Does Your Business Need an AÜG Licence in Germany?

If your com­pa­ny sup­plies employ­ees to anoth­er busi­ness in Ger­many, get­ting the legal clas­si­fi­ca­tion right is essen­tial. Under the Ger­man Tem­po­rary Employ­ment Act (Arbeit­nehmerüber­las­sungs­ge­setz – AÜG), staff leas­ing gen­er­al­ly requires an AÜG licence from the Fed­er­al Employ­ment Agency (Bun­de­sagen­tur für Arbeit) before the assign­ment begins.

The rules apply to Ger­man and for­eign busi­ness­es alike. And the name of your con­tract — whether out­sourc­ing, con­sult­ing, pay­rolling or project work — is not deci­sive. What mat­ters is how the arrange­ment oper­ates in prac­tice.

AMETHYST Recht­san­wälte helps com­pa­nies assess their per­son­nel struc­tures, clar­i­fy licens­ing require­ments and avoid pre­ventable AÜG risks.

The Key Question: Who Directs the Employee’s Work?

Staff leas­ing (also called labour leas­ing) typ­i­cal­ly involves three par­ties: a per­son­nel provider that employs the work­er, the employ­ee, and a client com­pa­ny that receives the work.

Under Sec­tion 1 AÜG, labour leas­ing gen­er­al­ly exists where employ­ees are inte­grat­ed into the client’s work organ­i­sa­tion and sub­ject to its instruc­tions. A short assign­ment is not auto­mat­i­cal­ly exempt.

This dis­tinc­tion mat­ters in con­ven­tion­al staffing arrange­ments and in less obvi­ous mod­els, including:

• Pay­rolling and Employ­er of Record (EOR) arrangements
• Per­son­nel out­sourc­ing and project-based assignments
• Cross-bor­der staffing
• Trans­fers between com­pa­nies with­in the same group

A con­tract labelled a ser­vice agree­ment does not pre­vent the AÜG from apply­ing if the actu­al work­ing rela­tion­ship amounts to staff leasing.

See our guide to Staff Leas­ing in Ger­many and the Dis­tinc­tion Between Ser­vice Con­tracts and Con­tracts to Pro­duce a Work.

Foreign Companies: German Licensing Rules May Still Apply

Being estab­lished out­side Ger­many does not auto­mat­i­cal­ly exempt a com­pa­ny from Ger­man AÜG require­ments. Inter­na­tion­al staffing providers, com­pa­nies deploy­ing employ­ees to Ger­man cus­tomers and cor­po­rate groups assign­ing per­son­nel across bor­ders should assess their arrange­ments before work begins.

The applic­a­ble require­ments depend on the busi­ness struc­ture and the cir­cum­stances of the assign­ment. An exist­ing licence in anoth­er coun­try does not, by itself, set­tle whether Ger­man autho­ri­sa­tion is required.

AMETHYST Recht­san­wälte advis­es inter­na­tion­al busi­ness­es on Ger­man AÜG licens­ing and cross-bor­der per­son­nel arrange­ments.

Why Companies Trust Us — Expertise in AÜG Licensing Procedures

Labour leas­ing has been a cen­tral focus of our prac­tice for many years. AMETHYST Recht­san­wälte advis­es com­pa­nies nation­wide on AÜG licens­ing, per­son­nel struc­tures and pro­ceed­ings involv­ing the Fed­er­al Employ­ment Agency.

Our expe­ri­ence includes over 1,000 AÜG cas­es and more than 25 years of pro­fes­sion­al expe­ri­ence. Our team com­bines spe­cial­ist legal knowl­edge with prac­ti­cal expe­ri­ence in the chal­lenges fac­ing labour leas­ing businesses.

Do Any Exceptions Apply?

Ger­man law pro­vides spe­cif­ic excep­tions to the ordi­nary licens­ing require­ment. How­ev­er, they depend on statu­to­ry con­di­tions — not sim­ply on whether an assign­ment is described as tem­po­rary, occa­sion­al or intra-group.

Exam­ples include cer­tain qual­i­fy­ing intra-group assign­ments and occa­sion­al trans­fers between employ­ers where the employ­ee was not hired for the pur­pose of being assigned.

A sep­a­rate noti­fi­ca­tion pro­ce­dure under Sec­tion 1a AÜG may apply to employ­ers with few­er than 50 employ­ees who tem­porar­i­ly assign exist­ing staff to pre­vent redun­dan­cies or short-time work. The assign­ment must meet the statu­to­ry con­di­tions, includ­ing a max­i­mum peri­od of 12 months and noti­fi­ca­tion before it begins.

No licence required does not always mean no for­mal­i­ties required. The pre­cise excep­tion and its con­di­tions should be ver­i­fied before rely­ing on it.

Read more on Who Needs an AÜG License in Ger­many and Labour Leas­ing With­out an AÜG Licence.

What Are the Risks of Getting It Wrong?

If a licence is required but miss­ing, the con­se­quences can include admin­is­tra­tive fines and legal com­pli­ca­tions affect­ing the par­ties and their employ­ment rela­tion­ships. A ser­vice or work con­tract may also come under scruti­ny if the actu­al arrange­ment resem­bles staff leasing.

The safest approach is to assess the struc­ture before the first assign­ment — not after an inspec­tion or a chal­lenge from the Fed­er­al Employ­ment Agency.

From Legal Assessment to Licensing: How AMETHYST Can Help

We can sup­port your com­pa­ny with:

• Clas­si­fi­ca­tion of per­son­nel mod­els: Assess­ing whether an arrange­ment qual­i­fies as staff leas­ing or may fall with­in a statu­to­ry exception.
• AÜG licence appli­ca­tions: Review­ing require­ments, prepar­ing doc­u­men­ta­tion and sup­port­ing com­mu­ni­ca­tion with the authority.
• Cross-bor­der struc­tures: Advis­ing for­eign com­pa­nies and inter­na­tion­al groups on Ger­man licens­ing requirements.
• Con­tracts and com­pli­ance: Review­ing employ­ment agree­ments, labour leas­ing con­tracts and oper­a­tional arrangements.
• Audits and dis­putes: Prepar­ing for inspec­tions and rep­re­sent­ing com­pa­nies in licens­ing pro­ceed­ings where necessary.

If a licence is required, our lawyers can guide you through the AÜG Licence Appli­ca­tion Process and the Pre­con­di­tions for Grant­i­ng an AÜG Licence.

Get Clarity Before the Assignment Begins

Whether you oper­ate a staffing busi­ness, use an EOR mod­el or plan to deploy employ­ees to a Ger­man client, an ear­ly legal assess­ment can help you iden­ti­fy licens­ing oblig­a­tions and reduce avoid­able risks.

Con­tact AMETHYST Recht­san­wälte to assess your per­son­nel struc­ture and deter­mine the right next steps.

In Detail: The Requirement for an AÜG License Under the AÜG

All domes­tic or for­eign com­pa­nies require an AÜG license in Ger­many as soon as they per­form an activ­i­ty as con­tem­plat­ed in sec. 1 (1) sen­tences 1, 2 of the Law on Tem­po­rary Employ­ment (AÜG, Arbeit­nehmerüber­las­sungs­ge­setz).

Sec. 1 (1) sen­tences 1, 2 AÜG
Employ­ers intend­ing to hire out employ­ees (tem­po­rary work­ers) to third par­ties (hir­ers) for work with­in the frame­work of their eco­nom­ic activ­i­ty (tem­po­rary employ­ment) require a license. Employ­ees are assigned to per­form work if they are inte­grat­ed into the hir­er’s work organ­i­sa­tion and bound by the hir­er’s instructions.

Ger­man law cov­ers not only the tra­di­tion­al hir­ing out of employ­ees as tem­po­rary employ­ees, but also all oth­er con­stel­la­tions in which an employ­ee is employed by one com­pa­ny and receives a salary, but works at anoth­er com­pa­ny and is bound by the latter’s instruc­tions. Even in the case of a short-term assign­ment, or if the com­pa­ny which pays the employee’s salary mere­ly per­forms the pay­roll account­ing func­tion (so-called ‘pay­rolling’) for any oth­er rea­son, Ger­man law treats this con­stel­la­tion as tem­po­rary employ­ment for which a license issued by the Fed­er­al Employ­ment Agency (Bun­de­sagen­tur für Arbeit) is required.