Triangle Employment Solutions in Germany 

In Germany,  triangle employment solutions are only permitted under the AÜG (Temporary Employment Act)framework. To operate legally, the employer must obtain an AÜG license. 

What is the Temporary Employment Act (AÜG)? 

The Temporary Employment Act (Arbeitnehmerüberlassungsgesetz - AÜG) is the German law that establishes the rules for so-called temporary employment (temporary work or agency work). It regulates when and under what conditions an employer (the lender) may assign its employees to another company (the borrower) for work performance. The AÜG aims to ensure the protection of temporary workers, for example through the introduction of a licensing requirement for temporary employment agencies, a maximum assignment duration, and the principle of equal treatment ("Equal Pay"). 

Core Elements of the AÜG 

Licensing Requirement 
Companies that want to commercially assign employees require official permission from the Federal Employment Agency (Bundesagentur für Arbeit). 

Three-Party Relationship 
There is a contract between the temporary worker and the lender (the temporary employment agency) and another contract between the lender and the borrower (the client company). 

Equal Treatment (Equal Pay/Equal Treatment) 
Temporary workers are generally entitled to equal treatment with the permanent workforce of the borrower regarding working conditions and compensation. Deviations from this are only possible to a very limited extent. 

Maximum Assignment Duration 

An employee may not be assigned to the same borrower for more than 18 months continuously. 

Prohibition of Disguised Temporary Employment 

Temporary employment must be clearly identified as such; if it is not designated as such, it can be classified as illegal temporary employment, resulting in a direct employment relationship between the temporary worker and the borrower. 
 
As an employer of record, Smooth Transition will only take care of paying your employees. We manage payroll, local regulations, and labour legislation. You, as the employer, are still in charge of your employees. Think about working hours, projects, communication. 

An EoR is a cost-effective way to outsource employees in countries where you don't have knowledge. The Employer Of Record can quickly onboard qualitative employees in the country of choice. There's no need to put up a local entity or subsidiary yourself because the EoR has an entity wherefrom the payrolling takes place. 

As an Employer of Record, Smooth Transition takes care of all administrative tasks for your staff. Our employer of record services include: 

• Payroll management 
• Work permits  
• Set up local entities for a compliant payroll 
• Local insurances 
• Taxations