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

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.