Labor Leasing and Temporary Employment

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Who needs a labor leasing permit?

Labor leasing - also known as staff leasing or employee leasing - is carried out by an employer (lender), who, in a triangular relationship, temporarily assigns their own employee to a third party (hirer or user company) to work for the third party. The hiring out of employees must be provided for in the employment contract between the hirer and the employee. Secondly, the lender and hirer must conclude a temporary employment contract. As a rule, the assignment requires a permit.

How do you get a labor leasing permit?

The labor leasing permit is a permit issued to the temporary employment agency upon application. The employment agency at the registered office of the hirer is responsible.

Who receives a labor leasing permit?

Anyone acting as a natural person or legal entity can obtain a labor leasing permit. This means: sole traders, partnerships (GbR, OHG etc.) or corporations (GmbH, UG, associations etc.). Foreign entities within the European Union can obtain that permit also.

What other obligations does the lender have?

The lender must remunerate its employees, including for the period in which they are deployed in the hirer's company. The principle here is that temporary workers are entitled to the same pay and working conditions as comparable permanent employees of the hirer for the duration of the assignment ("Equal Pay/Equal Treatment"). However, e.g. a lower salary can be agreed by collective agreement if certain other prerequisites are met. The Federal Labor Court (BAG, judgment of 31.05.2023 - 5 AZR 143/19) recently clarified that such "downward collective agreements" are permissible.

What is the difference to using subcontractors?

The use of subcontractors in the third party's business, for example via a contract for work or a service contract, must be distinguished from the supply of temporary workers. A characteristic feature of labor leasing is that the employees are integrated into the hirer's business in such a way that they work hand in hand with the hirer's permanent labor and receive instructions from the hirer. The use of subcontractors, on the other hand, is characterized by the fact that the "hirer" issues the work instructions, provides the work materials and a project-related remuneration has been agreed. If there is a de facto hiring out of employees, the obligation to obtain a permit cannot be circumvented by a different contractual arrangement.

What is a concealed labor leasing?

The terms "concealed labor leasing" are “labor leasing in disguise” are used when employees are hired out without the required permit. The de facto labor leasing relationship is then often concealed by fictitious work contracts or other agreements.

Who controls violations?

As part of company audits, the responsible employment agency checks whether the provisions of the German Labor Leasing Act are being complied with and whether temporary employment is being carried out properly. The Federal Employment Agency works together with the customs authorities to prosecute and punish administrative offenses.

DREYENBERG advises on labor leasing and temporary employment

We are your lawyer for labor leasing and advise and represent you - including foreign companies - in all matters relating to labor leasing and temporary employment.

We are experienced in the application process. This applies to first-time applications and renewals.

We also assist companies in the ongoing enforcement of the Labor Leasing Act - here in every area: disputes with the public authorities (examination procedures, hearing procedures and objection procedures).

We can also help you to maintain an existing permit. We can also defend you in the event of impending revocation.

We also have particular expertise in legal disputes (lawsuits and summary proceedings).

This also applies to the civil law relationship between hirer and lender or the employment law relationship between lender and temporary worker. We also advise in advance in order to avoid disputes.

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Rechtsanwälte Steuerberater PartG mbB,
Städelstraße 10, 60596 Frankfurt am Main