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German Supply Chain Act (LkSG): definition and duties

The German Supply Chain Act obliges companies to exercise due care in their supply chain – including for the external workforce. This entry explains the duties, the thresholds and the link to staff leasing.

Key facts
  • Short form LkSG (Lieferkettensorgfaltspflichtengesetz).
  • Obliges companies to duties of care for human rights and the environment.
  • Applies in stages by company size (among others from 1,000 employees).
  • Staffing providers and subcontractors are part of the supply chain too.

Definition and classification

The German Supply Chain Due Diligence Act (LkSG) obliges companies above a certain size to observe human rights and environmental duties of care in their supply chain – from risk analysis through prevention and remedial measures to reporting.

The duties apply in stages according to headcount; companies with 1,000 or more employees are covered, among others. Importantly: the supply chain includes not only the sourcing of goods but also the people deployed.

What does the LkSG mean for staff leasing?

Staffing provider and Subcontractor are part of the supply chain. Client companies should check their standards – for example minimum wage, social security and occupational safety. An automated check of the records delivers exactly the evidence the LkSG requires, and reduces both effort and liability risk.

Frequently asked questions

Does the LkSG also apply to smaller companies?

Directly only from the statutory thresholds. Through the supply chain, however, the requirements also reach smaller suppliers and providers indirectly.

Does staff leasing count as part of the supply chain under the LkSG?

Yes. Staffing providers and subcontractors are part of the supply chain and therefore of the scope of the checks.

How do you evidence LkSG due care for the external workforce?

Through documented risk analyses and continuous checking of the compliance records of the providers used.

Related terms

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