Temporary employment—also referred to as personnel leasing, temporary work, or personnel provision—is a commercial arrangement in which a company (the temporary employment agency) supplies employees on a temporary basis to another company (the user enterprise). This practice is regulated under the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG) and the Part-Time and Fixed-Term Employment Act (TzBfG).
To legally engage in temporary staffing, the temporary employment agency must declare in the contract that it holds the required permit to provide temporary workers. Since reforms in 2004, temporary workers must be treated equally to comparable employees in the user company, particularly in terms of working conditions and pay (Section 3 (1) No. 3 AÜG). If this equal treatment principle is violated, the agency’s license to operate can be revoked.
A 24-month maximum assignment period also applies, helping prevent long-term reliance on temporary labor for permanent roles. Several sector-specific collective agreements—negotiated between the Collective Bargaining Association for Temporary Work of the German Trade Union Confederation (DGB) and the Federal Employers’ Association of Personnel Service Providers (BAP, formerly BZA)—have been in place since 2004. These agreements regulate pay structures, working time accounts, and other employment conditions for temporary workers.
Under Section 37c of the Social Code, Book III (SGB III), each temporary employment agency is also obligated to establish a personnel service agency to support labor market integration.
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