What is AÜG?
The Arbeitnehmerüberlassungsgesetz, commonly referred to as AÜG, is the German law that regulates employee leasing and temporary work arrangements. It governs how employees can be supplied by one organisation and assigned to work for another, including licensing requirements, assignment limits, and employee protections.
In Germany, many Employer of Record arrangements are treated as employee leasing under AÜG. This makes the law highly relevant for international companies hiring German employees without a local entity.
Key Provisions of AÜG
One of the most significant provisions of AÜG is the 18-month limit. An employee may not be assigned to the same end client for more than 18 consecutive months. This limit applies per individual employee, not per role or project.
AÜG also requires employee leasing providers to hold a valid licence and comply with equal treatment rules, including equal pay after certain thresholds. Authorities assess the reality of the working relationship rather than the contractual label
Compliance Risks for International Employers
German regulators prioritize the “substance” of the working relationship over the contract language. If you use a provider without a valid AÜG license, or breach the 18-month rule, your company faces:
- Automatic Transfer of Employment: The worker becomes your direct employee by law.
- Financial Penalties: Fines can reach €30,000 per violation.
- Back Payments: You may be liable for unpaid social security and pension contributions.
How to Stay Compliant
When hiring in Germany via an EOR, verify that the partner holds a current AÜG license and has a clear plan for the 18-month transition (such as moving the employee to a local GmbH)