Hiring International Employees in Compliance with the Law: A Practical Guide for Companies

Legal certainty begins before the job posting

It’s not just the candidate search that determines the success of an international hire—it’s the early clarification of the employment model, residency status, and employer obligations. This applies when hiring someone from an EU country, a skilled worker from a non-EU country, or when employing someone in a country where the company does not have its own subsidiary.

Each scenario involves different verification processes, responsibilities, and documentation. Those who wait until after a candidate has been selected to begin this process risk avoidable follow-up inquiries and organizational delays.

This article addresses the employment of international employees in Austria. The secondment of Austrian employees abroad is subject to its own tax, social security, and labor law requirements and will not be covered in depth here.

The key question before any international hire is therefore: Have all responsibilities been clarified before the employee starts work?

First, correctly classify the case: country of origin, role, and employment model

The review process begins with a few basic details: nationality, location of assignment, planned duration of employment, job duties, and employment model. These determine which departments are involved and what documentation is required.

Distinguish between the EU, EEA, Switzerland, and third countries

Cases involving the EU, the European Economic Area, and Switzerland must be distinguished from those involving third countries. However, a comprehensive assessment of residency status must always take the specific circumstances into account.

For prospective workers or skilled professionals from third countries, it must be determined which residence and work permits are required for employment in Austria. Depending on the employment situation, options may include, for example, the Red-White-Red Card, the Red-White-Red Card Plus, or a work permit issued by the Public Employment Service (AMS). The competent authorities review the respective requirements. Employers or private service providers cannot substitute for these official decisions.

Define the Position, Qualifications, and Employer’s Role

Before beginning the recruitment process, companies should document the job requirements, the intended occupation, the place of employment, the contract term, and the employer’s internal role. Nationality, destination country, qualifications, employment model, document status, and required translations should also be included in this initial assessment.

In the case of regulated professions or an unclear qualification status, the relevant authorities should be involved at an early stage. This allows outstanding requirements to be identified before the search, selection, and contract preparation have progressed too far.

Implementing International Employment in Compliance with the Law: The Six Steps

The specific requirements for each step depend on the individual case and the relevant authorities. A documented process ensures clear handoffs and makes pending decisions transparent.

1. Identify the need: Define the scope of the review

Assess the initial situation: Determine the review process.

Companies determine which qualifications are required, in which country the employment will take place, and how long the assignment is planned to last. At the same time, it is necessary to assess which resources the HR department, payroll, and the relevant business unit can provide internally.

Next, define the desired employer role. Direct hiring, temporary staffing, Recruiting Process Outsourcing (RPO), or Employer of Record (EOR) may be options depending on the needs and employment structure. RPO pertains to the recruiting process, while an EOR can assume employer responsibilities under certain legal conditions. Defining these roles early on prevents the search, administration, and employer obligations from becoming entangled.

2. Attracting Candidates: Communicating Requirements Transparently

Document the profile: Align the selection process.

The search and selection should be based on a coordinated requirements profile. It describes the job duties, qualifications, experience, work location, and realistic conditions of employment.

During the selection process, technical aptitude, professional experience, and motivation can be evaluated together. For international hires, this also includes determining whether existing documents provide verifiable proof of qualifications and whether translations are required. The evaluation should be documented and coordinated with the relevant department. This provides recruiting, the HR department, and external support with a common working basis.

3. Clarify Entry: Check Requirements Before Starting Work

Check Authorizations: Prepare for a Decision.

Residence permits, work authorizations, potential employment permits, document status, and official jurisdictions constitute a separate review process. For third-country nationals, the official information from the Public Employment Service (AMS) and the relevant Austrian residency authorities is authoritative.

Depending on the employment situation, different procedures may be required. For the Red-White-Red Card, the AMS reviews the relevant labor market-related requirements. The competent residency authority decides on the issuance of the residence permit. For other employment scenarios, a separate work permit may be required.

Process support can coordinate documentation or prepare for interactions with authorities. It does not prejudge any decision. The application is reviewed by the respective competent authority, which then decides on the specific case.

4. Establishing the Employment Relationship: Coordinating the Contract, Payroll, and Social Security

Assign Responsibilities: Ensure Accurate Payroll Processing.

International employment involves more than just the employment contract. Payroll processing, income tax withholding, social security contributions, and any reporting requirements must also be tailored to the specific case.

Companies should document who provides the necessary information, who is responsible for payroll processing, and how inquiries are handled. The chosen form of employment influences this distribution of responsibilities. Therefore, the HR department, payroll, the relevant business unit, and, if necessary, external consultants must all use the same documented baseline. Specific requirements arise from the employment situation and the decisions of the relevant authorities.

5. Prepare for arrival: Combine onboarding and integration

Plan transitions: Ensure readiness to work.

Company-led onboarding and administrative arrival procedures require separate responsibilities but must be timed to align. The workplace, access, orientation, and team communication are the company’s responsibility.

Organizational handoffs can be supported as agreed. This includes, for example, coordinating documents, appointments, housing, and integration issues. A designated contact person consolidates open items and coordinates the next handoff point. This ensures the new employee knows who to turn to while the department prepares them to start work.

6. Manage Deadlines: Document Supporting Documents and Review Changes

Monitor Status: Identify the Need for Action.

The case file remains relevant after the employee starts work. Companies should document expiration dates, submitted supporting documents, outstanding inquiries, external appointments, and feedback from authorities in a traceable manner.

Changes to the job, work location, duration of employment, or employment model may require a re-evaluation. The same applies if personal or organizational details relevant to the employment case change. Companies should therefore designate who receives such changes and forwards them to internal or external departments. The responsible department decides which further steps are necessary in each individual case.

Who can support the process? Clearly assign responsibilities

Who can help my company employ foreign workers in compliance with the law?

The answer depends on the specific task: Public agencies decide on administrative procedures. Private partners can assist with the search, preparation, coordination, and employment administration, depending on the assignment.

Public Agencies and Official Advisory Services

The Public Employment Service (AMS) is a central point of contact for companies with questions regarding the employment of foreign workers and skilled professionals. Within the framework of the applicable procedures, the AMS reviews labor market-related requirements and decides on the corresponding work permits.

The relevant residence and settlement authorities are other important points of contact. They review the requirements under residence law and decide on the corresponding residence permits. Depending on the case, Austrian diplomatic missions abroad may also be involved in the process. Which agency is responsible depends on the individual case.

Private Support Throughout the Employment Process

The roles of private support providers should be clearly distinguished from one another:

• Recruitment agencies: A recruitment agency can handle the search, selection, and pre-qualification of candidates.

• Relocation support: Relocation support can assist with document coordination, housing, appointments with authorities, and integration.

• Specialized legal advice: Specialized legal advice examines complex individual cases involving labor, residency, tax, or social security law.

• Employer of Record (EOR): Depending on the legal structure of the employment model, an Employer of Record can assume employer functions as well as tasks such as payroll, tax withholding, social security, and local employment administration. In doing so, the labor law requirements—and, where applicable, the temporary staffing law requirements—of the respective host country must be taken into account.

In an Employer of Record arrangement, day-to-day operational management and the agreed-upon employer functions or administrative tasks may be distributed among different parties. Whether and in what form this is permissible depends on the specific structure of the arrangement and the applicable legal requirements. This model also does not replace an official decision and does not relieve the parties involved from verifying their respective obligations.

Concise Checklist Before the Start of Work and During Employment

This checklist supports structured case handling. It does not replace a comprehensive review of the legal requirements. Each item must be assigned on a case-by-case basis to the company, the employee, the competent authority, or a designated support provider.

• Case Assessment: Record nationality, work location, duration of employment, and employment model. Designate a person responsible for internal coordination.

• Job Duties and Qualifications: Document qualifications and intended occupation. Verify the status of documents and record any required translations. If questions remain, identify the responsible authority.

• Residence and Work Permits: Document required checks, outstanding inquiries, and the competent authority. Record external appointments with responsible parties and the processing status.

• Employment Relationship and Payroll: Tailor the employment contract, payroll, income tax withholding, social security, and any reporting obligations to the specific case. Document in writing the division of responsibilities between the company and the designated support provider.

• Onboarding: Prepare the workspace, access, orientation, and team communication. Coordinate administrative arrival matters separately and specify the next handover point.

• Changes and Expiration Dates: Review relevant changes to job duties, work location, duration, or employment model. Continuously document supporting evidence, feedback, and expiration dates.

• Responsibility Check: Verify that the company, employees, government agencies, and external support providers are aware of their respective responsibilities. Delegate employer obligations only where the chosen model and agreement permit this under the law.

If a specific case is unclear, consult the most current official guidelines or seek qualified legal advice.

Conclusion: International employment requires clear handoffs

Legal certainty does not mean having to resolve every special case internally, but rather managing responsibilities, documentation, and handoffs clearly and at an early stage. Companies should first classify the country of origin and the employment model. Afterward, regulatory reviews, recruiting, contract preparation, payroll, and onboarding can be coordinated in an organized manner.

Four points are crucial:

1. Reviews begin before the employee starts work.

2. Employer obligations are documented in a traceable manner.

3. Changes are kept under close watch.

4. Regulatory decisions are respected.

Private support services can handle or coordinate individual process steps. However, responsibility for each task must remain clearly defined.

Would you like to implement international employment in a legally compliant and efficient manner? Let us advise you without obligation.