Labour Leasing in Germany
When you intend to supply employees to work under the supervision and instructions of a German company you will require a licence from the German authorities, even if your business is based in the UK.
Arbeitnehmerüberlassung (labour leasing) is defined in the German Labour Leasing Act: an employer (the agency) leases employees in the course of their economic activity to third parties (the hirers). Thus, the employee is employed by the agency, but works for a hirer on a temporary basis. It is always the agency that is responsible for the deduction of taxes, social security contributions etc. because the employment relationship between employee and agency continues, even when the employee works for a hirer. In a nutshell, labour leasing means: the agency assigns its right to supervise and direct the employee to the hirer and thus the employee becomes temporarily a part of the hirer’s team without being the hirer’s employee.
Labour leasing in Germany can only be undertaken legally if the agency has a labour leasing licence.
As of 01 January 2021, British entities are no longer eligible to hold a German labour leasing licence. Only entities within the EU/EEA can be licence holders.
If you would like to apply with your German entity, we will be happy to support and guide you through the application process.
Please find more detailed information in our leaflet.