What should I know about hiring in Austria?
If you are planning to hire employees in Austria, it’s important to understand the country’s structured labour law framework and strong employee protections. Austrian employment relationships are governed by a combination of legislation, collective bargaining agreements, company agreements, and individual employment contracts.
Key laws such as the Austrian Labour Constitution Act (Arbeitsverfassungsgesetz), the Employment Contract Act (Arbeitsvertragsrechts-Anpassungsgesetz), and the Austrian Civil Code regulate working conditions, employee rights, termination procedures, and employer obligations.
Many industries in Austria, including the IT sector, are heavily regulated through collective bargaining agreements, which establish minimum salaries, overtime rules, bonuses, and workplace standards.
Why is Austria a good choice for finding remote employees?
Austria offers access to a highly educated, multilingual, and technically skilled workforce, particularly in sectors such as IT, engineering, finance, customer support, and business services.
The country has a strong digital infrastructure, reliable internet connectivity, and a highly developed professional environment that supports remote and hybrid work arrangements. Austrian professionals are experienced in working with international companies and distributed teams, making cross-border collaboration easier.
Austria’s central European location also makes it strategically attractive for companies expanding across Europe. Combined with strong labour protections and predictable employment regulations, Austria provides businesses with stability when building remote teams.
How can Native Teams help you hire in Austria?
Hiring in Austria requires employers to navigate complex labour laws, collective agreements, payroll regulations, and compliance requirements.
With Native Teams’ Employer of Record (EOR) services, you can hire employees in Austria without opening a local entity. We handle employment contracts, payroll, benefits, compliance, and ongoing legal obligations while ensuring your employees receive a fully compliant local employment experience.
This allows your business to expand into Austria faster while reducing administrative burden and legal risk.
Hire your first Austrian employee with Native Teams.
Legal requirements for hiring in Austria
Below are the key legal considerations when employing workers in Austria:
Legal framework
Austrian employment law is regulated through multiple legal sources rather than a single labour code. The main legal framework includes:
- Austrian Labour Constitution Act (Arbeitsverfassungsgesetz – ArbVG)
- Employment Contract Act (Arbeitsvertragsrechts-Anpassungsgesetz – AVRAG)
- Austrian Civil Code (ABGB)
- Collective bargaining agreements (CBAs)
- Company agreements
- Individual employment agreements
These regulations define employee rights, employer obligations, dismissal protection, working conditions, and collective labour relations.
Types of employment contracts
The most common employment contracts in Austria include:
- Indefinite-term contracts (unbefristeter Arbeitsvertrag)
- Fixed-term contracts (befristeter Arbeitsvertrag)
- Part-time contracts
- Temporary agency work contracts
- Apprenticeship contracts
- Freelance service contracts
Indefinite contracts are the standard form of employment and continue until terminated by either party.
Fixed-term contracts automatically end on the agreed date. However, repeated consecutive fixed-term contracts without valid economic or operational justification may be treated as permanent employment relationships under Austrian law.
Content of an employment contract
Employment contracts in Austria should clearly define the terms of the employment relationship. A contract typically includes:
- Employer’s name and address
- Employee’s name and residence
- Employment start date
- Workplace location
- Job title and responsibilities
- Working hours
- Salary and bonuses
- Payment deadlines
- Holiday entitlement
- Notice periods
- Applicable collective agreement
If no written employment contract is signed, employers must still provide employees with a written statement of essential employment terms (Dienstzettel).
Download a free employment contract for Austria through Native Teams.
Oral, written, or electronic employment contracts
Employment contracts in Austria may be concluded verbally, in writing, or through conduct. However, written contracts are strongly recommended for legal clarity and compliance purposes.
Electronic signatures are legally recognised under Austrian law if they comply with the Austrian Signature Act requirements.
Many international employers use bilingual employment agreements, particularly when the parent company operates outside Austria. However, German-language versions are generally recommended in case of disputes before Austrian courts.
Working hours
Working hours in Austria are regulated by the Working Time Act (Arbeitszeitgesetz – AZG). The standard working time is:
- 8 hours per day
- 40 hours per week
In many industries, collective agreements provide shorter working weeks. For example, Austria’s IT collective agreement sets standard working hours at 38.5 hours per week.
Daily working time may extend to 12 hours and weekly working time to 60 hours under certain conditions, provided legal overtime limits and rest requirements are respected.
Flexible working arrangements and flexitime systems are commonly used and must generally be regulated through written agreements or company policies.
Night work
Night work in Austria generally refers to work performed between 10 PM and 5 AM.
Employees who regularly work during these hours are considered night workers and may be entitled to additional rest periods, health assessments, night shift premiums, and special workplace protections
Night workers are generally limited to a maximum of 8 working hours within a 24-hour period.
Breaks and types of leaves
Employees working more than six hours per day are entitled to a minimum 30-minute break. In addition, Austrian labour law requires at least 11 consecutive hours of daily rest, and a continuous weekly rest period of 36 hours.
Certain industries may allow exceptions through collective agreements. Employees may also receive additional paid leave in cases such as family emergencies, care responsibilities, or special personal events depending on company policies and collective agreements.
Annual leave
Employees in Austria are entitled to five weeks of paid annual leave per year:
- 25 working days for a five-day workweek
- 30 working days for a six-day workweek
After 25 years of service, annual leave increases to six weeks.
During the first six months of employment, leave entitlement accrues proportionally. From the second year onward, the full leave entitlement is available from the beginning of the leave year.
Unused leave must generally be compensated upon termination of employment.
Salary
Austria does not have a statutory national minimum wage. Instead, minimum salary requirements are established through collective bargaining agreements.
Employee salaries are typically determined based on industry sector, job classification, experience level, and applicable collective agreement
Many Austrian collective agreements also require employers to provide 13th-month salary (Christmas allowance) , and 14th-month salary (holiday allowance). These additional payments are standard across many industries, including IT services.
To calculate the salary and taxes in Austria, click here.
Sick leave
Employees in Austria are entitled to paid sick leave if they are unable to work due to illness or accident. Employers must generally continue salary payments for at least six weeks, with longer entitlements depending on the employee’s length of service.
After the employer-paid period ends, employees may receive sickness cash benefits through the Austrian health insurance system. Medical certificates are typically required to confirm incapacity to work.
Parental leave
Both mothers and fathers are entitled to parental leave until the child reaches the age of two. Parental leave:
- Must generally last at least two months
- May be split between parents
- Includes protection against dismissal
- Can be extended under certain conditions
Parents may also engage in limited secondary employment during parental leave, subject to legal income thresholds.
Paternity and maternity leave
Pregnant employees are entitled to maternity leave, which generally begins 8 weeks before childbirth till 8 weeks after childbirth. During maternity leave, employees receive maternity benefits based on previous earnings.
Fathers are entitled to one month of paternity leave within the first 91 days after the child’s birth. Employees on maternity or parental leave benefit from strong dismissal protections under Austrian labour law.
Methods of employment termination
Employment relationships in Austria may end through:
- Ordinary termination
- Extraordinary dismissal
- Mutual agreement
- Resignation
- Expiration of fixed-term contracts
- Termination during probation
- Death of the employee
Termination rules differ depending on the employee category, applicable collective agreement, and the circumstances of dismissal.
Ordinary dismissal by the employer
Employers in Austria may generally terminate employment without providing a specific reason, provided they comply with statutory notice periods, applicable collective agreements, and dismissal protection rules
Immediate dismissal without notice is only permitted in cases of serious misconduct, such as theft, breach of trust, or refusal to perform assigned duties.
Certain categories of employees, including pregnant employees and employees on parental leave, receive special protection against dismissal.
Notice period and challenging the dismissal
Notice periods in Austria depend on employee category, length of service, collective agreements, and employment contracts. For white-collar employees, employer notice periods generally start at six weeks and increase with tenure.
Employees may challenge dismissals before the labour and social security court if they believe the termination was unlawful, discriminatory, or socially unjustified.
Rights and obligations of unemployed persons
Employees in Austria may qualify for unemployment benefits if they are unemployed, available for work, and meet insurance contribution requirements. Unemployment benefits are generally calculated based on previous earnings and insurance contributions.
Employees who exhaust unemployment benefit eligibility may apply for unemployment assistance (Notstandshilfe).
Severance pay
Austria operates a mandatory severance system known as the “new severance model.” Employers must contribute 1.53% of an employee’s gross salary into a severance fund beginning from the second month of employment.
Employees who leave the company may later access these accumulated severance contributions under certain conditions. Older employment relationships formed before 1 January 2003 may still fall under the previous severance system.
Probationary period
Austrian law limits probation periods to a maximum of one month. During probation, either party may terminate the employment relationship immediately without providing a reason. Probation periods must be explicitly agreed upon in the employment contract unless otherwise provided by a collective agreement.
Intellectual property rights
Under Austrian law, employees generally retain ownership of intellectual property unless otherwise agreed in the employment contract.
Employers commonly include IP assignment clauses clarifying ownership of work created during employment, particularly in technology and creative industries. Employment contracts should also address confidentiality obligations and protection of trade secrets.
Employee data privacy
Employee data privacy in Austria is governed by:
- Austrian Data Protection Act (DSG)
- General Data Protection Regulation (GDPR)
Employers must process employee data lawfully, transparently, and only for legitimate purposes.
Employees have rights to:
- Access their personal data
- Request corrections
- Request deletion under certain circumstances
Employers must also implement appropriate technical and organisational security measures to protect employee data.
Prohibition of competition
Employees may not engage in competing business activities during their employment relationship.
Post-contractual non-compete clauses are permitted but must be agreed in writing, reasonable in scope, meet minimum salary thresholds, and avoid excessively restricting the employee’s professional opportunities
Employers may not enforce non-compete clauses if the employee was dismissed without justification.
Remote working policy
Remote work in Austria is governed by the Employment Agreement Law Adaptation Act (AVRAG). Working from home requires mutual agreement between the employer and employee and should generally be documented in writing.
Neither party can unilaterally impose remote work arrangements. Remote work agreements may generally be terminated by either party with one month’s notice for valid reasons.
Responsibilities within a remote work arrangement
Employers are generally responsible for providing the necessary digital work equipment for remote work, including IT hardware, data connections, and required software.
If employees use their own equipment, employers may need to compensate related costs. Austria also provides tax exemptions for certain employer reimbursements related to remote work expenses.
What are the advantages of hiring employees from Austria vs other countries?
Hiring employees from Austria gives businesses access to a highly qualified workforce operating within a stable and predictable legal environment.
Austria offers strong professional education standards, multilingual talent, high digital literacy, strong infrastructure, central European market access, and stable labour regulations
Austria is particularly attractive for businesses hiring in technology, finance, engineering, consulting, and customer support sectors.
Why use Native Teams for hiring in Austria?
Native Teams allows businesses to hire employees in Austria quickly and compliantly without establishing a local entity. Here’s why companies use Native Teams for hiring:
- No company setup required
- Fully compliant local employment
- Payroll and tax management
- Employment contract management
- Online onboarding
- Local compliance expertise
- Ongoing HR and administrative support
- Reduced operational complexity
- Faster international expansion
With Native Teams, you can build and manage your Austrian workforce while we handle the legal, payroll, and compliance responsibilities.
