How to Hire Employees in Austria: Key Insights and Steps

The flourishing economy of Austria makes it an attractive destination for businesses aiming to expand overseas. Austria’s prime location allows you to conduct business smoothly with the rest of Europe and provides connectivity to global business centers. 

The availability of a skilled workforce, robust infrastructure, social security, and high quality of life reinforce Austria’s position as a premier business location for international investors. 

Due to these reasons, businesses globally hire employees in Austria. However, there are many complexities in employee recruitment and selection in Austria. 

Companies that hire non-EU nationals in Austria must comply with the rules and regulations governing the employment of foreigners. Moreover, hiring employees in Austria is legal only after acquiring the relevant work permit. 

Read on to learn how to recruit employees in Austria in detail.

Setting up a business overseas can be confusing as you must acquaint yourself with foreign laws and regulations. To hire employees in Austria, companies have to adhere to the laws regarding the recruitment process in Austrian companies:

• Individuals who are not Austrian citizens nor EEA, EU, or Swiss nationals are considered third-country nationals in Austria 

• Two principal authorities are involved in employing third-country nationals in Austria

• The Austrian Public Employment Service (Arbeitsmarktservice) deals with labor and employment laws. 

• The Immigration and Residence Authority (Aufenthaltsbehörde) is in charge of matters related to residence rights. 

• The Austrian Settlement and Residence Act (Niederlassungs- und Aufenthaltsgesetz) and the Austrian Aliens Employment Act (Ausländerbeschäftigungsgesetz) regulate the recruitment process in Austrian companies.

Before initiating recruitment and selection in Austria, let’s look at the key elements that employers must keep in mind.

Work permits

Work permits are mandatory for hiring staff in Austria. While this rule does not apply to the citizens of the EEA member countries, getting the requisite work permit is a must for foreign nationals intending to work in the country. Third-country residents need a Red-White-Red Card and a residence-cum-employment permit for staying and working in Austria for two years, provided they work at the same company. However, changing companies will require reapplying for the permit, for which the applicant must possess health insurance, proof of accommodation in Austria, and proof of a secure income.

Employment contracts

Austria’s employment law stipulates that a written contract between the employer and employee is not mandatory during the recruitment process in Austrian companies. A verbal agreement between the two parties is common and acceptable. Moreover, collective agreements in Austria are lawfully binding contracts that intend to protect the interests of the employer and the employee. Such agreements typically list the minimum working conditions, employee rights, and benefits. In addition, the employer cannot alter the contract’s terms and conditions at their will unless stated or agreed upon beforehand.

Work hours and wages

Understanding the work hours and wages is vital before hiring staff in Austria. Office hours in Austria typically stretch from 9 AM to 5 PM, although many offices may start earlier. However, the standard eight-hour workday includes designated lunch breaks. Although federal regulations stipulate a maximum of 48 hours of a working week, this can be altered based on a collective agreement. 

Austria did not have any statutory minimum wage before 2017. However, after a negotiation with social partner organizations in 2017, the effective minimum wage in Austria for all industries in the country is €1,500 a month. 

Employee benefits

Businesses have to provide mandatory benefits after hiring staff in Austria. Job benefits include holiday pay, maternity and paternity pay, unpaid leaves, and other social security perks. In addition, Austrian employment law grants certain parental rights, including pregnancy and parental leaves. As an employer, you must uphold the principle of equality by protecting employees from discrimination.

Language requirements

The official language of Austria is German, with around 98% of the population speaking it as their mother tongue. Therefore, you must be proficient in German while hiring foreign workers in Austria. Alternatively, you can hire a global EOR to manage the hiring and onboarding of your international employees.

The recruitment fees in Austria vary from company to company. 

Below is a list of expenses that businesses include while calculating the actual cost of hiring an employee in Austria:

• Annual basic salary: The amount of money you pay your employees before considering bonuses, taxes, and other deductions.

• Bonuses: Yearly benefits and perks in cash or other payment forms are indispensable for retaining talent and motivating employees. This also includes pensions, insurance, and other social security provisions.

• Advertising: It includes all costs related to advertising a job opening through various media channels.

• HR costs: If you do not hire an EOR service, you may incur significant expenses on paying your internal staff for managing interviews, hiring, background checks, and onboarding. 

• Training: A critical aspect of hiring foreign workers in Austria is providing them with the requisite training for the job. Training program costs may include shadowing, orientation, external courses, etc.

• Office setup: Hiring a new employee means that you have to arrange their office setup, including workspace furniture, internet, mobile, landline, etc.

Before hiring employees in Austria, you must establish your business legally and understand the employment laws. You have to fulfill the following requirements to set up a business and recruit in Austria:

1. Minimum age of 18 years
2. Austrian residence permit, if you do not belong to any European nation
3. A clean criminal record
4. Special visa or work license (not applicable if you have a Swiss or an EU passport)

Alternatively, you can partner with a global EOR that can help you hire and manage employees without setting up a legal entity.

While it is not mandatory in Austria to have a written employment contract, it is better to have one while hiring employees in Austria. A formal employment contract should ideally lay down the working hours, wages, benefits, compensations, termination conditions, etc. If you do not give a written employment contract, you should at least provide your employees with a statement of employment terms and conditions. Most importantly, you must ensure that all agreements are in the local language (ideally German) and salaries/compensations are in Euros.

To hire employees in Austria, you must look at the types of employment prevalent in the country. However, the legislation regulating foreign nationals’ employment will eventually decide foreign employees’ rights.

• Full and part-time workers: One of Austria’s most widespread and conventional approaches to hiring staff is a permanent employment relationship. Full-time employees must be given all rights and benefits such as social insurance, leaves, protection against dismissal, etc. Part-time employees in Austria are entitled to the same benefits as full-time workers. Hiring employees in Austria under fixed-term employment contracts also falls under this category.
• Independent contractors/freelancers: Independent contractors or freelancers typically work on a project basis. While they get almost full social and unemployment insurance, they enjoy limited rights under the Austrian labor legislation. However, independent contractors generally have no claim to statutory benefits like holiday pay unless they have a specific agreement with the client.
• Minimally employed workers: Minimally employed workers are typical in the trade sector. They are part-time employees with access to health insurance and a pension fund.
• Seasonal workers: They get complete social insurance protection, and their working time is stipulated in collective treaty provisions. Such workers are common in the hospitality sector.
• Apprentices (trainees): Apprentices or trainees enjoy special protection against dismissal and access to the complete insurance program. If you employ underage apprentices, you must draw up a written apprenticeship contract with an agreement from their legal representative. 
• Voluntary workers: Austria’s voluntary workers are given trainee status. However, they have no claim to remuneration and are under no obligation to work.
• Agency workers: Although agency workers in Austria are considered employees, they are not covered by a formal employment contract. Instead, they work by order, have limited statutory benefits, and get full insurance protection. 
• ‍Hire through a PEO: A PEO (Professional Employer Organization) is a third-party company that acts as your employees’ employer of record (EOR). You can outsource your recruitment needs to the PEO without setting up a business entity or payroll abroad.

The hiring process in Austria is pretty standard and requires you to adhere to the country’s employment laws. Follow the given steps to hire foreigners in Austria:

1. Advertise the opening

While looking for talent in a foreign land, it is best to advertise the job opening in all possible media sources, including social networks and newspapers. 

2. Shortlist applicants

The next step involves screening candidates and shortlisting for interview sessions.

3. Conduct interviews

Assess and evaluate the shortlisted job applicants through one-on-one interviews.

‍4. Hire and onboard

Candidates who clear the interview rounds are eligible for hire. However, make sure to perform necessary background checks, draft employment contracts (if applicable), and complete other legal/administrative hiring procedures.