Denial or revocation of the license

The fact that a license to operate a temporary employment agency was issued does not necessarily mean that the license will be valid forever. Several scenarios are conceivable that can cause the license to expire (read more…). Apart from subsequent expiry of the license, a license can also be denied from the very outset, its renewal can be denied or the license can even be revoked. Please see below for cases where this is possible and what can be done in such a case.

Sec. 3 I of the German Law on Temporary Employment (AÜG, Arbeitnehmerüberlassungsgesetz)

The license to operate a temporary employment agency or its renewal may be refused if there is reason to believe that

  • the applicant lacks the required reliability, for example, due to failure to comply with the regulations and obligations under social security or labour law. These obligations include, for example, withholding and paying wage tax as well as regulations that apply to employment agencies, health and safety at work or the employment of foreigners (read more…),
  • the company is organised in such a way that the employer is not in a position to fulfil his normal duties (read more…),
  • the employer fails to grant to the temporary employee the working conditions, including remuneration, to which he is entitled under sec. 8 AÜG (read more…).

If one of these points applies, the Federal Employment Agency (Bundesagentur für Arbeit) may deny the applicant the license or revoke an existing license. In order to obtain the necessary information, the Federal Employment Agency can refer to personnel files of the employer and is not obliged to carry out any further investigations.


The Federal Employment Agency accuses the license holder of having violated his obligations to pay social security contributions. The numerous violations were found during several audits and are documented in the personnel files. The license holder argues that the audit results were incorrect and that the personnel files were unintentionally kept improperly. The Federal Employment Agency can nevertheless revoke the license without having to investigate the facts in detail.

Practical tip

One reason for refusal, which is not mentioned in the law, but often found in reality, is ‘sloppiness’ in the provision and submission of documents requested by the Federal Employment Agency. A quick and adequate response to such requests is strongly recommended in order to avoid the denial of the license.