Com­pa­nies that offer pay­rolling in Ger­many require a license to oper­ate tem­po­rary employ­ment agency.

Pay­rolling means that the ser­vice provider co-ordi­nates the con­tract and wage admin­is­tra­tion for employ­ees who may be recruit­ed and select­ed direct­ly by the cus­tomer’s HR depart­ment. The employ­ees work direct­ly at the cus­tomer. The ser­vice provider assumes all legal oblig­a­tions in con­junc­tion with wage pay­ments and deduc­tions as well as unem­ploy­ment and indus­tri­al acci­dent insur­ance for the employ­ee concerned.

Accord­ing to Ger­man law, the pay­rolling ser­vice provider is the employ­ee’s employ­er. If this employ­ee works for a cus­tomer, this is defined as tem­po­rary employ­ment under Ger­man law. A license to oper­ate tem­po­rary employ­ment agency is required for this form of assignment.