Stricter penalties more bureaucracy
On January 1, 2017, the provisions on wage and social dumping previously regulated in various laws were incorporated into a new law, the so-called LSD-BG. This law introduced a number of innovations, particularly with regard to the employment of foreigners in Austria. The majority of the law is dedicated to enforcing the law abroad. Although foreign companies could already be punished before January 1, 2017, it was largely impossible to levy penalties.

The main changes are:
– So-called “high earners” in the group who earn more than 1.25 times the maximum monthly social insurance contribution base (from 2017 EUR 6,225) are not considered to be secondments. Guest lecturers at universities and universities of applied sciences who work in Austria for a short period of time as part of training/continuing education or research are also not considered to be secondments. In the cases listed above, neither a ZKO notification is required, nor are salary documents to be kept ready. However, it must be possible to provide proof of the salary level of high earners.

– For assignments of up to 2 months per calendar year, the introduction of a so-called “group privilege” is planned (no application of the LSD-BG), provided that the business purpose of the foreign company is not the provision of labor and skilled workers with special expertise are employed in Austria for the purpose of training, R&D, exchange of experience or collaboration in cross-border functions.

– In the case of assignments to Austria, Austrian continued remuneration payments, notice periods and the collective agreement for temporary employment must be observed.

– In the construction sector, client liability arises if the client was aware of circumventions of the provisions or if there were obvious indications of such circumventions.

– Simplified posting notification: The obligation to submit a ZKO 3 or ZKO 4 notification is still provided for The notification must now be submitted electronically before the start of the posting or assignment – the previous obligation to submit the notification seven days before the posting/assignment has been dropped. In the transport sector, however, the notification must be submitted before entering the federal territory.

However, there is also the possibility of a so-called “framework notification”. Within a corporate group that agrees repeated cross-border assignments and in fulfillment of a service contract, a notification of posting/assignment in relation to a domestic client/employer can be submitted for a period of up to three months prior to the first commencement of work. If the legal requirements are met, a new general notification can be submitted.

If the cross-border assignment includes several clients who have concluded similar service contracts with the employee, the so-called collective declaration of all clients can be stated, provided that the fulfillment of the service contracts is closely related in terms of location and time.

– All necessary payroll documents, ZKO notifications and A1 forms must be kept available in electronic form. The payroll documents must be provided in German, with the exception of the employment contract. The location of the payroll documents must be stated in the ZKO notification, although it no longer has to be the construction site, for example. It is also possible to keep the documents with a contact person to be named, a group company, a branch office or a tax consultant. However, the employer must continue to keep these documents available in the event of a transfer.

– Criminal judgments can now also be served and enforced in other EU member states and EEA states. However, the LSD-BG only provides guidance on how to initiate service and enforcement in another country.