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.