In today’s competitive job market, finding the right talent for your organization can be a daunting task and hiring employees in a foreign country like Austria can be even more challenging. As an employer, you have to contend with language barriers and the unfamiliar nuances of local employment laws.
Thankfully, there is a service that can streamline the hiring process for companies looking to expand their business in Austria – an Employer of Record (EOR).
Why Hire Talent in Austria?
Austria is home to a population of highly skilled workers. In fact, around 42% of its citizens have tertiary education, making it one of the most educated countries in the world. This means that the talent pool in Austria is not only deep but highly specialized.
Austrians are known for their professionalism and work ethic, making them great candidates for companies looking for very highly qualified workers.
Austria also repeatedly tops the list of many studies as one of the countries with the best quality of life. According to the OECD Better Life Index, Austria outperforms the average country in terms of jobs, health, environmental quality, social connections, safety and life satisfaction. The country also boasts a rich cultural heritage and deep national pride which fosters a sense of community amongst locals.
Although German is Austria’s national language, 73% of Austrians have advanced English language skills and speak English as a second language quite proficiently. Hiring German speakers can also be beneficial for companies looking to expand their business into other German-speaking countries.
Ways Companies Can Engage Workers in Austria
To hire in Austria, your company needs to have a legal entity operating in the country. Getting an entity set up can be time-consuming. The efforts are only worth it if you intend to dramatically expand your business into the Austrian market in the long term.
There are, however, other options for companies looking to engage workers in Austria for more immediate purposes.
Posting and Hiring Out Workers
Posting of workers is a process where foreign enterprises without a registered business in Austria temporarily engage with Austrian workers to fulfill an assignment. This type of work is usually carried out under an agreed-upon contract. The person of hire fulfills the requested work or services for a predetermined amount of time. This type of working arrangement is also known more commonly in North America as contracting or engaging an independent contractor.
If a worker is integrated into the Austrian company and under the supervision and instructions of the corporation, this is not considered posting, but of hiring out of workers (personnel leasing). The Austrian company is then considered to be the employer.
While posting and hiring out individuals who work in Austria might appear to be an easy option, there are still certain things that must be considered to ensure all legal working conditions are met.
Employers considering posting or hiring out workers must be aware of all associated legal risks with misclassifying workers as full-time employees. Companies may be liable to pay various misclassification fines if Austrian workers are incorrectly categorized.
Engage Individuals with an Austria Work Visa
Now, is there a dedicated Austria Remote Work Visa you may ask? Unfortunately, there is not. Austria is not one of the countries that offers a digital nomad visa to foreign workers. If your company is looking to hire non-European Union, EEA, or Swiss citizens remotely in Austria, there are other valid Austria work visa alternatives that allow the holder to work for specified periods of time.
A highly qualified worker and other key workers may apply for one of the following visas or work permits:
- Austria Work Permit
- White Red Card
- Job Seeker Visa
- National Visa
However, not all Austrian work visas entitle the holder to working benefits.
If the individual is an EU, EEA, or Swiss citizen, they are allowed to live and work in Austria as a digital nomad for up to three months without any visas or permits. If the individual plans to stay longer than three months, they must apply for a certificate of registration in order to continue their stay in Austria.
Employers and potential employees may also enquire with their local public employment service or Austrian embassy for more details about the type of visa or work permit that would best suit their situation.
Partner with an Employer of Record (EOR)
An EOR service provider like Borderless can be an invaluable resource when it comes to hiring employees in Austria. Not only can it help you navigate complex labor laws and regulations, but it will also offer a range of services to support your business operations.
From payroll and tax compliance to onboarding and employee management, an EOR service can help streamline your business operations in a cost-effective manner.
Things to Consider When Hiring in Austria
Austria Minimum Wage
There is no official minimum wage determined by law in Austria. An employee’s wage is determined by agreement between the employer and the employee. However, an unofficial minimum of around €1,500 per month is typically observed.
Overtime and Additional Pay
Companies in Austria follow the Working Hours Act, the Working Hours Rest Act, and collective agreements to manage working hours for their employees. A typical Austrian workweek is eight hours per day and 40 hours per week. The maximum daily work allowance is 12 hours, including overtime, which is typically paid at 1.5 times an employee’s regular hourly salary.
Though it is not legally required, Austrian employees typically receive 13th- and 14th-month bonuses. The 13th-month bonus is paid at the end of June, and the 14th-month bonus is paid in late November.
Austrian Employment Documents
In Austria, a written employment contract (Arbeitsvertrag) is not mandatory and a verbal work contract can be sufficient. An employer cannot change the terms and conditions of employment unless it is explicitly stated in the employment contract.
If the terms of employment have not been agreed upon in writing, the employer is required to give the employee an employment card (Dienstzettel) to serve as proof of employment.
Employee Taxes
Austrian residents must pay an Austrian income tax on their global earnings. This includes trade and business income, income from employment, profession, investments, or property. Non-residents can also be taxed on certain income sources, but only within Austria. Those who work in Austria are subject to tax on personal income based on the amount earned. Personal income tax rates for individuals in Austria are as follows:
- €11,693 or less: 0%
- €11,694 to €19,134: 20%
- €19,135 to €32,075: 30%
- €32,076 to €62,080: 40% (as of July 1st 2023)
- €62,081 to €93,120: 48%
- €93,121 to €1,000,000: 50%
- above €1,000,000: 55%
Austria Employee Benefits
Austria’s employee support system is one of the best in the world for a reason. Similarly to Germany, there are a variety of Austria employee benefits available to those who work in Austria.
Annual Holidays
On the cultural front, Austria observes 13 national and civic holidays should be considered when building your distributed team. Austrians celebrate:
- January 1: New Year’s Day
- January 6: Epiphany
- April 5: Easter Monday
- May 1: Labor Day
- May 13: Ascension Day
- May 24: Whit Monday
- June 3: Corpus Christi
- August 15: Assumption Day
- September 24: Saint Rupert’s Day (only in Salzburg)
- October 26: National Day
- November 1: All Saint’s Day
- November 15: Saint Leopold’s Day (only in Vienna)
- December 8: Immaculate Conception Day
- December 25: Christmas Day
Statutory Annual Leave
Employees are guaranteed a minimum of five weeks of paid annual leave for each year worked and are entitled to 25 to 30 days of leave per year. After 25 years of service, this entitlement increases to six weeks. Part-time workers have the same entitlement as full-time employees. Employees are required to reach an agreement with their employer regarding the requested time of their leave.
Sick Leave
On average, employees are allowed 30 days of paid sick leave. This ensures that in cases of illness, industrial accidents, and occupational illnesses, as well as during periods of rest and recovery, employees will continue to receive their regular pay. The duration of this continued payment primarily depends on one's length of service, and the industry of employment.
After 30 days, individuals receive insurance benefits from their health insurance provider. The specific amount of sick pay depends on the earnings from the month prior to the illness and the amount of continued compensation received. It is the responsibility of the employee to notify the employer upon becoming unable to work.
Maternity and Parental Leave
The standard maternity protection period (Mutterschutz) for expectant employees typically starts eight weeks prior to the anticipated birth and ends eight weeks after. During this time there is a total ban on employment, meaning the employee must not work at all during this period.
During this time, the employment relationship remains intact, and the employee receives a maternity allowance (Wochengeld) roughly equivalent to the average compensation earned in the last 13 weeks before the leave starts. As of January 1st, 2008, even self-employed contractors are eligible to receive maternity allowance.
Mothers and fathers have the right to take parental leave, which involves being excused from work without payment, until their child reaches a maximum age of 24 months, as long as the parent on leave lives in the same household as the child. The minimum duration for parental leave is two months.
During the period of parental leave, it is possible to receive a childcare allowance (Kinderbetreuungsgeld) if eligibility criteria are met. Parents have the option to choose from five different models of childcare allowance. One of these models is based on income, while the others provide a fixed monthly amount.
The Benefits of Using an EOR in Austria
An EOR offers many benefits to companies that are looking to hire in Austria. Firstly, an EOR can fast-track the hiring process, as it will already have an established legal and administrative framework in place.
Companies that use an Employer of Record in Austria can be confident that their documentation is handled by a team of experienced professionals who understand local labor laws.
Compliance is particularly important for those who want to successfully operate and work in Austria, as labor laws are strictly enforced. Employers who violate local employment laws can face serious financial penalties and business disruptions. Using an EOR ensures that your company remains legally compliant, and avoids unexpected surprises and negative impacts to its reputation.
5 Steps to Onboard Your New Austrian Team
Onboarding employees is an important part of the hiring process. With an effective onboarding system in place, you can smoothly integrate new hires into your company and provide them with the necessary resources they need to succeed. Let’s take a look at some of the best practices to follow when onboarding new team members in Austria.
Step 1: Determine Your Hiring Needs
Start by determining the positions you need to fill, the skills required, and the type of employment contract you plan to offer. This will guide the rest of the process and ensure that you are identifying candidates that meet your business needs.
Step 2: Choose an EOR Service Provider
It is crucial to research the EOR service providers available in Austria and select one that meets your company’s specific needs. Look for a provider who offers comprehensive services, pricing transparency, and a proven track record of compliance.
Step 3: Define Employee Onboarding and Management Process
Once your EOR is in place, establish a streamlined onboarding process for your new hires. This should include employee management policies, job performance standards, and disciplinary procedures. The EOR will help you ensure that all practices are legally compliant.
Step 4: Jointly Select and Hire Qualified Candidates
Collaborate with your EOR in the recruitment process, and conduct interviews to ensure that you are selecting the most qualified candidates for your organization. Ensure that all employment laws and regulations are adhered to in the hiring process.
Step 5: Maintain Effective Communication and Record-Keeping
Maintain clear communication with your EOR and your new hires. Also, make sure to keep accurate records of all employment-related data and transactions.
How Borderless Can Help
As an Employer of Record (EOR) service, Borderless is an excellent solution for companies looking to hire in Austria. By outsourcing your hiring administration tasks to a third-party provider like Borderless, your company can save time and money, and focus on your core business objectives.
Book a demo with Borderless today to see how we can help you hire your dream team!
Disclaimer: Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
