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Labour Leasing in Germany: What’s labor leasing in Germany?
Get Your AÜG Structure Right From the Start
Planning to supply employees to a German client — or unsure whether your current personnel model complies with German law? The distinction between labour leasing, outsourcing and other service arrangements can have significant legal and commercial consequences.
In Germany, labour leasing is known as Arbeitnehmerüberlassung (ANÜ) and is governed primarily by the Temporary Employment Act – Arbeitnehmerüberlassungsgesetz (AÜG). Where the statutory requirements apply, the personnel provider generally needs a licence from the Federal Employment Agency (Bundesagentur für Arbeit) before labour leasing begins.
AMETHYST Rechtsanwälte advises German and international companies on labour leasing in Germany, AÜG licensing and cross-border personnel structures. We help businesses assess their models, understand their obligations and address licensing risks before they disrupt operations.
How Labour Leasing Works — and Why the Legal Structure Matters
Labour leasing (also called staff leasing) involves three parties:
- The personnel provider (Verleiher) employs the worker and remains responsible for the employer obligations.
- The employee (Leiharbeitnehmer) works for the client while remaining employed by the personnel provider.
- The client company (Entleiher) receives the employee’s work and may exercise work-related instructions within the applicable legal framework.
Unlike a conventional outsourcing arrangement, staff leasing involves the employee working within the client’s organisation and being subject to its instructions. The precise allocation of responsibilities and the way the arrangement operates in practice are therefore crucial.
Labour Leasing Has Been a Central Focus of Our Practice for Many Years
We advise companies nationwide on AÜG licensing, personnel structures and complex proceedings involving the Federal Employment Agency. Our work combines legal analysis with practical experience in the challenges labour leasing businesses face in Germany.
- Over 1,000 AÜG cases handled — practical experience across temporary employment and licensing matters.
- More than 25 years of professional experience — long-standing engagement with the legal challenges of staff leasing.
- A team of specialised practitioners — combining legal expertise with practical understanding of AÜG matters.
- Recognition in legal rankings — listed in Best Lawyers and Germany’s Best Law Firms (Handelsblatt).
We help clients understand their legal position, evaluate practical options and make informed decisions about their personnel models and licensing obligations.
Is Your Personnel Model Actually Considered To Be Labour Leasing in Germany?
The contract’s label does not decide the legal classification. Calling an arrangement consulting, project work, outsourcing or personnel services does not automatically take it outside the AÜG.
Under Section 1 AÜG, the key indicators include whether the employee is integrated into the client’s work organisation and subject to the client’s instructions. The actual working relationship must therefore be examined — not merely the wording of the contract.
This can be particularly relevant where:
- A company supplies specialists to work within a client’s team.
- A service provider assigns personnel to a customer’s premises or operations.
- A group company deploys employees to another group entity.
- A foreign employer supplies personnel to a German business.
- An Employer of Record or payrolling model separates the formal employer from the business directing the work.
Not every such arrangement constitutes labour leasing in Germany. But where the facts point towards staff leasing, the licensing and compliance requirements need to be assessed before the assignment starts.
For a more detailed explanation, see our guide on Who Needs an AÜG Licence in Germany?
Labour Leasing or a Service Contract? Choose the Right Structure
The distinction between labour leasing and other service arrangements can determine which legal requirements apply:
- Labour leasing (Arbeitnehmerüberlassung) typically involves employees working within the client’s organisation and under its instructions.
- A service contract (Dienstvertrag) generally concerns the provision of an agreed service, with the provider responsible for performing it properly.
- A contract for work (Werkvertrag) generally requires the contractor to deliver a defined result and assume responsibility for achieving it.
The distinction depends on the actual contractual and operational arrangements. If the contract and its implementation differ, the practical reality may be decisive under the AÜG.
AMETHYST Rechtsanwälte can assess your proposed structure and help identify whether it creates labour leasing risks: Distinction Between Service Contracts and Contracts to Produce a Work.
Does Your Business Need an AÜG Licence?
Where labour leasing in Germany falls within the scope of the AÜG, the personnel provider generally requires a licence before the activity begins. Statutory exceptions and special arrangements may apply, so the answer depends on the specific facts.
A licence is not a substitute for ongoing compliance. Companies must also observe the applicable rules on employment conditions, remuneration, equal treatment, assignment duration and documentation.
Starting an assignment before clarifying the licensing position can expose the parties to significant legal risks.
Our lawyers can help determine whether a licence is required, assess the relevant requirements and guide your company through the application process.
Application for an AÜG Licence in Germany
Preconditions for Granting an AÜG Licence
Features of the AÜG Licence
Foreign Companies: Can You Supply Employees to Germany?
A company does not necessarily avoid German labour leasing rules by being established abroad. Cross-border personnel arrangements require careful assessment of the business model, the employee’s role and the way work is organised for the German client.
This is especially important for international staffing providers, IT and engineering businesses, and corporate groups deploying employees across borders.
Depending on the arrangement, your company may need to consider German AÜG licensing alongside other employment, immigration, notification and documentation obligations.
AMETHYST Rechtsanwälte advises international companies on entering the German market and structuring personnel assignments in compliance with German law.
What If You Operate Without the Required Licence?
If an arrangement qualifies as staff leasing and the required licence is missing, the parties cannot assume that the situation can simply be corrected after work has started.
Unlawful labour leasing can trigger statutory consequences, including administrative fines and potential effects on the employment and contractual relationships involved. The specific consequences depend on the circumstances.
The safest approach is to clarify the legal classification and licensing position before the first assignment. If you are already operating and have concerns about your arrangements, early legal advice can help you assess the exposure and identify appropriate next steps.
Read more on Assignment of Temporary Employees Without a License.
Compliance Does Not End When the Licence Is Granted
An AÜG licence is only the starting point. Personnel providers must continue to comply with the relevant statutory requirements and maintain processes that support lawful labour leasing.
Key issues may include:
- Equal treatment, remuneration and applicable collective agreements
- Payroll, social-security contributions and employer obligations
- Compliance with assignment limits
- Employment and labour leasing contracts
- Required employee information and documentation
- Preparation for inspections by the Federal Employment Agency
AMETHYST Rechtsanwälte helps companies assess these obligations, review their contractual and operational arrangements, and prepare for regulatory scrutiny.
Get Clarity Before Your Next Employee Assignment
Whether you are establishing a staffing business, supplying personnel from abroad or reviewing an existing outsourcing model, the right legal assessment can help you avoid preventable licensing and compliance problems.
Contact AMETHYST Rechtsanwälte to discuss your staff leasing model, AÜG licence requirements or cross-border personnel arrangements.
Labour Leasing in Germany: Everything Companies Need to Know — At a Glance
Labor leasing in Germany (often abbreviated ANÜ or AÜG) is defined as a situation where employees are hired out by an employer (staff leasing agency or supplier) to a third party (client) for a limited period of time against payment. The staff leasing agency remains the employee’s employer.
Labor leasing is often referred to in German as ‘Zeitarbeit’, ‘Leiharbeit’ or ‘Personalleasing’ (temporary work, subcontracted labour or personnel leasing).
This creates a triangle situation that is not typical under German labour law:
Whilst the temporary employee works for the client and receives his instructions (as if he were the hirer’s employee), no contractual relationship exists between the hirer and the temporary employee. The temporary employee remains an employee of the temporary employment agency which pays his salary, continued remuneration, etc. The temporary employment agency, in turn, invoices the hirer for the temporary employee’s work.
German law uses the term ‘Arbeitnehmerüberlassung’ for this process. It may happen that companies themselves do not consider their activities as temporary employment because they believe that the temporary employee’s work merely constitutes a ‘project assignment’ or ‘payrolling’ situation, for example.
However, this distinction does not exist in German law. Whenever an employee receives his salary from one company and simultaneously works for another company (customer) and is subject to the customer’s right of instruction, this can constitute labour leasing under German law.
Pursuant to sec. 1 of the Law on Temporary Employment (AÜG, Arbeitnehmerüberlassungsgesetz), an AÜG license issued by the Federal Employment Agency (Bundesagentur für Arbeit) is a precondition for operating a temporary employment agency.
We will be pleased to support you in your legal assessment.
Should you need an AÜG-license for your project, we will be pleased to assist you. Click here to learn more.



