HR Solutions & Employee Relations in Austria with IRIS
IRIS HR consulting has experience helping businesses succeed in Austria. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in Austria to help businesses hire, recruit, and pay staff overseas. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.
Take your business to Austria with IRIS HR Consultancy.
Global expansion in Austria
A key connection in the heart of Europe, Austria is one of the more stable foreign markets out there. An affluent, upcoming territory, Austria has a major connections to outside markets that can help businesses enter the European market. Austria’s thriving economy is built on everything from engineering, manufacturing, and luxury goods production, to retail and finance.
With no significant trade barriers, Austria is a strong export partner to the US. Austria is considered a desirable pilot market fort those experimenting with business growth into foreign markets. As a result of its geography and history, Austria business is often regional, but cover several market points in Central/ Eastern Europe (in the Balkans).
For businesses, Austria has an attractive social safety net and a considerably progression employment regime. Their sense of social progress is matched by economic opportunity and harmony.
A Guide to Employing Staff in Austria
Everything you need to know about the employment laws and compliance requirements in this country
Austria and the Balkans
Austria is a bridge-builder for businesses looking for gentle entry into the competitive, yet rewarding, European marketplace. It’s relished for its geo-strategic role in facilitating exports and valuable trade, especially for American firms. This country is a key investor in EU relations, especially for Middle and Eastern European stretches. The trade secured for this country is traditionally strong and established across key partners, like Germany.
Establishing your business in Austria
Embarking on a global expansion is a strategic move to gain extra value from foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.
Before establishing a business, you must ensure your operation is compliantly managed in league with Austrian governmental guidance. There are a few mandatory and practical steps in setting up your business in Austria, including:
- Acquire a trade license at the district authority (Bezirkshauptmannschaft) or municipal authority (Magistrat).
- File with the Austrian Commercial Register (Firmenbuch), which can be run through provincial courts (Landesgerichte).
- Paid all the appropriate fees, including a trade license.
- Paid value-added tax (Umsatzsteuer/Mehrwertsteuer)/ corporate taxes.
Employment laws in Austria
When first expanding your business into Austria, navigating local laws, legislation and rules of employment laws is no simple feat, especially if you’re unfamiliar with the country’s driving policies. Throughout Europe, these laws are almost never universal. Rather, employment is dynamic and reflects the country social, economic, cultural opportunities.
Did you know?
Pregnant employees are not allowed to work for 16 weeks: the eight weeks immediately before the expected day of childbirth and for eight weeks after the birth.
Hiring & recruitment in Austria
When getting your first hire in Austria, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include.
Employment contracts in Austria
Austria is known for its socially progressive programme, otherwise known as “collective bargaining”. This describes a mechanism that entitles employees to representation when negotiating the conditions of their employment.
Collective bargaining can influence employee wages and working conditions (including benefits, compensation, and other aspects of their employment), which should be considered in your HR solution. Collective bargaining is key in wage flexibility, but also results in better employee satisfaction (Austria ranks well for life and work satisfaction). Collective bargaining results in mutually beneficial terms under employment because wages and conditions can be negotiated to suit both employee/ employers.
Equal Opportunities in Austria
Equal treatment legislation in Austria offer guidance on social equality in the workplace. This ensures that discrimination is illegal – before, during, or after employment in Austria. Discrimination is anything that unfairly represents an employee based on race, age, gender, or sexual orientation.
What are the working hours in Austria?
The maximum working week in Austria is 40 hours, or approximately eight hours a day. These hours – 40 hours weekly, 8 hours daily – are the basic terms for fulltime employment, often between Monday and Friday. If this time is surpassed, into a nine hour week for example, then the working week should be shortened.
Without extenuating circumstance, working time cannot exceed 10 hours a day or 50 hours weekly.
Working overtime in Austria
Overtime in Austria is allowable, as long as it’s considered reasonable.
Generally, working weeks should not exceed 50 hours, or 10 hours daily. Beyond these hours, work becomes overtime. Yet, expectations for overtime should be managed by the employer. In scenarios where overtime is in a barraging agreement, it’s typically at 50% on hours worked over the limit.
Public Holidays in Austria
In Austria, public holidays are normally cultural, religious or national holidays. In this time, many public institutions, including banks, are closed – and people normally spend time with their families.
There are 12 public holidays:
- New Year’s Day
- Easter Monday
- Labour Day
- Ascension Day
- Whit Monday
- Corpus Christi Day
- Assumption Day
- National Day
- All Saints’ Day
- Christmas Eve
- Christmas Day
- St. Stephen’s Day
Sick leave in Austria
Employees are entitled to full pay for sick leave, which can range anywhere from six to sixteen weeks. This benefit depends on the length of service from the employee.
Once this benefit is exhausted, employees can turn to the statutory social insurance system, and the benefit has ceiling at 50% of the employees wage. Yet, the pay can increase put to 75% of the previous salary if the employee has dependants.
Maternity leave and Parental Allowance in Austria
There is a protection period (known as Mutterschutz) for pregnant employees, which begins eight weeks prior to the birth of a child, and ends eight weeks thereafter. Maternity allowance (referred to as Wochengeld) is received by the employee, who remains under contract, but is not allowed to work.
Mother and fathers alike are entitled to parental leave, but this lasts up until a child reaches 24 months of age. This is bookended by a minimum leave allowance of two-weeks. If these conditions are met, the takers of parents leave entitled to childcare allowance (Kinderbetreuungsgeld).
Vacation in Austria
By law, every participating country in the European Union offers four weeks of paid vacation. Austria, ahead of its fellow countries, offers the most time-off, with a legally compulsory 22-paid vacation days and 13 paid public holidays.
Retirement and pension in Austria
Austria is considered one the better European locales to retire to, because of its infrastructure and standards of livings. After social security contributions, employees can claim a generous pension after reaching an age limit (normally 50+). The majority of pensions are not private, but remain public.
There are types of pensions
- Pension funds (Pensionskassen)
- Occupational collective insurance (Betriebliche Kollektivversicherung)
- Internal book reserves
- Support funds (Unterstützungskasse)
- Direct insurance
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End of Service
HR in Austria requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.
For these more complicated matters, you will need expert HR guidance to navigate Austrian employment laws and remain compliant.
- The employer may terminate an indefinite contract at any time with proper notice.
- Notice periods can be captured in collective agreements or employment contracts.
- Only in substantial or serious scenarios can a contract be terminated by the employer/ employee and where conditions become unreasonable to resume work and/or employee relations.
- Certain termination procedures should guide etiquette, especially where employment law is consulted and adhered to.
Severance in Austria
These schemes fall into two types: the old scheme, which refers to length of service, and applies to employment contracts commenced before 1 January 2003. The second, a new scheme, covers any employment after that time.
With the new scheme, employers should contribute a percentage of an employee’s gross wage and this goes into an “ employee provision fund”. On termination, this fund can either be received as a lump sum, or carried into a private pension.
Work councils, or Betriebsrat
For any organisation employing five or more staff, a work council must be established. A work council is not, however, legally sanctioned and in the absence of a work council employees may take the lead.
The size of a business determines the size of its corresponding work council. A company with 1,000 employees, for example, would have a work council of 13 employees.
Notice of dismissal should consult with work councils, especially if it’s requested.
Death & Disability Insurance in Austria
Both Death and Disability Insurance in Austria are usually built in features of occupational pension schemes. If no occupational pension scheme is in place, these insurances would be provided as stand-alone benefits.
Why Partner With IRIS?
When entering new, exciting countries in Europe, like Austria, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.
Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully complaint solution, IRIS can help businesses reach Europe, especially when they build bridges in Austria.
Our cost-effective, knowledgeable approach to HR in Austria makes us an ideal partner to commence your overseas plans.