Employing external staff
In addition to their own workforce, most companies also employ external staff, either as temporary staff, freelancers or on the basis of contracts for particular work or services.
The legal pitfalls and risks associated with employing external staff should not be underestimated, nor should the authorities' ruthlessness in imposing fines. Since the new German Employee Leasing Act (Arbeitnehmerüberlassungsgesetz) came into force on 1 April 2017, the already difficult legal position for companies has become even more critical. Legal hurdles and risks include, for instance:
- false self-employment;
- covert employee leasing;
- significant barriers to employing temporary personnel in businesses affected by strikes;
- standard employee-specific maximum leasing term of 18 months with the same lessee;
- duty to expressly disclose the employee leasing arrangements.
Any breaches of this legislation carry strict consequences under employment, social security, tax and criminal law, which should be avoided at all costs.
Scope of services
- Drafting contracts for all kinds of employment of external staff (eg temporary staff contracts, employee leasing contracts, contracts for services)
- Advising on and reviewing the employment of service providers in terms of compliance (including adjusting existing structures to meet compliance requirements)
- Introducing an on-going risk-management system
- Representing clients before authorities (eg main customs offices, social insurance agencies) and in court
- Advising on all questions relating to the new version of the German Employee Leasing Act
- Advising on the employment of temporary staff during a strike
- International/cross-border employee leasing arrangements
- Training sessions on aspects of employee leasing
A few references
- A major transport company in cooperation with criminal law specialists in relation to investigation proceedings due to alleged illegal employee leasing.
- A major international logistics company on a cooperation arrangement with other logistics service providers involving mutual employee leasing; developing a cooperation structure in compliance with the new version of the German Employee Leasing Act.
- Carbon Rotec in connection with corporate restructurings prompted by the amendments to the German Employee Leasing Act, including the introduction of new working methods and the creative organisation of a system conforming to the amendments to the German Employee Leasing Act.
- Allianz Global Investors on employee leasing arrangements in connection with a large-volume international outsourcing project.
- One of the world's largest conglomerates on delimiting between employee leasing and contracts for services, as well as other issues in connection with the global restructuring of the Energy division.
- A financial institution in connection with a business transfer and subsequent intra-group employee leasing as well as restructuring and filling positions at management level.
News & insights
Publications: 02 JULY 2021
This briefing is Part 4 of a series of briefings aiming at providing an overview of the key elements of the new German Supply Chain Due Diligence Act.Read more
News: 02 JULY 2021
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