Hiring guide in Austria

Austria is known for its excellent quality of life, thanks to its robust social safety system, first-rate medical care, and favourable work-life balance. With several new businesses and well-established corporations operating there, Austria boasts a vibrant technology industry. 

Austrian remote workers are more accustomed to the most recent technology and remote work tools. Also, Austria’s well-developed education system produces a highly skilled workforce with advanced degrees and training. 

Lastly, Austria has a high degree of proficiency in English, making it simpler to communicate with remote workers. Therefore, Austrian remote workers will likely be highly educated, motivated, and effective.

How can Native Teams help you hire in Austria?

Native Teams can help you hire in Austria by providing expert knowledge of the local employment regulations and requirements. Native Teams will work closely with you to understand your hiring needs and preferences and provide a tailored solution that meets your requirements. Our Employer of Record services in Austria can assist you in finding competent people, integrating them into your team, and adhering to all applicable tax, benefit, and compensation laws and regulations.

 Hire your first Austrian employee with Native Teams.

Legal requirements for hiring in Austria

When hiring new team members in Austria, employers need to follow these legal requirements to ensure a fully compliant hiring process.

Legal framework

Types of employment contracts

The most commonly used employment contracts are open-ended and fixed-term contracts. The indefinite-term contract, known as “unbefristeter Arbeitsvertrag,” establishes an employment relationship without a fixed end date.

On the other hand, the fixed-term contract, or “befristeter Arbeitsvertrag,” is a legally binding agreement that sets a specific duration of employment, automatically ending on the agreed-upon date without needing notice. This type of contract is permitted for temporary or project-based work.

Content of an employment contract

Standard employment contracts must contain certain key characteristics. These include a specified workplace location, predefined working hours, and the requirement for the employee to personally perform the assigned tasks. 

The employee is integrated into the employer’s organisational structure, often indicated by the provision of workspace within the company premises. Additionally, the employee doesn’t have the right to refuse instructions from the employer and must use the employer’s resources to complete their job duties. Employees are also required to follow the employer’s policies and guidelines and are prohibited from engaging in concurrent or conflicting activities.

Download a free employment contract for Austria through Native Teams.

Oral, written or electronic employment contracts

Employment contracts can be verbal, written, or implied through consistent actions, though having a written agreement is recommended. If there’s no written contract, employers must give employees a written statement outlining the key terms of the employment arrangement at the beginning. However, certain contracts, like those for apprenticeships, require written documentation to protect the employee.

Working hours 

Daily working hours are generally limited to 8 hours, and weekly working hours are capped at 40 hours unless otherwise specified. However, a collective agreement may allow for a normal daily working time of up to 10 hours if the Federal Act provides for shorter working hours.

Employees may have flexible working hours if they can set the start and end of their daily working hours within an agreed timeframe. These flexible hours must be regulated through a company agreement or a written agreement in companies without a works council (flexitime agreement).

Night work

An individual is considered a night worker if they regularly work between 10 PM and 5 AM or work at least three hours during this time for a minimum of 48 nights annually.

Night workers are entitled to additional rest periods if their regular working hours exceed 8 hours. According to these regulations, they are also entitled to a free health assessment before starting night work and periodically thereafter.

Breaks and types of leaves

Employees working more than 6 hours in a day are entitled to a minimum 30-minute rest period. These breaks are intended for rest and rejuvenation and aren’t considered part of working hours. If needed, the 30-minute break can be split into shorter breaks, each lasting at least 10 minutes. 

After the regular working day, employees are entitled to 11 hours of uninterrupted leisure time, known as the daily rest period. However, certain collective agreements may provide exceptions to these rules. For example, in industries such as hospitality, catering, and accommodation, the daily rest period can be reduced to eight hours. On-call duty may also shorten the mandated eleven-hour rest period.

Additionally, the law requires a continuous rest period of 36 hours over the weekend.

Public holidays

The public holidays in Austria include New Year’s Day on January 1st, Epiphany on January 6th, and Easter Monday, which varies each year, usually falling in March or April. Ascension Day is observed 40 days after Easter Sunday, followed by Whit Monday 50 days after Easter Sunday, and Corpus Christi 60 days after Easter Sunday. 

The National Day is celebrated on October 26th, and All Saints’ Day on November 1st. Immaculate Conception is observed on December 8th, Christmas Day on December 25th, and St. Stephen’s Day on December 26th.

Salary

Through negotiations between the Austrian government and representatives of collective agreements, a de facto minimum remuneration of €1,500 per month has been established. This remuneration includes the basic salary, overtime pay, bonuses, and idle-time pay but excludes certain items like tax-exempt per diems, housing, transportation, and meal expenses.

To calculate the salary and taxes in Austria, click here.

Sick leave

Employees usually need to provide a doctor’s sick note as proof of entitlement to receive sickness cash benefits. These benefits are calculated based on the employee’s previous salary, with an assessment ceiling of EUR 5,550 per month, excluding any income above this amount.

If an employee is unable to work due to illness or an accident after starting their job and is not at fault, they are entitled to continued wage payments for 6 weeks. Sickness cash benefits, available to all employees, recipients of unemployment benefits, and participants in vocational rehabilitation, are set at 50% of the salary for the first 42 days of sickness. After this period, the benefit increases to 60% from the 43rd day onward.

Parental leave

Parental leave, which involves taking time off work without pay, can be taken for at least 2 months and up until the child turns 2 years old, provided the child lives in the same household.

Parental leave usually begins for the first parent 8 to 12 weeks after childbirth, marking the end of the maternity protection period. For mothers, this leave may start after a period of vacation or sick leave. If the first caregiving parent is not entitled to parental leave, the other parent can claim their leave afterwards. 

Parental leave can be divided between the parents twice, resulting in 3 separate leave periods (e.g., mother/father/mother), each lasting at least 2 months. During the first parental leave transition, both parents can take leave simultaneously for 1 month, reducing the overall duration by 1 month.

Paternity and maternity leave

Expectant mothers are entitled to 16 weeks of maternity leave, starting 8 weeks before the expected due date and continuing for 8 weeks after childbirth. Fathers are entitled to 1 month of paternity leave, which can be taken within the first 91 days after the child’s birth.

During paternity leave, fathers can apply for compensation under the Family Time Bonus Act for up to 31 days, receiving €22.60 per day, with a total maximum compensation of €700.

Ordinary dismissal by the employer

An employer can terminate employment immediately if there are justified grounds for dismissal, known as “entlassungsgründe.” These grounds include actions that damage the trust relationship with the employer, such as dishonesty or unauthorised disclosure of confidential information. Embezzlement, or the misappropriation or theft of the employer’s funds or property, is another ground.

In such cases, Austrian law does not require the employer to follow formal procedural steps for the dismissal process. The termination can occur immediately upon the employer’s discovery of the justified grounds.

Notice period and challenging the dismissal

Termination with notice typically doesn’t require a reason and is governed by statutory notice periods, which vary based on the length of employment and specific termination dates. 

Often, employers and employees agree to a probationary period during which either party can terminate the employment relationship immediately without providing justification. This probationary period generally lasts for the first month of employment as a standard practice.

For white-collar workers, the notice period for termination by the employer is at least 6 weeks, usually ending at the calendar quarter unless otherwise specified in employment contracts and collective agreements. For blue-collar workers, the notice period is 2 weeks, with longer periods often stipulated in collective and works agreements.

When an employee terminates their employment, white-collar workers have a notice period of 1 month, ending on the last day of the month. For blue-collar workers, the notice period is 2 weeks unless otherwise agreed upon. Notice can be given in writing without needing to provide reasons.

Rights and obligations of unemployed individuals

Employees who lose their jobs or become unemployed can access unemployment benefits (Arbeitslosengeld) to support themselves while they actively search for new employment. 

To be eligible for unemployment benefits, individuals must be jobless, willing, and able to work by accepting suitable job offers, and they must be available for work as required by the employment office. 

They must also not have completely exhausted their entitlement to benefits. Additionally, there is a requirement for a minimum period of insurance coverage: individuals must have been covered by unemployment insurance for at least 52 weeks within the last 24 months or 26 weeks within the last 12 months if they are under 25 years old.

Severance pay

Under the new severance model, all employees who began working after January 1, 2003, are legally entitled to severance compensation, even if they resign without prior notice. In Austria, employers must contribute 1.53% of their employees’ gross wages, including bonuses, to a severance fund known as “Abfertigungskasse.” These contributions begin in the second month of employment.

Probationary period

In Austria, the probation period is restricted to a maximum of 1 month. Any contractual agreement extending this period would be invalid. However, to extend the “testing” period for an employee, employers can offer a fixed-term contract initially, such as for 6 months, which includes a one-month probation period.

Prohibition of competition 

During the term of their employment contract, employees are prohibited from operating an independent commercial enterprise or engaging in commercial transactions within the employer’s line of business for their own benefit or on behalf of third parties. If an employer wishes to extend the statutory non-competition clause, it must be specified in the employment contract.

Such a clause must be carefully drafted to avoid excessively restricting the employee, as it could be deemed invalid if it imposes unreasonable limitations. There is no statutory provision that prevents an employee from engaging in competitive activities after the employment relationship has ended.

Remote working policy

Employees are considered to be working from home if they perform their job duties at their residence. 

In essence, an employee has no inherent legal right to work from home and cannot unilaterally decide to start working remotely without the employer’s consent. Similarly, an employer cannot unilaterally require an employee to work from home or retain the authority to impose such a condition at will.

The necessity for mutual agreement ensures that both parties have discussed and consented to the working-from-home arrangement, fostering a cooperative working relationship and addressing any concerns or requirements either party might have about remote work.

According to the new legal provisions, any agreement regarding working from home must be formalised in writing.  This written documentation clearly outlines the terms and conditions under which the employee will be working from home, providing a clear reference for both parties.

However, it’s important to note that if such an agreement isn’t documented in writing, the validity of the arrangement isn’t automatically compromised based on the current draft provisions.

Responsibilities within a remote work arrangement

Employers are generally required to provide employees with the necessary digital work equipment (such as IT hardware and a data connection) for regular work performed from home. However, this obligation doesn’t apply if the employee works from home occasionally or on a one-time basis without intending to make it a regular arrangement. 

If an employee agrees to use their own digital work equipment, the employer must compensate them with a lump-sum payment for the reasonable and necessary costs incurred.

Health and safety at home

The Health and Safety at Work Act establishes principles of worker protection, detailing employers’ general obligations such as conducting risk assessments, worker deployment, disseminating information, providing instructions, implementing preventive measures, and ensuring safe and healthy working conditions. The legal provisions cover all physical structures and areas on company premises where workplaces are located or accessed by employees.

Work equipment includes all machinery, apparatus, tools, devices, and systems employees use. It must be suitable for its intended use, meet relevant legal standards, and display a CE mark to indicate compliance unless there is evidence to the contrary.

Intellectual property rights

Employees retain the intellectual property (IP) rights to the works they create during their employment. However, it is common for employers to include clauses in employment contracts that address IP ownership. These clauses usually stipulate that IP rights for works developed within the scope of the employee’s job responsibilities are transferred to the employer.

Employee data privacy

Employers in Austria must comply with key data protection principles when handling employee data. This requires obtaining explicit consent from employees before collecting or processing their personal information, unless the processing is necessary to fulfill contractual obligations or legal requirements.

What are the advantages of hiring employees from Austria vs other countries?

Hiring employees from Austria presents several notable advantages. The country’s strategic location in the heart of Europe offers logistical advantages. Employees from Austria can facilitate business operations and networking within the broader European market, enhancing efficiency and market reach.

Cultural fit and integration are other key benefits. Austrians typically share similar cultural values with other Western European countries, making it easier for them to integrate into international teams. Their understanding of Western business practices can benefit companies looking to expand or operate in Europe.

In comparison to other countries, Austria offers a unique combination of high education standards, multilingual capabilities, and a strong work ethic. While countries like India or the Philippines might offer cost advantages due to lower labour costs, Austria’s skilled and reliable workforce can provide long-term benefits that outweigh initial cost considerations.

Why use Native Teams for hiring in Austria?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.