If your company is affected by a shortage of skilled workers, temporary employment is a highly suitable solution for you! Become a partner of Zeitarbeit International, one of the leading temporary employment agencies for personnel from Eastern Europe, and make use of employee leasing from Eastern Europe to fill your staffing gaps. Below, we answer all the key questions on this topic.
At first glance, these three terms may sound like different concepts, but in essence, they all mean the same thing. Each of them refers to the practice of a company "borrowing" workers from another company for a limited period of time. In this process, a staffing agency hires employees who are then temporarily assigned to work for the client company.
This arrangement is particularly useful for covering short-term staffing needs without having to hire new employees directly. Employee leasing is especially common in industries with fluctuating workloads or seasonal demand.
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Employee leasing and temporary work differ in the scope of their meaning. Although the terms are often used interchangeably, the term Employee leasing generally refers to the legal framework of temporary employment — including the regulations and requirements set out in the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz – AÜG). Temporary staffing , on the other hand, is a broader term that describes the nature or structure of this form of employment.
Sectors in which Employee leasing is most prevalent include transportation, logistics, manufacturing, skilled trades, industry, healthcare, IT, and retail — due to their dynamic staffing needs. These industries are often affected by seasonal fluctuations or short-term projects. Employee leasing enables companies to quickly and flexibly adjust their workforce to meet changing demands. This promotes operational efficiency, cost-effectiveness, and risk minimization, helping businesses maintain growth and competitiveness in the market.
Cases of disguised employee leasing occur when workers are assigned without obtaining the necessary official permit in advance. Such cases also arise when so-called contract work is allegedly performed by employees who are, in fact, placed at a client’s site by an employer or staffing agency.
The integration of temporary workers into the client’s operations as if they were permanent employees is also considered an indication of disguised employee leasing. It becomes particularly problematic when the client exercises the right to issue instructions to the temporary worker instead of the actual employer.
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According to the Temporary Employment Act (AÜG), the principle of equal treatment applies. This means that the leasing company is obligated to ensure that temporary workers are treated the same as the permanent staff in the client company. This equal treatment covers the entire duration of employment and includes essential working conditions. There must be no differences between temporary workers and permanent employees, including equal pay, which must be provided in the same amount and manner.
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Temporary employment allows companies to quickly adapt to market changes. This flexibility enhances operational agility and efficiency.
By partnering with staffing agencies, companies can reduce their administrative workload, as tasks related to recruitment, onboarding, and payroll management are handled by the agency. This enables businesses to access qualified professionals without committing to long-term employment contracts.
Temporary employment offers agency workers the chance to gain diverse experiences and access job opportunities across various industries. However, it also comes with certain drawbacks. A common concern among temporary workers is the lack of job security, due to the temporary nature of their contracts, which can lead to financial instability and stress. Additionally, access to benefits such as healthcare and retirement plans often poses a challenge for temporary employees. These factors can negatively impact their overall well-being and financial security.
When companies require temporary staff, they have several options for short-term employment. These include hiring freelancers or independent contractors, engaging workers on a project basis, or offering fixed-term direct employment contracts. Alternatively, businesses can collaborate with external agencies or consulting firms for specific projects. The best choice depends on the company’s specific needs and the type of temporary workforce required.
Temporary employment agencies play a key role in the staffing process. They cover the temporary staffing needs of companies and provide qualified labour. They also take responsibility for recruitment, selection procedures and administrative tasks. They are also responsible for the entire immigration process for temporary workers.
The collaboration between the borrower (client company) and the lender (staffing agency) in temporary employment is governed by an employee leasing agreement. This agreement outlines the terms of cooperation. The lender recruits and provides the workforce, while the borrower defines the job requirements and staffing needs.
The lender is responsible for administrative aspects such as wages and social benefits.
The borrower is responsible for providing work instructions and supervising the temporary workers on a daily basis. To ensure smooth collaboration, clear communication and regular exchange are essential so that the goals of both parties can be achieved.
Digitalization is having a significant impact on temporary employment and employee leasing. Digital platforms simplify the recruitment process by increasing the visibility of temporary workers to potential employers, as well as enhancing the exposure of staffing agencies to job-seeking professionals.
Digital platforms provide companies with easier and faster access to temporary staffing agencies. Additionally, digital tools enable remote working arrangements. Digitalization opens up new opportunities that transcend geographical boundaries—offering clear advantages for both businesses and temporary workers. For companies, this means simplified access to talent worldwide, while workers gain the flexibility to work independently of location.
Collective agreements play a crucial role in determining the wages of temporary workers. These agreements set standardized pay rates and working conditions, ensuring that temporary employees receive the same wages as permanent staff within the same industry. This guarantees fair compensation in the temporary employment sector and promotes social equality, which in turn supports the long-term success of companies.
New trends in temporary staffing and employee leasing include the increased use of digital hiring platforms as well as the integration of artificial intelligence and automation into the recruitment process. AI and machine learning enable a more efficient hiring workflow, with automated systems quickly scanning large volumes of resumes and applications to identify the most suitable candidates.
Additionally, technological advancements require continuous updates and reskilling to meet the demands of new and evolving job roles.
According to the German Proof of Employment Act (Nachweisgesetz), companies based in Germany are required to document the essential terms of an employment contract in writing and provide a copy to the employee. But which details are mandatory, and what form must this proof take? The law mandates that employers must record the key contractual conditions of the employment relationship in writing, sign the document, and hand it over to the employee.
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Statutory regulations on temporary employment
Temporary employment is regulated by the Temporary Employment Act (AÜG). Within this legal framework, various regulations govern temporary employment. The primary aim is to protect temporary workers and ensure fair treatment. These regulations cover aspects such as wages, working hours, social benefits, and occupational health and safety.
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The German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) regulates the leasing of employees. It outlines the rights and obligations of temporary workers as well as the responsibilities of companies that employ workers through staffing agencies. The primary goal of the AÜG is to ensure the protection of temporary employees in the labor market. Additionally, it aims to guarantee fair working conditions and equal treatment.
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In temporary employment, there are labor law regulations that apply equally to all temporary workers. These include provisions regarding employment contracts, wages, working hours, health, safety, and protection against dismissal. Compliance with wage and working time laws is mandatory for every temporary employee. Minimum wage and overtime pay also apply to all temporary workers. Furthermore, adhering to workplace safety regulations is of particular importance. This includes providing a safe working environment and offering adequate training for temporary employees.
Likewise, an employee may not be dismissed before the expiration of the period specified in the employment contract. The maximum duration of employment with the same company is 18 months. Furthermore, compliance with laws against discrimination and harassment in the workplace must be ensured. Strict adherence to these labor law regulations is crucial for all three parties involved.
In temporary employment, companies bear significant responsibility, and any violation of these duties poses a risk to the organization. Companies have legal obligations concerning labor laws, anti-discrimination regulations, as well as rules for the protection and safety of employees in the workplace.
There is a risk of possible accidents or injuries in the workplace. Additionally, financial risks may arise from contract violations or incorrect classification of employees. It is especially important to assess these risks and take appropriate measures. This includes securing adequate insurance coverage, complying with legal regulations, and regularly reviewing contract terms. Read more >>>
Temporary workers have the right to equal pay compared to permanent employees, ensuring fair compensation for their work. They are also entitled to the same workplace safety protections as permanent staff. However, they may sometimes lack certain benefits and occupational safety measures granted to permanent employees. Therefore, a careful review of the employment conditions for temporary workers is essential to ensure fair treatment and compliance with labor laws.
The payroll processing and classification of employees are managed by the temporary staffing agency. The agency determines the salary based on qualifications, experience, and the conditions agreed upon with the client company. Additionally, the staffing agency handles all aspects of payroll administration, including deductions, bonuses, and taxes. They ensure compliance with legal requirements to guarantee accurate, timely, and lawful payment.
Temporary workers are subject to industry-specific hygiene standards and safety regulations, which vary depending on the work environment. However, general guidelines typically include personal protective equipment (PPE), regular training on safety procedures, and measures to prevent accidents. Before deploying temporary workers, both the lender and the hirer must clarify who is responsible for providing the personal protective equipment.
Generally, the lender is responsible for providing the basic safety equipment, while the hirer is accountable for addressing specific workplace hazards and first aid. It is crucial that temporary workers familiarize themselves with the particular regulations at their assignment location and strictly adhere to them to ensure their health and safety and minimize potential risks.
Section 8 (1) of the German Temporary Employment Act (AÜG) enshrines the so-called principle of equal treatment:
“The lender is obliged to grant the temporary worker, for the duration of their assignment to the hirer, the essential working conditions applicable to a comparable employee of the hirer’s company, including remuneration.” In other words, temporary workers have the right to equal treatment regarding key working conditions compared to permanent employees in the company where they are deployed. This includes the right to equal pay, commonly referred to as Equal Pay.
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The Skilled Immigration Act regulates the immigration of qualified professionals to Germany. Its purpose is to facilitate access to the German labor market for skilled workers from non-EU countries. At the same time, the law aims to address the shortage of skilled workers in certain industries. It sets out the conditions under which foreign specialists are permitted to work in Germany. Learn more>>>