FAQ - International temporary employment

International temporary employment or labour leasing from abroad is the temporary assignment of employees from one country to work in another country. This practice is a response to a labour shortage or the need for certain skills in another country. 
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Employee leasing from abroad offers companies greater flexibility in the market. It enables them to respond quickly to changing workforce demands. Temporary staffing makes it possible to bridge short-term personnel shortages without entering into long-term commitments. This is particularly beneficial during seasonal fluctuations or when dealing with specific project requirements. In addition, international employee leasing provides easier access to qualified specialists — especially in industries or regions where skilled labor is in short supply.

International temporary employment can involve several risk factors, such as breaches of legal responsibility, cultural differences, and language barriers. Violations of applicable laws and regulations may result in legal disputes with financial consequences and reputational damage. Cultural differences and language barriers also pose risks, as they can negatively impact the efficiency of temporary work arrangements. This often leads to misunderstandings and reduced work performance. To minimize these risks, a thorough legal review, clearly defined contractual agreements, and effective communication are essential.

Illegal employee leasing occurs when a company hires workers without the required legal authorization or violates applicable labor laws and regulations.
This can take various forms, such as the exploitation of workers without adequate protection or fair compensation, or the evasion of taxes and social security contributions. Illegal employee leasing can have serious legal consequences for all parties involved, including fines and criminal prosecution.
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Industries that have a high demand for short-term or seasonal labour make more frequent use of the practice of international employee leasing. These include sectors such as the Construction, which Production, which industrial projects, which IT industrycrafts and the catering trade.

International temporary work is also common in industries with complex supply chains and global business models. These include, for example Automotive industry and the Electronics industry. These industries are often dependent on flexible labour to cover peak times or to make certain skills available at short notice.

Taxes and social security contributions for temporary workers in Germany are levied in accordance with the applicable tax and social insurance regulations. Typically, income tax as well as pension, health, and unemployment insurance contributions are deducted directly from the employee’s wages. The exact amount of these deductions depends on the worker’s income and other individual factors. It is essential that both temporary workers and their employers understand and fulfill their tax obligations properly in order to avoid legal consequences.

Temporary employment in Germany is overseen by the Federal Employment Agency. It enforces the Temporary Employment Act and monitors compliance with its provisions. The Customs Administration, on the other hand, is responsible for investigating and prosecuting illegal temporary employment. The Federal Employment Agency works closely with the Customs Administration; both authorities conduct joint investigations and share information on suspected cases. The goal is to ensure the integrity of the labor market and protect workers.

Foreign workers in Germany, whether highly skilled specialists or unskilled seasonal laborers, make a significant contribution to the German economy. They play an important role in various sectors: construction, manufacturing, agriculture, skilled trades, information technology, healthcare, and more. They contribute to the diversity and competitiveness of the German labor market. Among others, they come from The Czech Republic, Slovakia, Hungary, Slovenia, Romania, Poland, and other EU countries, as well as Eastern Europe.
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Collaboration between companies and staffing service providers in international employee leasing involves the selection, provision, and management of workers by the service provider on behalf of the company. All initial and operational details are governed by temporary employment contracts. These contracts address all matters related to the rights and obligations of the parties involved.

Digitalization plays a key role in international employee leasing. It facilitates collaboration across long distances and streamlines recruitment processes. Additionally, it enhances communication across borders.
Modern digital platforms enable organisations to efficiently manage international talent pools, track performance metrics and ensure regulatory compliance.

Furthermore, digital tools such as artificial intelligence and data analytics optimize workforce planning and decision-making. At the same time, they enhance operational efficiency and support strategic decisions in international human resource management.

Companies ensure the quality of international employee leasing through several measures. First, by conducting a thorough evaluation when selecting service providers, including verifying compliance with labor laws and assessing their experience in managing cross-border assignments. Next, by establishing clear contracts that define rights, responsibilities, and performance expectations. Finally, by strictly adhering to these agreements.

In addition, regular performance appraisals and continuous improvement initiatives improve the quality of service. And that is an incentive for long-term partnerships in international employee leasing.

Financial aspects to consider in international employee leasing include recruitment costs, visas, relocation expenses, accommodation, and transportation. Additionally, expenses related to compliance with legal requirements in both the sending and receiving countries must be accounted for. Exchange rates and fluctuations in labor costs should also be factored in. Furthermore, potential costs for cultural training and language courses for posted workers need to be taken into consideration.

It is particularly important to plan a budget for unforeseen events and develop strategies to minimise risk. In this way, potential financial uncertainties can be effectively cushioned.

Companies face various challenges in international employee leasing. These include navigating complex rules and regulations, managing cultural differences, and overcoming language barriers across different countries. Meeting the requirements of labor laws, immigration regulations, and tax obligations in multiple jurisdictions can be difficult. This often results in increased administrative efforts and legal risks.

Additionally, workplace multiculturalism can lead to misunderstandings and differing work styles, which may affect teamwork and productivity. Integrating diverse cultures and overcoming communication and cultural barriers therefore require strategic approaches in human resource management. Furthermore, investments in cross-cultural training and support programs are necessary.
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Labor law, visa regulations, tax laws, and social security provisions are especially important for employee leasing from abroad. These regulations cover aspects such as working conditions, entry and work permits, tax obligations, and social security requirements for foreign workers. Companies must ensure compliance with all relevant laws in both the country of origin and the host country to avoid legal consequences and ensure a smooth temporary employment process.
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In Germany, temporary workers must meet certain legal requirements to be eligible to work. These include having a valid work permit and complying with legal regulations regarding working hours, minimum wages, occupational health, and safety. Temporary staffing agencies must hold a license to operate as such. These requirements are designed to protect workers and ensure a fair and equitable working environment.
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A revolving door clause is a provision in collective agreements or laws. It states that an employee may not be directly employed by the client of a temporary staffing agency for a certain period after the end of their employment. This means that at least six months must pass before the employee can be assigned to the same company again through the temporary staffing agency.

Under international labor law, temporary workers have specific rights and protections. These are established by international labor organizations and relevant conventions. They include the right to fair wages, reasonable working conditions, and workplace safety. Additionally, in many countries, temporary workers are entitled to freedom of association and access to social benefits. It is important for employers to comply with international labor standards and respect the rights of temporary workers to ensure fair and equitable working conditions.

Special regulations apply to employee leasing within the EU under the EU Posting of Workers Directive. This directive sets minimum standards for working conditions and remuneration. Companies must ensure compliance with these requirements to avoid legal consequences. The aim of the directive is to create fair competition and provide adequate protection for posted workers.

Various documents are required for temporary employment from abroad. These include

-proof of right of residence
-work permit or visa
-employment contract
-proof of address
-social security certificate

The specific requirements vary depending on the country of origin and destination, as well as the type of work and planned duration of assignment. It is essential to submit all documents completely and on time to avoid legal complications and ensure a smooth process for employee leasing.

Temporary employment in Eastern Europe refers to the practice whereby Eastern European workers are hired out by a hirer (usually a temporary employment agency) to a user company, often in another European country, for a limited period of time.

Companies in Western Europe utilise Employees from Eastern Europe often due to lower labour costs, the availability of qualified workers or to cover seasonal fluctuations and temporary peaks in demand.

In the case of international temporary employment, the labour law of the country of hiring always applies. This includes working hours, holiday entitlement, continued payment of wages and other working conditions.

The A1 certificate is proof that an employee is covered by social security in an EU member state. It is required when an employee is temporarily posted abroad to show that they remain covered by social security in their home country.
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Yes, according to EU regulations, temporary workers must be protected in the event of accidents at work in accordance with the law of the country of hiring.

The EU Posting Directive requires client companies to pay posted workers at least the statutory minimum wage of the host country.

The EU Posting of Workers Directive sets the legal framework for the posting of employees within the EU, including their working conditions and wage standards. The following documents are required for subcontractors:

–Business registration certificate: In most EU countries, registering a business is required in order to operate as a subcontractor.
–Tax number and VAT identification number: As a subcontractor, you must properly fulfill your tax obligations. This includes having a tax identification number and, for cross-border activities, a VAT identification number.
–Proof of insurance: Depending on the nature of your business activities, you may require various types of insurance — such as liability or professional indemnity insurance. These coverages are important to protect your business and minimize potential liability risks.
–Business account: A separate business account simplifies accounting and ensures a clear separation between business and personal finances. This is especially important for tax reporting and bookkeeping purposes.
–Contracts and agreements: Ensure that all contractual agreements are documented in writing — especially those with your clients. Clearly define all key aspects, such as scope of services, payment terms, and liability provisions.
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The lender is obliged to ensure that the posted workers are paid and employed in accordance with the conditions applicable in the country of hiring. They must also handle the necessary administrative processes such as the A1 certificate.

This may vary depending on the posting regulations of the host country. In general, posted workers may be assigned for up to 12 months, with the possibility of an extension for an additional 6 months.

Both the hirer and the lender may be subject to sanctions such as fines if the regulations on temporary employment are violated. In addition, claims for damages or back wages incurred by temporary workers can be asserted against the hirer.