends on the employee’s income and tax bracket. The employer must also pay social security contributions on behalf of the employee. These contributions cover health insurance, pension insurance, and unemployment insurance.

austria social contributions

Health Insurance

In Austria, health insurance is mandatory for all employees. Employers must register their employees with the Austrian health insurance system and pay the required contributions.

The cost of health insurance in Austria is shared between the employer and the employee. The employer pays around 7% of the employee’s gross salary, while the employee pays around 3.5%. The exact amount depends on the employee’s income and other factors.

Employees also have the option to purchase additional private health insurance. This can provide additional coverage for things like dental care, alternative medicine, and private hospital rooms.

Employers in Austria have several tax and insurance obligations when hiring employees. It is important to understand these obligations and comply with Austrian employment law to avoid penalties and legal issues.

Employer of Record Services

When a company wants to expand its operations to a new country, it needs to comply with local employment laws and regulations. This can be a daunting task, especially if the company does not have a legal entity in the country. An Employer of Record (EOR) service can help companies overcome this challenge.

An EOR is a company that acts as the official employer of the workers hired by another company. The EOR takes care of all employment-related tasks, including payroll, tax compliance, benefits administration, and HR management. This allows the hiring company to focus on its core business operations while the EOR takes care of the administrative tasks.

In Austria, there are several companies that offer EOR services to foreign companies looking to hire employees in the country. Skuad’s Employer of Record Austria (EOR) solutions, for example, provide a unique HR platform that allows companies to hire exceptionally talented employees in Austria without having to set up a separate legal entity. Similarly, Velocity Global’s EOR solution gives companies legal peace of mind, expert guidance, and a single platform to simplify workforce management in Austria and around the globe.

Using an EOR service can be a cost-effective and efficient way for companies to expand their operations to new countries without the need to set up a legal entity. EOR services can also help companies comply with local employment laws and regulations, which can be complex and time-consuming.

Termination of Employment

Terminating an employment relationship in Austria can be a complex process, and employers must follow specific legal requirements. There are various reasons why an employer may terminate an employee’s contract, including redundancy, misconduct, poor performance, or a mutual agreement between the employee and employer.

In Austria, employers are not required to provide a reason for ordinary dismissals, but they must follow prescribed notice periods and termination dates. If an establishment employs five or more employees, these employees enjoy “General Protection against Dismissals.” This protection means that employers can only terminate an employee’s contract for specific reasons, such as misconduct or poor performance, and must provide a valid reason for the dismissal.

The notice period for termination of employment in Austria varies depending on the length of service of the employee. According to Austrian law, the notice period for employees with less than two years of service is six weeks. For employees with more than two years of service, the notice period increases to two months.

Work Notice periods austria

In the case of a mutual agreement between the employee and employer, a termination agreement must be signed by both parties. This agreement should outline the terms of the termination, including any severance pay and the date on which the employment relationship will end.

In cases of redundancy, employers must follow specific procedures and provide employees with a severance payment. The amount of the severance payment is determined by the length of service of the employee and the reason for the redundancy.

Compliance and Legal Framework

Hiring employees in Austria requires compliance with the country’s legal framework. Employers must adhere to the provisions of the Austrian Labor Constitution Act (Arbeitsverfassungsgesetz), which governs the relationship between employers and employees. The Act outlines the rights and obligations of both parties, including working hours, minimum wage, and leave entitlements.

Employers in Austria are also required to comply with anti-discrimination laws. The Austrian Equal Treatment Act (Gleichbehandlungsgesetz) prohibits discrimination on the grounds of gender, age, race, religion, and sexual orientation. Employers must ensure that their hiring practices do not discriminate against any individual or group.

Collective agreements are an important aspect of the legal framework governing employment in Austria. These agreements are negotiated between employers and employee representatives and set out the terms and conditions of employment for a particular industry or sector. Employers must ensure that they comply with the terms of any relevant collective agreement.

Misclassification of employees is a common issue in the employment sector. In Austria, the distinction between employees and self-employed individuals is important, as it determines the rights and obligations of each party. Employers must ensure that they classify their workers correctly to avoid potential legal issues.

In summary, compliance with the legal framework governing employment in Austria is essential for employers. This includes adherence to the provisions of the Labor Constitution Act, compliance with anti-discrimination laws, compliance with collective agreements, and proper classification of employees. Employers who fail to comply with these requirements may face legal action and financial penalties.

Frequently Asked Questions

According to Oyster®, the minimum salary in Austria is €1,500 per month for full-time employees. This amount may vary depending on the industry and job position.

To find an employer in Austria, you can search online job portals such as Indeed AustriaKarriere.at, and StepStone Austria. You can also visit company websites and apply directly.

Yes, you can hire international employees in Austria. However, they must have the necessary residence and work permits to legally work in the country. Employers can also use an Employer of Record (EOR) service to simplify the process of hiring international employees. Global Expansion offers an EOR service in Austria.

The cost of hiring international employees in Austria may vary depending on the type of work permit and the services required. Employers should also consider the mandatory benefits and payroll accruals required by Austrian law. An EOR service may simplify the process and provide a more cost-effective solution. Global Expansion offers an EOR service in Austria.

Yes, employers in Austria are required to deduct income tax, social security contributions, and health insurance contributions from employee salaries. Employers are also required to make contributions to the Austrian social security system. Expatica provides a comprehensive guide to Austrian employment law.

Yes, foreigners can find jobs in Austria. However, they may need to obtain a work permit and meet certain requirements. The Austrian Public Employment Service (AMS) provides information and assistance for job seekers in Austria. Online job portals such as Indeed AustriaKarriere.at, and StepStone Austria also list job vacancies for foreigners.

Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.

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