(The term Gastarbeiter is also widely used.) Foreign labour plays an important role in Austria. Since 1965 (immigration policy was previously restrictive) there has been an inflow of some 1.1 million foreign workers, and around half of these have stayed. During the economic boom of the early 1970s, the employment of foreign labour reached its first peak of 226, 000, representing 8.7% of all employees, in 1973. The figures declined in the years that followed, as a result of the worsening economic situation, and it was not until the end of the 1980s that they began to rise abruptly, from 150, 000 in 1988 to 278, 000 in 1993, i.e. an increase of over 80%. In 1996, the total number of foreign nationals including EEA citizens employed in Austria was a good 300, 000 (representing around 10% of all employees), of whom 257, 000 were workers from outside the EEA holding mandatory work permits. The great majority (some 150, 000) originate from the former Yugoslavia, plus 52, 000 from Turkey and some 38, 000 from the East European countries.

The employment of foreign labour takes place on the basis of the 1975 Employment of Foreign Nationals Act (Ausländerbeschäftigungsgesetz), which was comprehensively amended in 1990. That amendment included the establishment of an overall national quota for foreign labour (Bundeshöchstzahl), i.e. an upper limit taking account of circumstances affecting not only the domestic labour market but also the social institutions and acceptance by the population at large. This quota was initially set at 10% of the total available labour force (Austrian plus foreign nationals in employment and unemployed), in 1994 at 9% (with EEA citizens no longer counted as foreign workers) and in 1995 at 8% or up to 9% when including young persons, Bosnian war refugees and managerial staff. Individual Land quotas may be fixed within this overall national quota. Within the quotas work permits may be granted without applying any domestic labour market test, but permits in excess of the quotas may be issued only on pressing grounds and for labour which is occupationally essential. Priority is given, in addition to foreign nationals who are receiving unemployment benefit, to the families of foreign nationals already resident in Austria.

In accordance with the Act, foreign workers to and in respect of whom the various types of employment and work permit are issued (see employment of foreign nationals) must enjoy at least the same pay and other employment conditions as those applicable to the majority of Austrian employees in the same establishment who are comparable in terms of performance and skills. The Act also makes the issue of work permits conditional on the availability of local housing, although this requirement is difficult to enforce in practice.

In periods of full employment, the use of foreign labour helps not only to keep down inflation and promote growth by reducing bottlenecks in the labour market, but also to preserve the existing employment structure. In periods when there is a labour surplus, the reasons in favour of an inflow of foreign labour are mainly humanitarian.

Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.