Blog | 12th September 2024
Using an Employer of Record in Germany
Thankfully, commonly shortened to AUG license, an Arbeitnemeruberlassung License is required to compliantly employ people via a labor leasing model in Germany. As described by German law firm Schlun & Elseven Rechtsanwälte, “Employee leasing without the AUG license is a risky business and can lead to fines and other serious penalties”.
Here at Agility EOR, we focus on ensuring our clients are confident that employing via our solution is fully compliant with local labor laws. That’s why we are the proud holders of the AUG license for German labor leasing.
Unsurprisingly, complying with German labor leasing legislation means sticking to some very strict rules. Among the headlines are “no chain leasing”, meaning the client must contract directly with our licensed German entity, “equal treatment”, meaning leased labor cannot be disadvantaged versus directly employed staff, and a time limit on how long a business can used leased labor.
Businesses looking to have employees in Germany might also like to know that;
- In Germany, it is common for employees to have a high degree of job security. This is due in part to strict laws governing termination of employment, which generally require a valid reason for dismissal and provide significant notice periods and severance pay.
- If you offer a bonus to your employees in Germany, it is vital to ensure that the wording in the contract is clear and unambiguous in respect of how much they can get and what actions qualify the employee to receive it.
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