The employee was standing outside an Apple re-seller called McShark in a shark suit to advertise the opening of the new electronics store in Vienna.
Police officers walking past demanded he remove his shark head, but the man refused, saying he was "just doing his job".
He was then arrested and handed a fine that could be up to £130.
It comes after new restrictions came into force in Austria at the beginning of the month banning the wearing of the full Islamic veil.
Also prohibited are clown disguises, medical masks and scarves to cover faces, with residents only permitted under certain conditions to wear them in public.
The restrictions are aimed at "ensuring the cohesion of society in an open society"
It is thought the man in the shark suit was reported to police by a member of the public who wanted to make a point of the new piece of legislation.
In passing the new legislation, officials in Vienna said: 'Acceptance and respect of Austrian values are basic conditions for successful cohabitation between the majority Austrian population and people from third countries living in Austria.' The new laws also apply to visitors and tourists.
Advertising agency Warda Network, who were at the McShark opening, wrote on its Facebook page: "Today we were at the McShark store opening and our shark mascot received a fine from the Vienna police because of the new ban on face-coverings. Life is not easy."
The company is now reportedly reviewing its policy on using mascots.
Elsewhere in the Austrian capital, a cyclist was said to have been arrested and fined for wearing a scarf over her face, according to local media.