Employee Leasing Act

For German companies or foreign entities looking to hire temporary contractors in Germany, the provisions to do this legally are found within the Employee Leasing Act (“Arbeitnehmerueberlassungsgesetz”). The most important thing to know about labor leasing in Germany is that a company or individual that leases out German employees as contractors must hold an Arbeitnehmerüberlassung (AUG) license. Most of the time, foreign entities that are seeking contractors or looking to send employees for a temporary contract in Germany will go through a third-party entity employee leasing company that holds an AUG license to hire and manage temporary employees.