Section 26 para 6 Employment of Foreigners Act (AuslBG – Ausländerbeschäftigungsgesetz) imposes special monitoring and reporting requirements on companies that subcontract work to other companies within the scope of their business activities.
The subcontracting company must request the subcontractor to provide proof of the necessary permits for any foreigners employed. This request has to happen even before the start of the contract fulfilment. The proof must be provided to the subcontracting company within one week. This includes, e.g., employment permits, secondment permits or the Red-White-Red Card.
It is not necessary to verify the comprehensiveness and authenticity of the documents submitted. If the subcontractor does not meet the one-week deadline or if the documents are obvious forgeries, the Central Co-Ordinating Agency for monitoring illegal employment (ZKO) of the Federal Ministry of Finance (BMF) must be notified.
If the subcontracting company does not comply with this requirement and if foreigners are illegally employed by the subcontractor, an administrative fine may also be imposed on the subcontracting company. Depending on the severity of the case, this can range from 1,000 euros to 50.000 euros! This may also result in an extended liability for unpaid wages of the subcontractor.