New salary checks, documentation requirements to take effect Jan. 1

29 Dec 14

AUSTRIA

IMPACT – MEDIUM

What is the change? Effective Jan. 1, Austrian officials will begin checking to ensure that EEA- and Swiss-based employers are making remuneration, holiday and overtime payments to foreign employees if collective bargaining or other legal agreements require those payments. The government will also require that company documents such as employment agreements and pay records be kept in German.

What does the change mean? EEA- and Swiss-based employers should ensure that they are in compliance with agreements on remuneration, holiday and overtime pay and that copies of employment agreements and pay records are in German.

  • Implementation timeframe: Jan. 1, 2015.
  • Visas/permits affected: The changes affect the ZKO 3 Meldung declarations required of employees who are entering Austria to work for an EEA- or Swiss-based employer.
  • Impact on processing times: The changes do not affect processing times; they affect enforcement of agreements on pay and government documentation requirements.
  • Business impact: Businesses must prepare for inspection of their payments of remuneration, holiday and overtime compensation. They must also ensure that all necessary documents are available in German.
  • Next steps: EEA and Swiss employers should immediately make any necessary changes to comply with the new regulations by Jan. 1.

Background: The changes are a result of a Dec. 16 amendment to a 2011 law, which was designed to prevent companies from paying foreign employees lower salaries than Austrian employees. The amendment is aimed at making sure that employers are providing required remuneration, holiday and overtime pay in addition to meeting base salary requirements. It is also designed to make it easier for government officials to inspect for compliance by requiring that company documents be kept in German, as opposed to other languages.

BAL Analysis: Employers should conduct compliance checks now. The fines for noncompliance are stiff, ranging from €500 to €10,000 for first-time offenses. Violations include paying foreign employees less than is required, refusing to provide documents for inspection, and refusing to admit control officers onto company property.

This alert has been provided by the BAL Global Practice group and our network provider located in Austria. For additional information, please contact your BAL attorney.

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