AUG (Authorized User Group) Certified
IND Recognised Sponsor
Nasscom Certified
SNA Certified
Nasscom Certified
What Is AÜG?
AÜG (Arbeitnehmerüberlassungsgesetz), the Act on Temporary Agency Work, is the German law that regulates how companies can legally supply and hire temporary workers through staffing agencies. It requires agencies to hold a government-issued licence and sets rules on equal pay, maximum assignment duration, and worker protections.
Companies using an unlicensed staffing agency, or exceeding the 18-month assignment limit, risk having the worker automatically deemed their own direct employee by law.
AÜG at a Glance
| Attribute | Description |
|---|---|
| Full Name | Arbeitnehmerüberlassungsgesetz |
| Governs | Temporary agency work and employee leasing |
| Licence Required | Yes, issued by the Federal Employment Agency |
| Maximum Assignment | 18 months with the same client (per employee) |
| Equal Pay Trigger | Generally after 9 months, unless a derogating collective agreement applies |
| Risk of Non-Compliance | Automatic employment transfer, fines up to €30,000 per violation |
Why Does It Matter?
AÜG has real financial and legal teeth. If a company uses an agency without a valid AÜG licence, or keeps a leased worker beyond the 18-month limit, German law can automatically treat that worker as the client company's own direct employee, along with retroactive social security and pension liability. Many cross-border Employer of Record arrangements in Germany are structured under AÜG, making this law directly relevant to international hiring.
When Is It Used?
AÜG becomes relevant whenever a company:
- Hires temporary staff through a German staffing agency.
- Uses an Employer of Record structure that leases employees under German law.
- Plans a long-term assignment and needs to track the 18-month clock.
A Canadian manufacturing company needs additional production staff at its German facility for a busy season. It works with a licensed German staffing agency, which employs the workers directly and leases them to the client under AÜG. The company tracks assignment length carefully, knowing that exceeding 18 months with the same worker could trigger automatic employment transfer.
Common Misconceptions
No. Agencies must hold a valid AÜG licence from the Federal Employment Agency; using an unlicensed agency creates serious legal risk for the client.
Not necessarily. The equal pay principle generally requires the same wage as comparable permanent staff after a set period, unless a derogating collective agreement applies.
No. The standard rule caps an individual worker's assignment to the same client at 18 months.
No. Many EOR structures in Germany operate under an AÜG licence, since they function as a form of employee leasing.
AÜG regulates temporary agency work in Germany, setting licensing, equal pay, and assignment duration rules that carry serious consequences for non-compliance. Companies using staffing agencies or EOR arrangements in Germany should confirm licensing status and track assignment length closely.
Using staffing agencies or an EOR in Germany?
We'll confirm AÜG licensing status and track your assignment durations to keep you compliant.
experts@adtsolution.com
Queens towers, Delflandlaan 1, 1062 EA Amsterdam, The Netherlands
