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Requirements and risks of assigning employees to a German company

Apr 29, 16 • Employment LawNo Comments

The assignment of temporary workers to a German company is illicit if the supplier is not licensed by the German Federal Employment Agency.

Illegal supply of temporary workers

In this case both the employment contract and the temporary assignment contract with the user are ineffective. In addition to this legal consequence, supplying temporary agency workers without a license constitutes an administrative offence. The fine amounts up to 30.000 Euros. This license can only be granted to suppliers established in a Member State of the EU or in the European Economic Area (EEA). The employment contract has to mention the responsible authority as well as the date of granting the license. Besides, the supplier is obligated to provide the employee with a leaflet about the main content of the Act on the Provision of Temporary Workers (AÜG), issued by the German Federal Employment Agency.

Equal Pay & Equal Treatment: principles of assigning employees to Germany

In Germany, the basic principles of Equal Pay & Equal Treatment apply. That means that the supplier must ensure that a temporary worker gets paid the same salary as a comparable employee of the same company. The workers can rely on that right even if they agree on a lower pay. Thus this principle cannot be circumvented. An exception is made if a collective agreement will be applicable to the employment contract. In this case a different payment is permitted. In practice this exception is even the rule. The employment contract has to refer to the relevant regulations in the collective agreement.

Foreign temporary workers without permit

A foreign temporary worker must not be supplied to a German company if he is not permitted to perform work in Germany. This provision is designed to prevent exploitation of foreign employees. If for instance the supplier acts in breach of the principles of Equal Pay & Equal Treatment, the employees that do not hold a valid work permission would not inform the authorities for fear of consequences. Therefore, an infringement of this provision may be punished with imprisonment up to three years or a fine. For this reason, persons involved need to pay attention that the temporary workers hold the required permission before being supplied to a German firm.

Our specialist lawyers for labor and employment law can help you with any legal issue about assigning employees to German companies as well as designing the temporary employment contracts. Please do not hesitate to give us a call and we will be happy to assist.

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Ellen Pusch

Ellen Pusch specializes in employment law and inheritance law at our Munich office. She drafts and optimizes employment agreements as well as specific types of termination agreements and assists with restructuring projects and M&A transactions (transfers of undertakings).

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