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Arbeitnehmerüberlassung (staff leasing): definition and classification

The Staff Leasing is the legal basis of classic staff leasing. This entry explains the triangular relationship, the duties of the parties and how it differs from a Werkvertrag.

Key facts
  • Governed by the German Temporary Employment Act (AÜG).
  • The agency needs a license under § 1 AÜG.
  • Maximum assignment period in principle 18 months (§ 1 (1b) AÜG).
  • Equal pay applies after nine months at the latest (§ 8 AÜG).

Definition and classification

Arbeitnehmerüberlassung (staff leasing) is the commercial leasing of employees by a temporary work agency to a hirer, where the employees are integrated into the hirer's operation and subject to the hirer's instructions. Colloquially it is called Staff leasing or agency work.

What characterizes it is the triangular relationship: the agency is the employer in law and pays wages and contributions, the hirer has the authority to instruct during the assignment, and the temporary worker works at the hirer but stays employed by the agency.

What duties do the agency and the hirer have?

The agency carries the employment risk even between assignments, needs the Staff leasing license and has to designate the leasing expressly as such in the contract. The hirer has to observe the maximum assignment period and Equal Pay and is liable on a secondary basis through Secondary liability for social security contributions that go unpaid.

How does staff leasing differ from a Werkvertrag?

Unlike a statement of work , the agency does not owe a result but provides labor – the direction lies with the hirer. If an assignment declared as a Werkvertrag is in fact run like leasing, that is concealed staff leasing .

Frequently asked questions

Is Arbeitnehmerüberlassung the same as agency work?

Yes. Staff leasing and agency work are the common names; Arbeitnehmerüberlassung is the legal term from the AÜG.

May a temporary worker be leased on to a third company?

No. Such onward leasing is in principle not allowed; only the agency that employs the worker and holds the license may lease them out.

Can the hirer dismiss a temporary worker themselves?

No. The employer is the agency; the hirer can only end the assignment, not the employment relationship.

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