Denial or revocation of the license to operate a temporary employment agency

An AÜG licence is essen­tial for many com­pa­nies sup­ply­ing employ­ees to oth­er busi­ness­es in Ger­many. If the Fed­er­al Employ­ment Agency refus­es your appli­ca­tion, declines to renew your licence or moves to with­draw or revoke it, the con­se­quences can extend far beyond an admin­is­tra­tive decision.

Your abil­i­ty to con­tin­ue staff leas­ing may be affect­ed, along with your client rela­tion­ships and ongo­ing assign­ments. The right response starts with under­stand­ing the authority’s con­cerns, assess­ing the legal grounds and build­ing a cred­i­ble strategy.

AMETHYST Recht­san­wälte advis­es and rep­re­sents Ger­man and inter­na­tion­al com­pa­nies in AÜG licens­ing dis­putes — from chal­leng­ing a threat­ened refusal to respond­ing to a with­draw­al or revocation.

What Puts Your AÜG Licence at Risk?

Under Sec­tion 3 of the Ger­man Tem­po­rary Employ­ment Act (Arbeit­nehmerüber­las­sungs­ge­setz – AÜG), an appli­ca­tion or renew­al must be refused if the statu­to­ry grounds for refusal are met. The assess­ment focus­es on whether the com­pa­ny can oper­ate staff leas­ing law­ful­ly and ful­fil its oblig­a­tions as an employer.

The main risk areas include:

• Reli­a­bil­i­ty con­cerns: Breach­es involv­ing employ­ment law, social-secu­ri­ty con­tri­bu­tions, wage tax, occu­pa­tion­al safe­ty or rules on for­eign workers.
• Weak inter­nal organ­i­sa­tion: Inad­e­quate HR, pay­roll or admin­is­tra­tive process­es that pre­vent the com­pa­ny from meet­ing its employ­er obligations.
• Pay and equal treat­ment vio­la­tions: Fail­ure to pro­vide employ­ees with the work­ing con­di­tions and remu­ner­a­tion required by law.
• Assign­ment and con­tract prob­lems: Breach­es of the max­i­mum assign­ment peri­od, defi­cient doc­u­men­ta­tion or dis­crep­an­cies between con­trac­tu­al arrange­ments and actu­al practice.

A licence issue may arise from one seri­ous prob­lem or a wider pat­tern of non-com­pli­ance. The rel­e­vant facts and statu­to­ry require­ments must be assessed individually.

For a broad­er overview, see our page on the AÜG Licence Audit Pro­ce­dure.

A Renewal Is Not Guaranteed — Prepare Before the Deadline

Hold­ing an AÜG licence in the past does not guar­an­tee renew­al. When review­ing a renew­al appli­ca­tion, the author­i­ty can assess whether the legal require­ments con­tin­ue to be met.

Com­pa­nies with unre­solved pay­roll, con­trac­tu­al or com­pli­ance issues should address them before sub­mit­ting a renew­al appli­ca­tion. A struc­tured review can help iden­ti­fy weak­ness­es, doc­u­ment cor­rec­tive action and reduce avoid­able uncertainty.

Our lawyers can assess your com­pli­ance posi­tion and help you pre­pare for the renew­al process.

Learn more about the AÜG Licence Appli­ca­tion Process and the Pre­con­di­tions for Grant­i­ng an AÜG Licence.

Why Companies Trust AMETHYST Rechtsanwälte

When your AÜG licence is at risk, you need more than gen­er­al legal advice. You need a clear assess­ment of your sit­u­a­tion, a prac­ti­cal strat­e­gy and legal sup­port that under­stands the demands of staff leasing.

AMETHYST Recht­san­wälte com­bines spe­cial­ist AÜG knowl­edge with a busi­ness-focused approach. We help com­pa­nies under­stand the authority’s con­cerns, assess their legal options and devel­op a response tai­lored to their circumstances.

• Over 1,000 AÜG cas­es han­dled — sub­stan­tial prac­ti­cal expe­ri­ence in tem­po­rary employ­ment and licens­ing matters.
• More than 25 years of pro­fes­sion­al expe­ri­ence — a long-stand­ing focus on the legal chal­lenges fac­ing labour leas­ing businesses.
• A team of spe­cialised prac­ti­tion­ers — com­bin­ing in-depth legal knowl­edge with prac­ti­cal experience.
• Recog­nised by lead­ing legal rank­ings — list­ed in Best Lawyers and Germany’s Best Law Firms (Han­dels­blatt).

We under­stand the legal require­ments — and the busi­ness con­se­quences when a licence is at risk. Our pri­or­i­ty is to help you make informed deci­sions, address com­pli­ance con­cerns and pro­tect your busi­ness inter­ests with a sound legal strategy.

AÜG Licence Denied, Withdrawn or Revoced? The Legal Difference Matters

These terms describe dif­fer­ent legal sit­u­a­tions. Iden­ti­fy­ing which one applies is essen­tial to deter­min­ing the appro­pri­ate response.

Denial of an initial application

The author­i­ty refus­es to grant a licence because the statu­to­ry require­ments are not met.

Refusal to renew

An exist­ing fixed-term licence is not renewed. Once it expires, the com­pa­ny can­not rely on that licence to con­tin­ue labour leasing.

Withdrawal of an unlawfully granted licence

Under Sec­tion 4 AÜG, the author­i­ty may with­draw a licence that was unlaw­ful when grant­ed, sub­ject to the statu­to­ry conditions.

Revocation of an existing licence

Under Sec­tion 5 AÜG, the author­i­ty may revoke a licence in spec­i­fied cir­cum­stances — for exam­ple, where rel­e­vant grounds for refusal arise lat­er or a con­di­tion attached to the licence is not fulfilled.

The legal basis, applic­a­ble dead­lines and avail­able options depend on the spe­cif­ic deci­sion and cir­cum­stances. A care­ful legal assess­ment is there­fore impor­tant before respond­ing to the authority.

Show the Authority Why the Problem Can Be Resolved

Past vio­la­tions can weigh heav­i­ly in a licens­ing deci­sion, but the com­pa­ny’s cur­rent sit­u­a­tion and cor­rec­tive mea­sures may also mat­ter when future com­pli­ance is assessed.

Depend­ing on the cir­cum­stances, a con­vinc­ing response may need to demon­strate that the under­ly­ing caus­es have been addressed. Rel­e­vant steps could include:

• Cor­rect­ing employ­ment or staff leas­ing contracts
• Improv­ing pay­roll and HR procedures
• Review­ing wage clas­si­fi­ca­tions and equal-treat­ment practices
• Assign­ing clear respon­si­bil­i­ty for compliance
• Intro­duc­ing reli­able doc­u­men­ta­tion and inter­nal controls
• Train­ing staff and doc­u­ment­ing cor­rec­tive measures

Sim­ply promis­ing to improve is rarely as per­sua­sive as show­ing what has changed and how the improve­ments will be main­tained. Our lawyers can help assess which evi­dence is rel­e­vant and present the com­pa­ny’s posi­tion clear­ly and consistently.

If Your Licence Is Lost, Every Next Step Counts

If an AÜG licence expires with­out renew­al or is with­drawn or revoked, the com­pa­ny must assess what this means for its ongo­ing labour leas­ing activ­i­ties and exist­ing con­trac­tu­al rela­tion­ships.

The AÜG con­tains spe­cif­ic rules con­cern­ing the con­se­quences of the licence end­ing and the han­dling of con­tracts con­clud­ed while the licence was in force. The prac­ti­cal and legal impli­ca­tions depend on the cir­cum­stances and the applic­a­ble statu­to­ry provisions.

Do not assume that exist­ing assign­ments can sim­ply con­tin­ue unchanged! Obtain advice prompt­ly to under­stand your oblig­a­tions, assess the options avail­able and man­age the impact on clients and employees.

Challenge the Decision With a Clear Legal Strategy

AMETHYST Recht­san­wälte can assist with:

• Review­ing notices, objec­tions and con­cerns raised by the Fed­er­al Employ­ment Agency
• Assess­ing the legal basis for a refusal, with­draw­al or revocation
• Prepar­ing respons­es to hear­ings and requests for information
• Review­ing employ­ment con­tracts, leas­ing agree­ments and com­pli­ance records
• Iden­ti­fy­ing cor­rec­tive mea­sures and sup­port­ing evidence
• Com­mu­ni­cat­ing with the authority
• Rep­re­sent­ing your com­pa­ny in admin­is­tra­tive or court pro­ceed­ings where appropriate

Our approach com­bines legal analy­sis with prac­ti­cal steps to help pro­tect your busi­ness and address the issues affect­ing your licence.

Your AÜG Licence Is Too Important to Leave to Chance

Whether the author­i­ty has raised ini­tial con­cerns, refused a renew­al or already issued a for­mal deci­sion, act­ing prompt­ly can help you under­stand your posi­tion and avoid pre­ventable mistakes.

Con­tact AMETHYST Recht­san­wälte to dis­cuss your case and iden­ti­fy the next steps for your AÜG licence.

Deep Dive: Possible Reasons, Why Your AÜG Licence Was Denied

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 on Pos­si­ble Rea­sons For Denial of a Licence). Apart from sub­se­quent expiry of the license, an AÜG licence 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 on Fail­ure to Com­ply with Reg­u­la­tions),
• the com­pa­ny is organ­ised in such a way that the employ­er is not in a posi­tion to ful­fil his nor­mal duties (read more on Insuf­fi­cient Com­pa­ny Organ­i­sa­tion),
• 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 on Fail­ure to Pro­vide the Cor­rect Work­ing Con­di­tions).

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.

Example

The Fed­er­al Employ­ment Agency accus­es the license hold­er of hav­ing vio­lat­ed his oblig­a­tions to pay social secu­ri­ty con­tri­bu­tions. 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.