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  https://personal-aus-osteuropa.de/en/category/contracts/ Temporary workers & subcontractor placement Mon, 22 Sep 2025 08:37:12 +0000 en-GB hourly 1 https://wordpress.org/?v=6.9.4 https://personal-aus-osteuropa.de/wp-content/uploads/2022/06/logo_2.png https://personal-aus-osteuropa.de/en/category/contracts/ 32 32 https://personal-aus-osteuropa.de/en/2025/02/24/distinction-between-contracts-for-work-and-services-and-contracts-for-the-supply-of-labour/ Mon, 24 Feb 2025 07:59:04 +0000 https://personal-aus-osteuropa.de/?p=14491 Differentiation between contracts for work, service contracts and temporary employment German contract and labour law distinguishes between contracts for work, service contracts and temporary employment. It is important for companies to choose the right type of contract. This enables them to avoid legal risks and work efficiently with external service providers and employees. If a company chooses the wrong type of contract, this will have legal consequences. That is why it is important for companies to know exactly which form of contract to choose.

  Der Beitrag Werkvertrag, Dienstvertrag und Arbeitnehmerüberlassung erschien zuerst auf Fachkräfte aus Osteuropa.

  ]]> Differentiation between contracts for work and labour, service contracts and temporary employment

  In German contract and labour law, a distinction is made between contracts for work and services, service contracts and temporary employment. It is important for companies to choose the right type of contract. This enables them to avoid legal risks and work efficiently with external service providers and employees. If a company chooses the wrong type of contract, this will have legal consequences. It is therefore important for companies to know exactly which form of contract to choose.

  Table of contents

  • Differentiation between contracts for work and labour, service contracts and temporary employment
  • What is a contract for work and services?
  • How do you distinguish between a contract for work and a contract for services?
  • What is the definition and key features of temporary employment?
  • How do you differentiate between work contracts, service contracts, and temporary staffing?
  • What are the legal risks of using the wrong contract type?

  What is a contract for work and services?

  These are two different forms of contract under German civil law. Their purpose and legal structure have significant differences. In both cases, one party provides a service. The obligations of the parties involved are very different. The contract for work is more concerned with achieving a specific result. In the case of a service contract, the activity itself is at the centre and no specific success has to be guaranteed.

  What is a contract for work and labour?

  Sufficient work contracts is regulated in §§ 631 ff. of the German Civil Code (BGB). The contractor undertakes to produce a specific work. The focus here is on achieving a specifically defined result that goes beyond the service. The contractor is only entitled to remuneration once the contractor has fulfilled the result in accordance with the contractual agreements and the client has accepted it.

  In practice, this means, for example, the construction of a building, the repair of an appliance, the development of software or the creation of a work of art. The contractor is responsible for ensuring that the work is handed over free of defects. He is also liable for any defects and deviations from the subject matter of the contract. The client has the right to rectification or can also enforce a reduction in the price if the result does not meet the agreed requirements. In some cases, he can even withdraw from the contract.

  What is a service contract?

  In contrast, the Service contractwhich is anchored in Section 611 of the German Civil Code (BGB), is a continuous or one-off activity for which no specific success is owed. In this case, it is more important that the contractor provides a specific service and not that it achieves a specific end result. 

  An example of a service contract is an employment contract. In this, the employee makes his labour available. However, the employee is not liable for the economic result. Contracts with doctors, lawyers or consultants are also service contracts. Here you pay for their work without knowing for sure whether the desired result will materialise. A doctor, for example, is paid for the treatment they provide. It is independent of whether the healing process occurs as desired. A lawyer is also paid regardless of whether the court case is won or lost.

  What are the distinguishing features?

  The two types of contract also differ in the way they are paid. In the case of a contract for work, payment is only made after the contractor has completed the work and the client has accepted it. In the case of a service contract, the client tends to pay an hourly or monthly wage, regardless of the result achieved. This is particularly important for employment contracts, as the employee is paid for the time worked. It does not matter whether his work is economically successful for the respective employer.

  Another important differentiating factor between the two types of contract is the fact that the contractor is bound by instructions. In a contract for work and services, the contractor works independently. He decides for himself how he provides his services. It is important that the end result fulfils the contractual requirements. This means that a contract for work and labour is less subject to instructions. In contrast, a service contract is much more subject to instructions. This is particularly true for employment relationships. For example, an employee is integrated into a company organisation by the employer. He is also subject to instructions from the employer with regard to his working hours, the type of work to be carried out and the location where he carries out his work.

  How do you distinguish between a contract for work and a contract for services?

  It is often difficult to draw a clear distinction between contracts for work and service contracts. Particularly in cases where the activities have the character of both a contract for work and a contract for services, the distinction can be difficult to make. 

  Take software development, for example. Here, the employer commissions the development of a special software solution with clearly defined requirements for his company. This is clearly a contract for work and services. However, if the IT consultant is subsequently to provide continuous support and consultancy services, this is a contract for services. It is often the case in IT that software is developed first and then support is provided. In this case, the demarcation is difficult.

  Normally, the distinction between a contract for work and a contract for services can be made on the basis of various criteria. In the case of a contract for work, a specific result is required. This is not the case with a service contract. In the case of a contract for work, the client accepts the result. This is not the case with a service contract. The client pays for the contract for work as soon as the desired result is achieved. This is also not the case with a service contract. With a contract for work, the employee has greater freedom. In the case of a service contract, the employee is often closely bound by instructions from the employer.

  

  What is the definition and key features of temporary employment?

  The supply of temporary workers, also known as temporary employment, is regulated in §§ 1 ff. Temporary Employment Acteset (AÜG). In this case, a company, also known as the hirer, hires out its employees to another company, which is known as the borrower. The lender receives its remuneration from the hirer. The leased employees remain formally employed by the lender. They may be bound by the hirer's instructions with regard to day-to-day work. However, as far as working hours, holiday entitlement and the like are concerned, the hirer continues to be bound by instructions.

  Temporary employment differs primarily in that the employee is integrated into the hirer's operational organisation. The employee performs his work for the hirer, who can also give him certain instructions. This is a decisive difference, as the contractor is not integrated into the client's organisation in the case of a contract for work and services.

  The what is temporary employment and how does it work? are typically found in industries that have high, fluctuating staffing requirements. These are particularly peak periods such as Christmas or other public holidays. Logistics and production companies traditionally rely on temporary staffing. Companies in the healthcare sector also frequently rely on temporary staffing when staffing requirements fluctuate. German companies are therefore able to bridge short-term bottlenecks by using temporary workers. The advantage for them is that they do not have to enter into long-term employment relationships.

  How do you differentiate between work contracts, service contracts, and temporary staffing?

  Companies must make a clear distinction between these three types of contract. A faulty contract can have legal consequences for the client and the contractor. Illegal employee leasing and bogus self-employment in particular can result in high penalties.

  The difference between a contract for work and labour leasing is, for example, that the contractor owes a specific piece of work. The contractor works independently. However, he is not integrated into the client's business. If the situation is different in practice, there is an accusation of concealed employee leasing.

  In the case of a service contract, it is often somewhat difficult to distinguish it from a temporary employment contract. A genuine service contract is normally an independent service. If the client integrates the service provider into his company and subjects him to instructions, this is a temporary employment contract.

  What are the legal risks of using the wrong contract type?

  If the wrong type of contract is chosen, this can have considerable legal and financial consequences for all parties. Hidden employee leasing in particular can result in severe sanctions under the AÜG. 

  If companies work with temporary employees who are, however, declared as a work or service contract, social security contributions may be demanded, there may be criminal consequences or the employee concerned may even have to be permanently employed by the company.

  Companies must therefore clearly differentiate between the contents of the contract. If companies actually operate a temporary employment agency but mistakenly conclude contracts for work or services, the authorities can demand additional social security contributions, impose criminal penalties or even order the employee concerned to be permanently employed by the company. In cases of uncertainty, legal advice should be sought.

  Similar topics

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  • Contract for work and labour versus temporary employment
  • Risks and consequences of hidden employee leasing
  • Data protection
  • What are the advantages of hiring foreign skilled workers?

  Interesting facts

  

  Der Beitrag Werkvertrag, Dienstvertrag und Arbeitnehmerüberlassung erschien zuerst auf Fachkräfte aus Osteuropa.

  ]]> https://personal-aus-osteuropa.de/en/2024/12/04/labour-contract-versus-temporary-employment/ Wed, 04 Dec 2024 07:43:48 +0000 https://personal-aus-osteuropa.de/?p=11371 Contract for work and labour versus temporary employment In practice, contracts for work and labour and temporary employment often have the same objective, even if they are completely different in legal terms. In both cases, work is transferred from the core workforce to others. In both cases, personnel from outside the company are brought into the company, either literally or figuratively, by providing additional labour at a different location. This raises the question for a company as to which of the two forms of contract is[...]

  Der Beitrag Werkvertrag versus Arbeitnehmerüberlassung erschien zuerst auf Fachkräfte aus Osteuropa.

  ]]> Contract for work and labour versus temporary employment
  • Contract for work and labour versus temporary employment
  • What is the difference between temporary employment and a contract for work?
  • Why temporary employment?
  • When is it best to use a contract for work and services?
  • Which employment model is best for which situation?
  • Work Contracts & Labor Leasing in Eastern Europe – Partner with Us!

  In practice, contracts for work and labour and temporary employment often have the same objective, even if they are completely different in legal terms. In both cases, work is transferred from the core workforce to others. In both cases, personnel from outside the company are brought into the company, either literally or figuratively, by providing additional labour at a different location.

  For a company, this raises the question of which of the two types of contracts is better. This decision is important because the two types of contracts are regulated differently. They entail different rights and obligations and these must be clearly and separately implemented in practice. Failure to do so can lead to serious legal problems.

  What is the difference between temporary employment and a contract for work?

  In reality, the distinction between the two can be blurred and this is a legal risk. When assessing which legal relationship exists here, we do not look at what is stipulated on paper. Instead, it looks at how it is handled in practice. This can then lead to the aforementioned serious legal consequences if the paper and the practice are not the same. The distinction between the two forms of contracts is made on the basis of certain characteristics, which are as follows:

  1. The labour force

  In the case of employee leasing and contracts for work and labour, employees are seconded to the customer's company. In the case of employee leasing, the aim is to purchase precisely these workers. They are paid by the main company. An agreement is made between the customer and the hiring company as to which and how many workers are to be seconded. The workers council also has a say in whether staff can be hired out and to what extent.

  The contract for work, on the other hand, does not concern itself with the labour force. A specific result is ordered from the contractor. How the contractor then achieves the result is up to him. This also includes how many employees he deploys. This has no influence on the amount of the agreed remuneration. The workers council has no say here.

  2. The time required

  Temporary workers are paid according to the hours they work. This means that the time actually worked is paid at the end. In addition, the assignment of temporary workers is limited to 18 months, although this can be extended to a maximum of 24 months by collective or company agreement.

  For the creation of the work, although a deadline is agreed, it is irrelevant how long the work was actually worked on. Payment is made for the result, not for the hours worked on the result. This makes payment easy to calculate in advance, while at the same time incentivising the contractor to be more efficient.

  3. The organisation

  In the case of temporary employment, the hirer is responsible for organising the workers. It is therefore up to the hirer to deploy the labour efficiently and to monitor the quality of the work.

  Under the law on contracts for work and services, the contractor works entirely on his own responsibility. He determines all work processes himself. This also includes the organisation of the personnel used, such as their number, responsibilities and qualifications. The contractor is also responsible for ensuring the quality of the work.

  4. The right to issue instructions and the affiliation

  Temporary workers become part of the contracting company and are therefore treated the same as the permanent workforce. The user company also has the right to give instructions to temporary workers. Additionally, they fall under the jurisdiction of the works council.

  If a contractor company sends employees to the ordering company, they nevertheless remain part of the contracting company. They can be integrated into the processes of the ordering company if this is necessary for the production of the work. However, they do not participate in the general processes of the company and the workers council is not responsible for them.

  In practice, the ordering companies also issue instructions to the contract workers. However, these instructions only serve to ensure a smooth process. For example, the painters involved in a project may be told which materials and colours to use. However, it is the contracting company that determines when and where the work is to be carried out.

  5. The risk

  In the case of temporary employment, the responsibility for the temporary workers lies with the hirer. This means that the hirer also bears the risks with regard to the deployment of the temporary workers, their productivity and any damage they may cause.

  Under a contract for work and labour, the risk lies entirely with the contractor. It is responsible for deploying its own staff correctly and is liable for any damage caused by them. It should also be clearly noted here that a sham contract for work is always automatically deemed to exist if the contractor is not liable for the work.

  6 The legal regulation

  The contract for work and labour is regulated in the German Civil Code (BGB). For temporary employment, on the other hand, the regulations can be found in the Temporary Employment Act (AÜG).

  It follows from the law on contracts for work and labour that a direct contractual relationship arises between the client and the contractor. However, a triangular relationship arises in the context of employee leasing. There is a contract between the hirer and the hiring company and a further contract between the temporary worker and the hiring company. The hirer takes on the de facto role of the employer. More about labour law >>>

  

  When is employee leasing the right choice?

  The what is temporary employment and how does it work? is a very good solution if labour is simply required across different areas of the hirer's business. It also has the advantage that the hirer is always in control of the work. He has the right to issue instructions and the temporary workers are integrated into the organisation of his company.

  The use of personnel leasing is also very straightforward, as operations continue as usual. Instead of hiring new permanent employees, the tasks are simply performed by temporary workers, which is the main practical difference. The only challenge is the maximum duration limit for temporary assignments. However, since this restriction applies to individual workers, it can be managed by continuously recruiting new employees. Temporary employment contract - content and meaning >>>

  More about temporary work

  When is it best to use a contract for work and services?

  To work with a work contracts and address personnel shortages or capacity constraints within a company, the tasks must be clearly definable as specific work assignments. Additionally, they should be bundled into a single project or block, allowing a service contract company to take over with a team of contract workers.

  If this prerequisite is met or can be achieved through a corresponding reorganisation with a shifting of the core workforce, the contract for work and services offers a number of advantages. In this case, the external workers work under the management of the contract labour company so that no resources and time are required.

  There is no time limit. If a work consists of producing more and more new units, the contract can be continued again and again. Thanks to the payment for the result, financial planning can be simplified here. Scheduling is also easier, as the work or units must be delivered at specific times.

  The contractor also assumes risks such as work destruction, idle labor, and even damages incurred during the creation of the work. This provides significant relief for the client.

  More about work contract

  Which employment model is best for which situation?

  If the main company wishes to retain control over all work, then it is better to hire out employees. The same applies if the work is to be spread across the entire company. A shorter duration of the contract is also an advantage for a temporary employment agency.

  If, on the other hand, the performance of the service is to take longer and it is a block that is to be completed by a team, the contract for work and labour is better. This is especially true in terms of financial and time planning security, as well as risk assumption.

  Conclusion

  The difference between a work contracts and what is temporary employment and how does it work? may be fluid in practice, but from a legal perspective it is better to ensure a clear demarcation here. In the case of temporary employment, the hirer determines the labour force and the time spent. The temporary worker becomes part of the permanent establishment and the latter has the right to issue instructions to them. In contrast, in a contract for work and labor, the contracting company assumes both responsibility and risk. The external workers are not integrated into the client company.

  When deciding whether temporary employment or a contract for work and labour is the best option for a company, it is important to consider how much control and for how long the temporary employees or the contract for work and labour company are needed. Then there is the risk and the organisation of the main company.

  Work Contracts & Labor Leasing in Eastern Europe – Partner with Us!

  With over 20 years of experience in recruitment agency from Eastern Europe we have the necessary experience and expertise to recruit labour from Eastern Europe in the field of industrial assembly, machine relocation, metal construction, steel construction, logistics & transport, electrical engineering and production for your company. We connect German companies with companies in Eastern Europe. 

  Is your company affected by a shortage of skilled labour? Temporary employment and subcontractor out of Poland -, The Czech Republic, Romania, -- Latvia and Eastern Europe are an alternative to support your business. We from Zeitarbeit International,l offer you skilled labour from abroad for industry and trade. Our company also places people throughout Europe subcontractor and freelancers from Eastern Europe. We serve as your bridge between contractor and client. Get in touch with us and benefit from staff from Eastern Europe.

  Contact us

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  Der Beitrag Werkvertrag versus Arbeitnehmerüberlassung erschien zuerst auf Fachkräfte aus Osteuropa.

  ]]> https://personal-aus-osteuropa.de/en/2024/11/26/why-the-labour-contract-is-better-than-its-reputation/ Tue, 26 Nov 2024 11:22:47 +0000 https://personal-aus-osteuropa.de/?p=11272 Why is the contract for work and labour better than its reputation? In itself, a contract for work and labour is simply a contract. It is subject to legal regulations and is often linked to other contracts, for example an employment contract in a company that contracts for work and labour. In all of these cases, contracts are voluntary agreements between the parties and are not ineffective just because individual black sheep do not comply with laws and contracts. With this[...]

  Der Beitrag Warum ist der Werkvertrag besser als sein Ruf erschien zuerst auf Fachkräfte aus Osteuropa.

  ]]>

  Why is the contract for work and labour better than its reputation?

  The work contracts is simply a contract in itself. It is governed by legal regulations and is often linked to other contracts, for example an employment contract with a contractor. In all of these cases, contracts are voluntary agreements between the parties and are not ineffective just because individual black sheep do not comply with laws and contracts. With this fact in mind, it makes sense to take a look at the reputation of labour contracts. It should also be borne in mind that the use and forms of work contracts in companies have increased significantly in recent years. Just as with temporary work, the same factors are behind this.

  1. The contract for work and labour - modern outsourcing
  2. The pressure on all employees
  3. Contracts for work as a rescue measure
  4. Revolution contract for work
  5. The contract for work and labour as a path to freedom
  6. The contract for work and labour as an opportunity
  7. The abuse of work contracts
  8. The contract for work and labour and its advantages
  9. Zeitarbeit International - Your personnel service provider for work contracts
  

  How does the contract for work and labour enable modern outsourcing?

  Work contracts are the means for today's companies to hand over core tasks to other providers who can perform them more cheaply. This ranges from real core tasks to supporting work that allows the actual work of the company to be focussed on more important areas.

  This means that companies are taking an increasingly targeted approach to finding tasks that they can outsource. Typically, these are processes for which no special skills are required. These are, for example, sorting empties, packing, working in the Warehouse.The tasks include the maintenance of the vehicle fleet, the technology and the workshop, as well as tasks in the area of clearance work, delivery tours and general care of the vehicle fleet.

  On the other hand, there are other projects in development or commercial areas. These are also increasingly being outsourced, although here the contract for work and labour is used to buy in special skills.

  This means, for example, that a drinks retailer takes care of its own drinks with its regular staff. A subcontractor takes care of the cleaning, a haulage company takes care of the delivery and an IT company takes care of the new accounting software.

  What can be achieved with work contracts?

  In itself, this is exactly what is meant by contract work in logistics is to be achieved. This means that the outsourcing of certain tasks is not itself the problem. This only comes into play when the work contracts are used, for example, to undermine the protection afforded by collective labour agreements and employee rights in order to reduce costs.

  If a collective agreement has been concluded for a company, it applies to the core workforce. The employees of the subcontractor, on the other hand, are not covered. This allows the subcontractor in question to pay its employees less and to organise the processing of the relevant areas more favourably for the main company.

  In addition to the standard wage, the contracting companies also save on the payment of night and Sunday bonuses. They do not have to worry about the holiday entitlements of the contract workers and they have no say in the main company. Furthermore, the works councils that exist in the main company have no say when it comes to the conclusion of a contract for work and labour. They can neither influence this nor provide assistance to the contract workers.

  Why is there growing pressure on employees regarding labour models?

  The labour market is not called the labour "market" for nothing. Here, too, individual employees are in competition with each other. As in the market itself, everyone comes under pressure when prices fall in one area. For the companies, this means that the wages of the core workforce also come under pressure. If the permanent employees demand too much, their jobs can also be outsourced and they lose their jobs.

  While this pressure exists and often leads to restrained wage demands, this does not mean that the works councils have no power at all. They can take a look at the contracts for work and labour and check whether this is not concealed temporary work. They can also talk to the contract workers and inform them of their rights. With regard to the management in the main company, the works councils can make proposals to improve the security and working conditions of the employees.

  Ultimately, works councils can also use their right of co-determination to make regulations for external employees and their access to certain areas in the parent company. While the free movement of labour, freedom of contract and freedom to provide services are regulated by law, this does not mean that the principle of equal treatment and the fundamental freedoms of employees can be undermined.

  Are contracts for work a solution in times of crisis?

  There are more and more examples of permanent staff being made redundant and then the workers from the contract labour company turning up on the doorstep the very next day. If you take a look at one of these cases, you can quickly doubt the validity of the work contracts.

  Permanent staff with an income at the usual local level are dismissed after years and often replaced by external workers who earn less than half as much. The case is clear: the employer wanted to save money and replace a large part of the workforce.

  

  But if you take a closer look, you realise the pressure German companies are under precisely because of cheap competition from abroad. Customers don't buy the German product on the shelf in the nearest supermarket if it is twice the price of the cheap competition. They also want the lowest price. Accordingly, the companies concerned are on the brink of going out of business and instead of simply giving up and losing the investments and work of the past years and decades in one fell swoop, they are resorting to a new means, the contract for work and labour.

  With the contract for work and labour and the use of external workers, the companies concerned are still able to hold their own on the market. This means that they remain German companies. They also retain at least part of their core workforce so that not everyone loses their jobs, as would be the case in the event of bankruptcy.

  What savings can be made through work contracts?

  There are two sides to every story and this is all too often overlooked. If companies come under pressure, they have to find their own way of dealing with it. A contract for work does not just save costs for employees. It also saves costs in the area of recruitment, as the contract labour company recruits its own employees. It also saves costs for the size of the employee pool, which must be kept in stock. External workers can step in at any time if required.

  This allows companies to concentrate on the area in which they are most familiar and in which they generate their profit. The rest is then outsourced and taken over by other companies under their own management.

  Is the contract for work a game-changer in employment?

  The free market has a declared goal. This is to offer more goods and services at more favourable prices. However, favourable prices and services do not come from anywhere. They come from the increased efficiency of large companies, which puts pressure on smaller companies. And they come from new ways of reducing costs while increasing productivity.

  This is why there is freedom of contract and the free market, so that companies can find their own way of offering more for less. One of the means is the contract for work and labour and it has proven itself in practice. More and more companies in more and more sectors are using this form of contract to outsource certain parts of their work for less cost and less effort.

  Where are contracts for work and labour used?

  From supermarkets and hospitals to hotels, building sites and bakery factories, more and more work contracts are being used everywhere. While on the one hand this depresses wages, on the other hand it means that companies can be set up and find customers that would otherwise not exist, the contract labour companies. These companies hire people who would otherwise find it difficult or impossible to find a job without the contract labour company.

  While wages are rising overall, the demands on productivity are also increasing. Good employees are promoted. Employees who cannot keep up are threatened with the end. Now, however, they have a new opportunity to find a job within the framework of contract labour companies where the pay is commensurate with their skills. If this is not the case, for example if they are very highly qualified, they will also find their way into a permanent workforce.

  Alternatively, highly skilled workers find themselves in contract work companies whose aim is not to take on simple work for unskilled labour. Instead, they become employees in companies that conclude contracts for work and labour, which involve the provision of rare skills with correspondingly high pay.

  What negative effects do labour contracts have?

  The negative effects of work contracts are often exaggerated. For example, it is claimed that hundreds of thousands of people are only employed on low wages as a result of contracts for work and labour. There is no need to doubt these figures, as their significance is indeed interesting.

  They state that in a labour market with around 45 million employees, hundreds of thousands may only earn a little because they work for contractors. This means that the vast, vast majority of workers are not even remotely affected. They also show that this is a minority whose qualifications do not allow them to compete with the other 45 million employees. In a free market system, where there are always winners and losers, this is a situation that has to be lived with.

  In this case, the contract for work and labour and the contract for work and labour companies even have an important catch-up function in that they still offer these less qualified workers a way into gainful employment. In other words, they are saved from unemployment. In addition, contract work organisations have an important bridging function in that they bring jobseekers into employment and allow them to prove themselves by working in a company. They can then be taken on as part of the permanent workforce and thus obtain a permanent position.

  

  Can a contract for work offer more flexibility and freedom?

  While the contract for work and services via contractors prevents employees with lower skills or qualifications from becoming unemployed and paves the way for jobseekers to enter the labour market, there is another group of people who need to be considered. These are freelancers, or simply freelancers.

  This is a special group of people. They often come with a strong desire for freedom and often have special talents and experience. With a contract for work, they are now able to market these talents and experiences without being bound by an employer's instructions or spending their days in an office, regardless of whether they have work or not. Instead, they can work from home on their own initiative and with their own resources on assignments from companies as their clients, thereby securing a sufficient income while retaining their independence.

  What does it look like for freelancers?

  Freelancers are important contractors for companies, especially when it comes to IT or marketing projects. In Germany, there are around 3.6 million freelancers or solo self-employed people who earn their living with contracts for work. Depending on the freelancer's qualifications, hourly rates can exceed €100. The solo self-employed pay their own social security contributions and taxes from this.

  Companies find freelancers on their own portals. These facilitate the conclusion of contracts, allow the freelancer and company to be evaluated and also take care of the transfer of the fee.

  A global comparison even reveals a trend towards more freelancing. In 2023, around 48% of the world's working population were self-employed. Freelancing is an easy way to move in this direction, where freelancers can remain solo self-employed or build up a team and thus an entire company.

  At 72%, most freelancers in Germany are academics with at least a bachelor's degree, but often also a master's or doctorate. This also explains the high incomes and the attractiveness of freelancing, especially for freelancers.

  

  Is the contract for work and labour a real opportunity for companies?

  In the end, you simply have to see the work contract as an opportunity. It's not a lottery win where only the numbers decide. It's not a panacea. It is simply an opportunity for the individual. The extent to which the individual can make the most of it is up to them. At the very least, it is a chance to avoid or end unemployment or, at best, the opportunity to gain freedom and a very good income.

  But this is also where the problem lies. When people talk in general terms about wage rates of two euros an hour, they often forget what is behind it. This is because a company has found itself under such price pressure that it has to cut costs. Then a contract labour company has agreed to take on the work for a very low wage. And then an employee was found who was willing to accept such a low hourly wage at the contract labour company.

  All these aspects must not be forgotten. The main company has not reduced costs of its own accord. The market situation forced it to do so. The contract labour company was not forced to accept the low wages. Instead, it saw this as a positive opportunity for itself. The employee in the contract work company was also not forced to work there at gunpoint and receives compensation from the labour office instead of receiving benefits from the labour office at 100%.

  Why are contracts for work and labour not fundamentally bad?

  Anyone who wants to use such extreme examples to talk down contracts for work should not forget that they are not fundamentally bad. Rather, they are a normal instrument of the market and have been used as such for thousands of years. Every plumber, every expert opinion, every bespoke suit that has been tailored, all of this was agreed with a contract for work and labour.

  So what are the differences? On the one hand, knowledge and skills are utilised. On the other hand, on the side of wage dumping, the simplest and therefore also the least paid jobs are transferred.

  However, the question for the individual is where they want to find themselves in this spectrum. The spectrum must then be completed. Does the individual want to be very well paid as an expert, pay for their daily labour as an average employee or perform the simplest tasks for minimal pay?

  What makes the difference for the individual? 

  Training, attitude, skills, motivation and experience. With the right training, the path to a permanent position is easily open. If the training is completed with a good result, higher salaries are also conceivable.

  If the person concerned has a healthy attitude towards freedom, then they can embark on the path to freelancing as an expert with a good qualification. If they also have special skills, such as creativity, then the prospects of success as a freelancer increase enormously. However, you also need to be able to motivate yourself.

  If, on the other hand, you are looking for less independence, need more motivation from outside and are not quite as blessed with creativity, you are in the right place as an employee.

  The experience in turn helps both the employee and the freelancer. The latter often gains even more experience through their work, as they work almost exclusively in one specific area, while employees often do a variety of different jobs.
  

  How are contracts for work misused in practice?

  Does all this mean that it is always down to the individual, the person concerned? No, it is of course also the case that there are always black sheep, just like everywhere else. These black sheep exploit a system for their own benefit and to the detriment of others.

  When does such abuse occur? The provisions of the law on contracts for work and labour, the distinction from what is temporary employment and how does it work? And provisions to protect employees' rights are sometimes not formulated clearly enough. This allows companies that are not facing the end to resort to wage dumping measures.

  In such cases, this means that the main company would be perfectly capable of operating with the existing profit margins. However, unscrupulous profit-seeking then demands lower costs in order to increase the profit margin to the maximum possible.

  What are the consequences of abuse?

  In such a case, the result depends on the management. If wage dumping is to be maximised, a large proportion of the workforce may quickly find themselves without work just so that they can be replaced by temporary staff or a contract labour company. If the desire for higher profits is present, but not taken to an extreme, then contractors and temporary workers only replace a small proportion of the workforce. Their example, however, puts pressure on the rest of the permanent workforce to work more and not demand higher wages.

  How can you recognise the black sheep? For contracts for work and labour, it's even easier than people often imagine. This is due to the nature of the contract. A contract for work and labour requires the successful completion of a work as specified in the description. This means that the contractor is responsible for bringing about success using its own resources and planning. The labour that is used for this belongs to the contractor. The same applies to the materials used.

  If a subcontractor is now commissioned to take over parts of the work of the ordering company, a black sheep is no longer concerned with the creation of a work. Instead, the regular employees in the ordering company are to be replaced. This means that there is no clearly described work that must be completed by a certain date.

  Similarly, the workers will not work independently following only the instructions of the management of the subcontracted company. Instead, they will be under the supervision of the parent company.

  Last but not least, the subcontractor will not bring its own materials, but will simply use what the main company provides. If only one of these characteristics is present, there is a presumption that a disguised loan of labour is taking place. If all three characteristics are present, it is certain that this is a bogus labour contract.

  It is therefore not the case that an existing law and a contractual form is being abused. Instead, existing law is being broken and a non-contractual form, the contract for work and labour, is being applied to a relationship, temporary work, which is not permitted here.

  When it comes to the contract for work and labour, a distinction must therefore be made between a genuine contract for work and labour and a sham contract for work and labour. The contract for work and labour is a very good instrument in its statutory application and has its own advantages. The sham contract for work and labour is a breach of the law with corresponding consequences.

  

  

  What are the key advantages of using a contract for work and labour?

  The contract for work and labour allows freelancers and contractors to find clients and work on projects. At the same time, it is an instrument with which the service can be securely remunerated in the form of the work created. Conversely, the contract for work and labour gives the customer all the tools they need to obtain a corresponding value for the remuneration paid.

  How does collaboration work in a contract for work and labour?

  In other words, the contract for work brings legal certainty. Within the framework of contractual freedom, this is linked to the independence that entrepreneurs and freelancers need in order to carry out their entrepreneurial activities on their own initiative.

  If an ordering company is a good customer who acts fairly and pays a fair fee, then it is valuable to contractors and freelancers and will be treated accordingly. If a subcontractor or freelancer acts fairly and does a good job, they will also be treated accordingly.

  This means that if both know and fulfil their roles, they have a good working relationship, which is promoted by the provisions of the contract for work and services. This allows them to work together successfully over a longer period of time while maintaining their independence. A subcontractor thus remains a subcontractor and does not become a subdivision of the ordering company. A freelancer remains a freelancer and does not become just another employee in the company.

  How high is the minimum wage?

  While contracts for work are often seen as a means of engaging in wage dumping, the legality of such activities must also be questioned here. Due to its nature and characteristics, the contract for work and labour itself has no influence on the remuneration of employees.

  What actually happens when a contractor is appointed is that a low wage is agreed between the customer and the contractor. For the contractor, this means that only a small budget is available to pay the employees. Their remuneration must therefore be correspondingly low.

  In this context, however, it must also be pointed out that there are statutory minimum wages. The minimum wage applies to all employees in Germany who are at least 18 years old. This applies regardless of whether the employee is German or non-German and regardless of whether the company is German or foreign.

  Although there are exceptions to the minimum wage, these rarely apply to the average employee. For example, employees under the age of 18 without a vocational qualification are exempt from the minimum wage. There are also special rules for the long-term unemployed, for whom the minimum wage only applies after 6 months of work. Apart from this, however, the minimum wage must always be paid.

  Deviations from the minimum wage are also possible under collective bargaining law. This is why certain sectors have their own collectively agreed wages, which are also lower than the statutory minimum wage. However, this does not mean that wages of only €2 per hour are permitted. The minimum wage also applies regardless of how long the employment has existed, in which industry or what scope it has. It therefore also applies to mini-jobbers.

  In addition to the trade unions, the Federal Customs Administration is primarily responsible for ensuring compliance with the statutory minimum wage. Violations of the statutory minimum wage can result in fines of up to €500,000. Anyone who is confronted with wage dumping can therefore take action. The same applies if permanent employees of contract workers find out that they are not being paid the statutory minimum wage.

  Conclusion

  There are cases in which regular employees have lost their jobs due to the appointment of a service contract company or are under pressure not to demand excessive wages. However, there is often corresponding market pressure on the company to reduce prices and therefore also costs in the company.

  Just because there are laws doesn't mean that nobody breaks them. Accordingly, there are also cases of black sheep in the area of contracts for work and labour who engage in wage dumping with bogus contracts for work and labour. However, there is no clearly defined work, the workers are not independent of the parent company and the materials of the contract work company are not used.

  Apart from extreme examples and black sheep, however, it is the responsibility of the individual to position themselves in such a way that they have opportunities on the labour market. This means that with the right qualifications, attitude, motivation, experience and skills, there are many opportunities. These include working as a solo self-employed person with work contracts, setting up your own business and working as an employee. Here it depends on the wishes of the person concerned which path is taken.

  However, if there is a lack of qualifications, attitude, motivation, skills or experience, contracts for work and labour and work contractors are still a way of preventing unemployment. They are also a way for jobseekers to find paid work through contract labour companies.

  However, the contract for work and labour, collective agreements, statutory minimum wages and other regulations provide a good framework that prevents wage dumping and allows many freelancers and companies to acquire customers and do business. They promote mutual cooperation and fair remuneration and prevent or at least make it more difficult to abuse contracts for work and labour.

  Zeitarbeit International - Your personnel service provider for work contracts

  No matter which country of the European Union they subcontractor or need an experienced service provider, we can support you with all questions relating to contracts for work and labour. In the area metal construction or electrical we can also offer you Partners from Lithuania and the entire Baltic region with a lot of manpower. Some of our customers have been working with our international specialist companies for twenty years and subcontractors together. Regardless of how many employees you need for your order or assignment, simply contact our team for an uncomplicated enquiry.

  Even if you need references or model contracts, we will be happy to support you when it comes to your work contract and use our experience to show you completely new and legal ways. Temporary work international looks forward to your inquiry!

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