Obtaining a License for Employee Leasing (Arbeitnehmerüberlassung) in Germany: A Guide for Foreign Companies

If your company is planning to hire employees in Germany and lease them to other businesses, it’s crucial to understand the requirements and process for obtaining a license under the German Employee Leasing Act (Arbeitnehmerüberlassungsgesetz – AÜG). Here’s a comprehensive guide that covers the essential aspects and the step-by-step procedure for foreign companies, especially those with interests in the German market.

Key Requirements for the AÜG License

To legally lease employees in Germany, companies must meet the following requirements:

  • Legal Form: The applicant must be a legally recognized entity, such as a GmbH (limited liability company).
  • Registered Office: The company must have a registered office in Germany or another EU country.
  • Reliability and Financial Stability: The applicant must demonstrate financial stability and the reliability of its management. This includes providing evidence of no significant tax or social security payment arrears.
  • No Criminal Records: The company’s management must not have any relevant criminal records.
  • Documentation: Submission of various documents such as the company’s articles of association, sample employment contracts, and proof of registration with social security and tax authorities.

Step-by-Step Process to Obtain the License

1. Preparation: Gather all necessary documents. This includes:

  • Articles of association.
  • Personal details and identification documents of the managing directors.
  • Proof of financial stability.
  • Clean criminal records of the management team.
  • Sample contracts for employee leasing.

2. Application Submission:

  • Submit the application to the Bundesagentur für Arbeit (Federal Employment Agency). This can be done online, but identification through an electronic ID or residence permit is required.
  • The relevant regional offices for submission are in Düsseldorf, Kiel, or Nürnberg, depending on the location of your business.

3. Review and Communication:

  • The agency will review the submitted documents. If additional documents or information are needed, they will contact the applicant.
  • The applicant may need to attend training on the legal aspects of employee leasing if the agency deems it necessary.

4. Fees Payment:

  • Pay the required fees, which vary depending on the application type and company size. The initial application fee is typically around €377, while extensions or permanent licenses may cost up to €2,060.

5. License Issuance:

  • Once all requirements are met and the fees are paid, the agency will issue the employee leasing license. The initial license is usually valid for one year and must be renewed annually for the first three years. After this period, a permanent license can be obtained.

Ensuring Compliance

To maintain the license, companies must comply with ongoing obligations such as:

  • Equal Treatment: Ensuring leased employees receive the same pay and working conditions as the company’s direct employees.
  • Regular Audits: The Federal Employment Agency conducts regular audits to ensure compliance with all legal requirements.
  • Reporting: Providing regular reports and updates to the agency about the status of leased employees and any changes in company structure or management.

WW+KN and Baker Tilly Support

At WW+KN, a Baker Tilly company, we offer comprehensive support for companies navigating the complexities of employee leasing in Germany. Our legal experts can assist with:

  • Initial Application: Preparing and submitting your application for the AÜG license.
  • Document Preparation: Ensuring all necessary documentation is complete and accurate.
  • Compliance and Training: Offering training on legal compliance and best practices.
  • Company Formation: Assisting with the establishment of a GmbH in Germany.

For further guidance and support reach out to WW+KN, a Baker Tilly Company. Our experts are here to assist with payroll-related aspects and ensure compliance with all relevant regulations. Interested parties can contact us at info@payrollgermany.de.