The Employment of Foreign Nationals Act applies to the employment of third-country nationals in Austria. An example:
Tom is a US citizen, a college graduate who lives in Texas and has been working for several years, exclusively online, as a freelancer in sales and marketing for an Austrian start-up in the tech sector. When Tom travels to Austria one day to meet some of his colleagues in person, he likes it so much that he decides to move to Austria and continue working for his Austrian employer. He suggests this to his employer, who agrees to help him with the immigration formalities and provide him with all the documents so that he can be legally employed in Austria.
The regulations for employment relationships of foreigners in Austria are governed by the Employment of Foreigners Act. According to this law, every person who does not have Austrian citizenship is considered a foreigner. However, there are also numerous exceptions for non-Austrians. For example, persons entitled to asylum, diplomats, pastoral workers, reporters for foreign media, and, above all, EEA citizens and their dependents are excluded from the scope of application of the Employment of Foreign Nationals Act.
Employment within the meaning of this Act is basically any employment relationship, working contracts similar to employment (such as a freelance service relationship or self-employment exercised in a relationship of dependence), training relationships, labor leasing, and company postings in Austria.
If the provisions of the Employment of Foreign Nationals Act apply to an employment relationship, the employee may not start work until an official permit has been issued by the Employment of Foreign Nationals Authority. The regional office of the Public Employment Service Austria (AMS) is responsible for this.
Before the employment of a foreigner in Austria begins, an employment permit must be applied for and the employee may only start the employment relationship once this permit has been granted. The employer must then report the beginning (and after the end of employment) of an employment relationship with a foreigner to the competent regional office of the AMS within three days.
Basically, a residence title only creates the prerequisite for legal residence in Austria, whereas an employment permit is a prerequisite for being able to legally pursue gainful employment in Austria. Many residence titles (such as Red-White-Red Cards or Blue Card EU) combine both the residence title and the employment permit in one document. The advantage of such residence titles is that they can be applied for at the competent immigration authority in one go. The immigration authority then forwards the application to the competent office of the AMS for examination of the prerequisites according to the Employment of Foreign Nationals Act. If the requirements for the issuance of the residence title and the employment permit are met, the relevant residence title is issued by the immigration authority.
Since Tom has a university degree and also gets a relatively well-paid job, he is granted a Red-White-Red Card as a key worker. With this residence title, the AMS had to carry out a replacement worker procedure (this checks whether suitably qualified workers are available on the Austrian labor market), but could not find any suitable alternative candidates. Therefore the employment permit was granted to Tom. As soon as Tom has the coveted residence title in his hands, his employer can register him with social security and he can start working.