Minimum Salary Level Increased

The situation

Effective January 1, 2019, the minimum monthly salary for foreign workers in Austria has increased as follows:

A closer look

• Existing employees. Employers of foreign nationals currently under an EU Blue Card or Red-White-Red Card need not increase the foreign national’s salary to comply with the new rule.
• Initial and renewal applications. Employers of foreign nationals seeking to obtain or renew an EU Blue Card or Red-White-Red Card on or after January 1, 2019 must increase the foreign national’s salary to comply with the new rule. Immigration applications that do not meet the minimum salary will be refused.
• Pending applications. Employers of foreign nationals with pending applications as of January 1, 2019 need not increase the foreign national’s salary to comply with the new rule.
• Unaffected categories. For the Short Term Work Permit, the Short Term Secondment Permit, and the EU Intracompany Transferee (ICT) Permit, applicants and permit holders must meet the salary rate per the applicable collective bargaining agreement for the position. This requirement is not affected by the current changes. Employers are advised to monitor changes in collective bargaining agreements to ensure compliance.

Reminders on other requirements

• Collective bargaining agreement. As before, salaries must also meet the salary rate set by collective bargaining agreement for the proposed position, if applicable. Exact figures depend on the company industry and the foreign worker’s qualifications and experience.
• 14 payments per year. As before, salaries must be paid per the above listed amounts 14 times per year in general (applicable to local hire permits).  
• Benefits and allowances. As before, benefits and allowances typically cannot be included in the minimum salary calculation. Only a single assignment allowance can be included, if this amount is in compensation for work activities (not a reimbursement of expenses), is paid via payroll as part of the salary, and is taxable.
• Currency. As before, employers are required to guarantee the salary in EUR regardless of payroll location and/or exchange rate fluctuations.
• Dependents. In case of accompanying dependents, the foreign worker’s income must be sufficient to provide for the family: EUR 1,398.97 gross per month for married couples and an additional EUR 143.97 for each child.

Background

Austria increased the salary thresholds by an average of two percent for 2017 and 2018 over the various permit types. Salary increases between one and 10 percent are normal in Europe, typically seeking to keep the salary level aligned with the cost of living. The relatively high increase for Red-White-Red Cards reflects the authorities’ more critical approach to this permit type, as also demonstrated by recently-implemented stricter eligibility criteria.

Looking ahead

Fragomen expects the salary requirements for Red-White-Red Cards to increase in 2020 and will report on increases and other relevant issues.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to emea@fragomen.com.