Staff leasing makes flexible deployment of people possible. Anyone using it should know in advance which parties have to be involved – there are more than the obvious three.
The central triangle
At the center are three actors: the temporary worker, the client company (the hirer) and the staffing company (the agency). Between agency and hirer there is a leasing agreement (AÜV) setting out the framework and the hourly rates. The authority to instruct lies with the hirer, who at the same time has to make normal operational working conditions available (the equal treatment principle). But the temporary worker stays employed and paid by the staffing provider. Internally, HR, procurement and management are often involved and have to agree their roles clearly.
Federal Employment Agency
Staff leasing requires a license from the responsible employment agency – limited to one year at first, and possible as an open-ended license after three years. The conditions are a properly run business, professional expertise, appropriate working conditions and sufficient financial means. Client companies should only work with licensed firms: if the license is missing, this is disguised – and unlawful – staff leasing.
The bargaining parties
Two industry-wide agreements apply to the sector, between the DGB unions and the employers' associations BAP and iGZ, which merged in 2023 into the German Staffing Association (GVP). Collective agreements can depart from statutory requirements and affect the maximum assignment period, equal treatment and equal pay. Industry supplement agreements additionally secure supplements that rise step by step through a nine-level pay system.
Works council
The hirer's works council has to be involved before the leasing begins; the agency presents its license for that. The works council can refuse the assignment – for example where there are breaches of law or collective agreement, threatened disadvantages for permanent staff, or a risk to industrial peace. The veto has to be submitted in writing with reasons within one week; otherwise consent is deemed given.
Further statutory duties
The legal basis is the AÜG, which implements the EU Temporary Agency Work Directive 2008/104/EC and sets out equal treatment, equal pay and the maximum assignment period. Depending on the situation, the German Supply Chain Act (LkSG) applies to large client companies, as do the PPE requirements on occupational health and safety, where responsibility has to be settled contractually.
Frequently asked questions
Which parties are involved in staff leasing?
The core triangle of temporary worker, agency and hirer – plus the Federal Employment Agency, the bargaining parties and the hirer's works council.
Who grants the leasing license?
The responsible employment agency; limited to one year at first, and possible as an open-ended license after three years.
Does the works council have to agree?
Yes, it has to be involved before the assignment and can object in writing within one week on certain grounds.
Which act governs staff leasing?
The German Temporary Employment Act (AÜG), which implements EU Directive 2008/104/EC.
- German Temporary Employment Act (AÜG): gesetze-im-internet.de
- Does the German Supply Chain Act apply to staff leasing?