Labour Leasing in Germany: What’s labor leasing in Germany?

Get Your AÜG Structure Right From the Start

Plan­ning to sup­ply employ­ees to a Ger­man client — or unsure whether your cur­rent per­son­nel mod­el com­plies with Ger­man law? The dis­tinc­tion between labour leas­ing, out­sourc­ing and oth­er ser­vice arrange­ments can have sig­nif­i­cant legal and com­mer­cial consequences.

In Ger­many, labour leas­ing is known as Arbeit­nehmerüber­las­sung (ANÜ) and is gov­erned pri­mar­i­ly by the Tem­po­rary Employ­ment Act – Arbeit­nehmerüber­las­sungs­ge­setz (AÜG). Where the statu­to­ry require­ments apply, the per­son­nel provider gen­er­al­ly needs a licence from the Fed­er­al Employ­ment Agency (Bun­de­sagen­tur für Arbeit) before labour leas­ing begins.

AMETHYST Recht­san­wälte advis­es Ger­man and inter­na­tion­al com­pa­nies on labour leas­ing in Ger­many, AÜG licens­ing and cross-bor­der per­son­nel struc­tures. We help busi­ness­es assess their mod­els, under­stand their oblig­a­tions and address licens­ing risks before they dis­rupt operations.

How Labour Leasing Works — and Why the Legal Structure Matters

Labour leas­ing (also called staff leas­ing) involves three parties:

• The per­son­nel provider (Ver­lei­her) employs the work­er and remains respon­si­ble for the employ­er obligations.
• The employ­ee (Lei­har­beit­nehmer) works for the client while remain­ing employed by the per­son­nel provider.
• The client com­pa­ny (Entlei­her) receives the employee’s work and may exer­cise work-relat­ed instruc­tions with­in the applic­a­ble legal framework.

Unlike a con­ven­tion­al out­sourc­ing arrange­ment, staff leas­ing involves the employ­ee work­ing with­in the client’s organ­i­sa­tion and being sub­ject to its instruc­tions. The pre­cise allo­ca­tion of respon­si­bil­i­ties and the way the arrange­ment oper­ates in prac­tice are there­fore crucial.

Labour Leasing Has Been a Central Focus of Our Practice for Many Years

We advise com­pa­nies nation­wide on AÜG licens­ing, per­son­nel struc­tures and com­plex pro­ceed­ings involv­ing the Fed­er­al Employ­ment Agency. Our work com­bines legal analy­sis with prac­ti­cal expe­ri­ence in the chal­lenges labour leas­ing busi­ness­es face in Germany.

• Over 1,000 AÜG cas­es han­dled — prac­ti­cal expe­ri­ence across tem­po­rary employ­ment and licens­ing matters.
• More than 25 years of pro­fes­sion­al expe­ri­ence — long-stand­ing engage­ment with the legal chal­lenges of staff leasing.
• A team of spe­cialised prac­ti­tion­ers — com­bin­ing legal exper­tise with prac­ti­cal under­stand­ing of AÜG matters.
• Recog­ni­tion in legal rank­ings — list­ed in Best Lawyers and Germany’s Best Law Firms (Han­dels­blatt).

We help clients under­stand their legal posi­tion, eval­u­ate prac­ti­cal options and make informed deci­sions about their per­son­nel mod­els and licens­ing obligations.

Is Your Personnel Model Actually Considered To Be Labour Leasing in Germany?

The contract’s label does not decide the legal clas­si­fi­ca­tion. Call­ing an arrange­ment con­sult­ing, project work, out­sourc­ing or per­son­nel ser­vices does not auto­mat­i­cal­ly take it out­side the AÜG.

Under Sec­tion 1 AÜG, the key indi­ca­tors include whether the employ­ee is inte­grat­ed into the client’s work organ­i­sa­tion and sub­ject to the client’s instruc­tions. The actu­al work­ing rela­tion­ship must there­fore be exam­ined — not mere­ly the word­ing of the contract.

This can be par­tic­u­lar­ly rel­e­vant where:

• A com­pa­ny sup­plies spe­cial­ists to work with­in a client’s team.
• A ser­vice provider assigns per­son­nel to a customer’s premis­es or oper­a­tions.
• A group com­pa­ny deploys employ­ees to anoth­er group enti­ty.
• A for­eign employ­er sup­plies per­son­nel to a Ger­man busi­ness.
• An Employ­er of Record or pay­rolling mod­el sep­a­rates the for­mal employ­er from the busi­ness direct­ing the work.

Not every such arrange­ment con­sti­tutes labour leas­ing in Ger­many. But where the facts point towards staff leas­ing, the licens­ing and com­pli­ance require­ments need to be assessed before the assign­ment starts.

For a more detailed expla­na­tion, see our guide on Who Needs an AÜG Licence in Germany?

Labour Leasing or a Service Contract? Choose the Right Structure

The dis­tinc­tion between labour leas­ing and oth­er ser­vice arrange­ments can deter­mine which legal require­ments apply:

• Labour leas­ing (Arbeit­nehmerüber­las­sung) typ­i­cal­ly involves employ­ees work­ing with­in the client’s organ­i­sa­tion and under its instructions.
• A ser­vice con­tract (Dien­stver­trag) gen­er­al­ly con­cerns the pro­vi­sion of an agreed ser­vice, with the provider respon­si­ble for per­form­ing it properly.
• A con­tract for work (Werkver­trag) gen­er­al­ly requires the con­trac­tor to deliv­er a defined result and assume respon­si­bil­i­ty for achiev­ing it.

The dis­tinc­tion depends on the actu­al con­trac­tu­al and oper­a­tional arrange­ments. If the con­tract and its imple­men­ta­tion dif­fer, the prac­ti­cal real­i­ty may be deci­sive under the AÜG.

AMETHYST Recht­san­wälte can assess your pro­posed struc­ture and help iden­ti­fy whether it cre­ates labour leas­ing risks: Dis­tinc­tion Between Ser­vice Con­tracts and Con­tracts to Pro­duce a Work.

Does Your Business Need an AÜG Licence?

Where labour leas­ing in Ger­many falls with­in the scope of the AÜG, the per­son­nel provider gen­er­al­ly requires a licence before the activ­i­ty begins. Statu­to­ry excep­tions and spe­cial arrange­ments may apply, so the answer depends on the spe­cif­ic facts.

A licence is not a sub­sti­tute for ongo­ing com­pli­ance. Com­pa­nies must also observe the applic­a­ble rules on employ­ment con­di­tions, remu­ner­a­tion, equal treat­ment, assign­ment dura­tion and documentation.

Start­ing an assign­ment before clar­i­fy­ing the licens­ing posi­tion can expose the par­ties to sig­nif­i­cant legal risks.

Our lawyers can help deter­mine whether a licence is required, assess the rel­e­vant require­ments and guide your com­pa­ny through the appli­ca­tion process.

Appli­ca­tion for an AÜG Licence in Ger­many
Pre­con­di­tions for Grant­i­ng an AÜG Licence
Fea­tures of the AÜG Licence

Foreign Companies: Can You Supply Employees to Germany?

A com­pa­ny does not nec­es­sar­i­ly avoid Ger­man labour leas­ing rules by being estab­lished abroad. Cross-bor­der per­son­nel arrange­ments require care­ful assess­ment of the busi­ness mod­el, the employee’s role and the way work is organ­ised for the Ger­man client.

This is espe­cial­ly impor­tant for inter­na­tion­al staffing providers, IT and engi­neer­ing busi­ness­es, and cor­po­rate groups deploy­ing employ­ees across borders.

Depend­ing on the arrange­ment, your com­pa­ny may need to con­sid­er Ger­man AÜG licens­ing along­side oth­er employ­ment, immi­gra­tion, noti­fi­ca­tion and doc­u­men­ta­tion obligations.

AMETHYST Recht­san­wälte advis­es inter­na­tion­al com­pa­nies on enter­ing the Ger­man mar­ket and struc­tur­ing per­son­nel assign­ments in com­pli­ance with Ger­man law.

What If You Operate Without the Required Licence?

If an arrange­ment qual­i­fies as staff leas­ing and the required licence is miss­ing, the par­ties can­not assume that the sit­u­a­tion can sim­ply be cor­rect­ed after work has started.

Unlaw­ful labour leas­ing can trig­ger statu­to­ry con­se­quences, includ­ing admin­is­tra­tive fines and poten­tial effects on the employ­ment and con­trac­tu­al rela­tion­ships involved. The spe­cif­ic con­se­quences depend on the circumstances.

The safest approach is to clar­i­fy the legal clas­si­fi­ca­tion and licens­ing posi­tion before the first assign­ment. If you are already oper­at­ing and have con­cerns about your arrange­ments, ear­ly legal advice can help you assess the expo­sure and iden­ti­fy appro­pri­ate next steps. 

Read more on Assign­ment of Tem­po­rary Employ­ees With­out a License.

Compliance Does Not End When the Licence Is Granted

An AÜG licence is only the start­ing point. Per­son­nel providers must con­tin­ue to com­ply with the rel­e­vant statu­to­ry require­ments and main­tain process­es that sup­port law­ful labour leasing.

Key issues may include:

• Equal treat­ment, remu­ner­a­tion and applic­a­ble col­lec­tive agreements 
• Pay­roll, social-secu­ri­ty con­tri­bu­tions and employ­er obligations
• Com­pli­ance with assign­ment limits
• Employ­ment and labour leas­ing con­tracts
• Required employ­ee infor­ma­tion and documentation
• Prepa­ra­tion for inspec­tions by the Fed­er­al Employ­ment Agency 

AMETHYST Recht­san­wälte helps com­pa­nies assess these oblig­a­tions, review their con­trac­tu­al and oper­a­tional arrange­ments, and pre­pare for reg­u­la­to­ry scruti­ny.

Get Clarity Before Your Next Employee Assignment

Whether you are estab­lish­ing a staffing busi­ness, sup­ply­ing per­son­nel from abroad or review­ing an exist­ing out­sourc­ing mod­el, the right legal assess­ment can help you avoid pre­ventable licens­ing and com­pli­ance problems.

Con­tact AMETHYST Recht­san­wälte to dis­cuss your staff leas­ing mod­el, AÜG licence require­ments or cross-bor­der per­son­nel arrangements.

Labour Leasing in Germany: Everything Companies Need to Know — At a Glance

Labor leas­ing in Ger­many (often abbre­vi­at­ed ANÜ or AÜG) is defined as a sit­u­a­tion where employ­ees are hired out by an employ­er (staff leas­ing agency or sup­pli­er) to a third par­ty (client) for a lim­it­ed peri­od of time against pay­ment. The staff leas­ing agency remains the employee’s employer.

Labor leas­ing is often referred to in Ger­man as ‘Zeitar­beit’, ‘Lei­har­beit’ or ‘Per­son­al­leas­ing’ (tem­po­rary work, sub­con­tract­ed labour or per­son­nel leasing).

This cre­ates a tri­an­gle sit­u­a­tion that is not typ­i­cal under Ger­man labour law:
Whilst the tem­po­rary employ­ee works for the client and receives his instruc­tions (as if he were the hir­er’s employ­ee), no con­trac­tu­al rela­tion­ship exists between the hir­er and the tem­po­rary employ­ee. The tem­po­rary employ­ee remains an employ­ee of the tem­po­rary employ­ment agency which pays his salary, con­tin­ued remu­ner­a­tion, etc. The tem­po­rary employ­ment agency, in turn, invoic­es the hir­er for the tem­po­rary employee’s work.

Ger­man law uses the term ‘Arbeit­nehmerüber­las­sung’ for this process. It may hap­pen that com­pa­nies them­selves do not con­sid­er their activ­i­ties as tem­po­rary employ­ment because they believe that the tem­po­rary employee’s work mere­ly con­sti­tutes a ‘project assign­ment’ or ‘pay­rolling’ sit­u­a­tion, for example.

How­ev­er, this dis­tinc­tion does not exist in Ger­man law. When­ev­er an employ­ee receives his salary from one com­pa­ny and simul­ta­ne­ous­ly works for anoth­er com­pa­ny (cus­tomer) and is sub­ject to the cus­tomer’s right of instruc­tion, this can con­sti­tute labour leas­ing under Ger­man law.

Pur­suant to sec. 1 of the Law on Tem­po­rary Employ­ment (AÜG, Arbeit­nehmerüber­las­sungs­ge­setz), an AÜG license issued by the Fed­er­al Employ­ment Agency (Bun­de­sagen­tur für Arbeit) is a pre­con­di­tion for oper­at­ing a tem­po­rary employ­ment agency.

We will be pleased to support you in your legal assessment.

Should you need an AÜG-license for your project, we will be pleased to assist you. Click here to learn more.