Temporary agency work (German: Arbeitnehmerüberlassung, colloquially also called Zeitarbeit or Leiharbeit) refers to the temporary placement of workers by a staffing agency (the Verleiher, or lender) with a client company (the Entleiher, or borrower). Germany's Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) sets out the conditions: staffing agencies require an official licence, the maximum assignment duration is capped at 18 months, and from the 10th month onward an equal pay obligation applies. Violations of the AÜG can result in an employment relationship with the client company arising by operation of law.
What Is Temporary Agency Work?
Temporary agency work describes a triangular relationship between three parties: the staffing agency (Verleiher), the client company (Entleiher), and the temporary worker (Leiharbeitnehmer/in). The temporary worker is legally employed by the staffing agency but is deployed at the client company's premises, where they are subject to the client's instructions.
The terms Zeitarbeit (temporary work), Leiharbeit (agency work) and Arbeitnehmerüberlassung are often used interchangeably in German — they all refer to the same arrangement. The legal framework is provided by the AÜG.
The Three Parties at a Glance
Legal Framework: The Temporary Employment Act (AÜG)
The AÜG was introduced in 1972 and was last fundamentally reformed in 2017. It protects temporary workers from exploitation and establishes clear rules for all parties involved.
Licence Requirement for Staffing Agencies
Anyone who commercially places workers with other companies must hold a licence from the Federal Employment Agency (Bundesagentur für Arbeit) pursuant to §1 AÜG. The licence is subject to conditions, including the reliability of the company and compliance with statutory obligations. Without a valid licence, the placement is unlawful — with significant consequences (see below).
The 2017 Reform – What Changed?
The 2017 AÜG reform introduced four key changes:
- Maximum assignment duration: A single worker may be placed with the same client for no more than 18 months (§1 para. 1b AÜG)
- Equal pay: Entitlement to the same remuneration as permanent staff from the 10th month onward (§8 AÜG)
- Disclosure obligation: Temporary agency work must be explicitly identified as such in the contract
- Strike prohibition: Temporary workers may not be deployed at companies affected by industrial action
The Key Rules of Temporary Agency Work
Maximum Assignment Duration: 18 Months
Under §1 para. 1b AÜG, a temporary worker may be placed with the same client company for a maximum of 18 consecutive months. This limit is person-specific — not role- or project-specific. Collective agreements may deviate from this and allow longer assignment periods. Once the maximum is reached, an interruption of at least three months is required before the same worker can be placed again with the same client.
If the maximum duration is exceeded, §10 AÜG provides that an employment relationship between the temporary worker and the client company arises by operation of law.
Equal Pay from Month 10 (§8 AÜG)
From the start of the 10th month of assignment, the temporary worker is entitled to the same remuneration as comparable permanent employees at the client company. This principle is known as equal pay. Collective agreements may defer the equal pay obligation for up to 15 months, provided they include sector-specific supplements that gradually bring the pay in line with collectively agreed wage levels.
Information Obligations of the Client Company
Under the AÜG, the client company is required to:
- Inform temporary workers about vacancies within the company
- Grant access to communal facilities (canteen, childcare, etc.)
- Notify the works council (Betriebsrat) about the deployment of temporary workers
Distinction: Temporary Agency Work vs. Service Contract vs. Bogus Self-Employment
Misclassifying a working relationship can be costly. The table below shows the most important differences:
Note: If a service contract is structured such that the contractor is effectively integrated into the client's organisation and subject to its instructions, a covert temporary placement exists — with all the legal consequences of the AÜG.
Practical Tips for HR Professionals
As a client company, you share responsibility for the legality of the assignment. The following checklist will help you stay compliant:
Checklist for client companies:
- Verify the staffing agency's valid AÜG licence before starting the assignment
- Document assignment duration per person and deployment site (keep the 18-month limit in view)
- Budget for the equal pay obligation from month 10 onward
- Inform temporary workers about internal vacancies
- Notify the works council about the deployment of temporary workers
- Explicitly identify the temporary employment contract as such (mandatory since 2017)
- Do not deploy temporary workers at sites affected by industrial action
If your organisation regularly relies on temporary staff, it is worth establishing internal processes for monitoring deadlines and managing pay adjustments. A useful complement is embedding onboarding processes that also apply to temporary workers — for better integration and a stronger candidate experience. More on this in the Aivy HR Glossary: Onboarding.
Frequently Asked Questions about Temporary Agency Work
What is the difference between Zeitarbeit, Leiharbeit and Arbeitnehmerüberlassung?
All three terms refer to the same arrangement: the temporary placement of workers by a staffing agency with a client company. Zeitarbeit and Leiharbeit are colloquial expressions, while Arbeitnehmerüberlassung is the legal term defined in the AÜG.
How long can a temporary assignment last?
As a general rule, the maximum assignment duration is 18 months per temporary worker and client site (§1 para. 1b AÜG). Collective agreements may provide for different limits. Once the period has expired, an interruption of at least three months is required. If the limit is exceeded, an employment relationship with the client company arises by operation of law (§10 AÜG).
What does equal pay mean for temporary workers?
From the start of the 10th month of assignment, the temporary worker is entitled to the same remuneration as comparable permanent employees at the client company (§8 AÜG). Collective agreements may defer this obligation for up to 15 months, provided that incremental sector-specific supplements are paid in the interim.
Do staffing agencies need a licence?
Yes. Anyone who commercially places workers with other companies must hold a licence from the Federal Employment Agency (§1 AÜG). The licence is granted on application and is linked to the reliability and financial standing of the company. Without a valid licence, the placement is unlawful.
What happens in the case of unlawful temporary placement?
Where a placement is unlawful — either because the agency does not hold a valid licence or because the maximum duration has been exceeded — §10 AÜG provides that an employment relationship between the temporary worker and the client company arises by operation of law. In addition, fines of up to €30,000 may be imposed. The temporary worker can formally confirm the resulting employment relationship with the client by means of a so-called Festhalteerklärung (declaration of intent to maintain the relationship).
What is the difference between a temporary placement under the AÜG and a service contract?
Under a service contract (Werkvertrag), the contractor owes a specific result (e.g., the development of a software application). The right to issue instructions remains with the contractor. In temporary agency work, the worker is integrated into the client's business and subject to its instructions. If a service contract is operated such that there is effective integration and a right to issue instructions, the AÜG applies — regardless of how the contract is labelled.
Would you like to use objective talent assessment in your recruiting process? The digital platform Aivy supports HR teams with scientifically validated assessments for fair and efficient candidate selection. Learn more about Aivy's talent diagnostics.
Conclusion
Temporary agency work is a flexible but legally demanding instrument of workforce planning. The AÜG establishes clear boundaries — the 18-month limit, the equal pay obligation and the licence requirement — and non-compliance can have serious consequences, up to and including an involuntary employment relationship with the temporary worker. As an HR professional, it pays to document deadlines carefully, label contracts correctly and keep the works council informed. For complex individual cases, consulting a specialist employment lawyer is always advisable.
Sources
- Arbeitnehmerüberlassungsgesetz (AÜG) – Temporary Employment Act. Federal Ministry of Justice, 1972 (last major reform: 2017). https://www.gesetze-im-internet.de/a_g/
- Information on temporary agency work. Federal Ministry of Labour and Social Affairs (BMAS), 2024. https://www.bmas.de/DE/Arbeit/Arbeitsrecht/Arbeitnehmeruberlassung/arbeitnehmerueberlassung.html
- Statistics on temporary employment. Federal Employment Agency (Bundesagentur für Arbeit), 2024. https://statistik.arbeitsagentur.de
- Sector report on temporary employment. iGZ – Interessenverband Deutscher Zeitarbeitsunternehmen, 2024. https://www.ig-zeitarbeit.de
Make a better pre-selection — even before the first interview
In just a few minutes, Aivy shows you which candidates really fit the role. Beyond resumes based on strengths.
