Employee registration and the Austrian Anti-Wage and Social Dumping Act (LSD-BG)
Common mistakes and how to avoid them

1. Why employee registration in Austria is especially important

Companies doing business in Austria need to manage not only tax matters and permanent establishments but also employee registration. This is particularly critical for Slovak or other foreign companies sending or employing staff in Austria, where strict reporting requirements apply.

Special attention should be given to the Anti-Wage and Social Dumping Act (LSD-BG), which ensures that foreign workers are not paid less than their Austrian counterparts. Failure to comply can lead to substantial fines. Correct registration and compliance with wage regulations are essential to avoid financial and legal problems.

2. Correct employee registration

Every employee working in Austria — whether for a project or permanently — must be properly registered. Employers are required to register employees with the Austrian Health Insurance Fund (ÖGK) before they start work.

For cross-border workers, there are additional obligations. For example, when posting employees, companies must submit a ZKO notification (to the Central Coordination Office of the Ministry of Finance) before work begins.

Key points to watch:

• Timely registration: Registration must be completed before the employee starts work; late registration is not permitted.
  
  Tip: Internal controls help ensure all employees are registered on time.


• ZKO notification for postings: Companies posting staff to Austria must submit a notification to the ZKO in advance.
  
  Tip: If you post employees regularly, establish clear processes to avoid delays.

3. What employers need to know about the Anti-Wage and Social Dumping Act

The LSD-BG protects workers in Austria from being paid below statutory or collectively agreed minimum wages. Violations can result in substantial fines.
Many companies underestimate that minimum wages in Austria are determined by industry-specific collective agreements, which also regulate allowances, overtime, and bonuses.

Key points to watch:

• Industry-specific minimum wages: Austria does not have a general minimum wage — wages depend on sector-specific agreements.
  
  Tip: Before posting or hiring staff, check the applicable collective agreement to avoid penalties.


• Comply with working time rules: Allowing employees to work excessive hours or failing to pay statutory supplements can also lead to fines.
  
  Tip: Detailed time tracking helps prevent working time violations and ensures compliance.

4. Don’t forget documentation obligations

A common mistake when posting employees to Austria is incomplete documentation. Employers must have certain documents available at the worksite, including employment contracts, payslips, and social security records.

During inspections, these documents must be presented immediately. If they are missing, fines may apply — even if the employment relationships are otherwise compliant.

Key points to watch:

• Keep documents ready: Employers must have payslips, employment contracts, and social security confirmations on hand.
  
  Tip: A digital system or well-organised filing helps ensure documents are always accessible.


• Translation of documents: Certain documents, especially for postings, must be available in German.
  
  Tip: It’s worth having employment contracts and payslips translated in advance by a professional.

5. Penalties and consequences for violations

Mistakes in employee registration or violations of the Anti-Wage and Social Dumping Act can lead to hefty fines.
A particular issue is that fines are imposed per affected employee — meaning even small mistakes can become very expensive.
In some cases, repeated violations can even lead to a ban on employing staff in Austria, severely impacting business operations.

Key points to watch:

• Substantial fines: Penalties can run into several thousand euros per employee.
  
  Tip: Regular internal compliance checks help spot and fix errors early.


• Employment bans: Repeated violations may result in temporary bans on employing workers in Austria.
  
  Tip: If in doubt, seek professional advice early to avoid fines and contract losses.

Conclusion: Careful preparation prevents heavy fines

Registering employees in Austria is a formal but essential step for companies operating here. Failure to comply with legal requirements or the Anti-Wage and Social Dumping Act can result in heavy fines and legal problems.
Thorough preparation, clear internal processes, and regular reviews of legal obligations are crucial to avoid costly mistakes. Companies employing staff in Austria regularly should also consider long-term professional advice to stay up to date with legal requirements.

(This article is for general information only and does not replace professional legal or tax advice. For specific questions and personal support, please feel free to contact us.)