Requirement for Foreign Employees to Work

Employment of foreigners in Austria is only permitted if they are generally exempt from the Employment of Foreign Nationals Act (AuslBG) or if an official permit for their employment has been issued. A person who does not have Austrian citizenship is generally considered a foreigner. Nationals of EEA and EU countries are exempt from the AuslBG.

The respective regional office of the AMS (Labour Market Service) is responsible for the official approval of a foreigner’s employment.

The following permits are currently available for the approval of a foreigner:

• Employment permit or secondment permit;
• Red-White-Red Card, Red-White-Red Card plus, EU Blue Card;
• Residence permit as an intra-corporate transferee (ICT);
• Confirmation of notification;
• Residence Permit plus, Residence Permit Family Member, Residence Permit Family Community with Access to the Labour Market, Permanent Residence – EU; or
• Employment permit and exemption certificate for Turkish citizens.

The permit must be issued before the foreigner begins his employment.

The employer is obliged to report the beginning and end of all employment relationships with foreigners to the competent regional office of the AMS (Labour Market Service) within three days.

This does not apply to foreigners who have a residence title “Permanent Resident-EU”. The employer must keep the permits or confirmations issued to him under the Employment of Foreign Nationals Act available for inspection in the company. If the employer does not comply with this obligation to notify or keep available, there are administrative fines of up to € 2,000 per employee.

Austrian immigration law must be observed in addition to the Employment of Foreign Nationals Act (AuslBG).

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

No, not from an employment law perspective. It might however be necessary from a trade, tax or corporate law perspective.

• EU/EEA States and Switzerland:

For entrepreneurs from EU/EEA states and Switzerland, the EU’s freedom to provide services means that they can carry out temporary cross-border services with the help of their own personnel in any other EU/EEA state, provided that there are no special regulations and the entrepreneur is authorised to carry out this trade in the state in which he or she is based.

If an employer domiciled in an EU/EEA state or Switzerland posts employees to Austria to perform work, the employer must comply with many notification and record keeping obligations. Failure to comply with these obligations results in high administrative penalties. In principle, also short-term cross-border postings must also be reported. Under certain conditions, cross-border postings without work performance and for short duration do not have to be reported.

Employees who are posted to Austria to perform work are entitled to at least the remuneration, including special payments, overtime etc., to which employees of comparable employers are entitled in Austria by law, regulation or CBA. Underpayments are subject to high administrative penalties under the Wage and Social Dumping Act (LSD-BG).

Administrative penalties are imposed on the organs of the company if the company is a legal entity.

• Non-EU/EEA States:

For services that are to be provided cross-border outside the EU (non-EU foreign countries), different regulations apply from country to country.

The following points must in any case be considered in advance by the entrepreneurs:

• Entry and residence regulations;
• Work permit, labour market regulations;
• Tax requirements;
• Social security obligations;
• Admissibility under trade law;
• Import regulations and customs duties (e.g. for equipment and tools brought along);
• Professional qualifications and professional licenses.

Limitations on Background Checks

Professional background checks are rather uncommon in Austria (with the exception of special sectors and key personnel).

Research and use of information in the course of an application procedure by an employer is a data processing within the meaning of Art. 4 Z 2 GDPR. Such data processing is only allowed according to Art 5 GDPR if it is done in a lawful manner, in good faith and for specified, explicit and legitimate purposes.

Therefore, data about job applicants may only be used if they are necessary and appropriate for the decision on the establishment, performance or termination of an employment relationship.

Internet research could be permissible, if the information researched on the Internet is generally and publicly available without the need for a password or similar or which the data subject has made public. The use of professional, outsourced background check services is very critical under data protection law and only permissible with a valid consent of the job applicant.

Restrictions on Application/Interview Questions

The law does not explicitly regulate which questions may be asked during a job interview and which are not permitted. Due to the Equal Treatment Act and Data Protection Act as well as relevant case law on this subject, questions concerning the following “areas” are not permitted:

• Questions about religious belief, ideology, sexual orientation;
• Questions about marriage, marital status, children, desire to have children, partnership;
• Questions about pregnancy or planned pregnancy;
• Questions about health (unless there is profound justification);
• Questions about previous convictions (unless there is profound justification);
• Questions about debts or personal financial circumstances; and
• Questions about trade union, party or association membership or plans to such.