Temporary staffing is used in many sectors, especially in the IT sector, engineering, construction and production. Temporary staffing is also frequently used in industry, for example in the automotive industry, in industrial assembly and in the electrical and electronics sector. Other sectors in which employee leasing is used are the solar industry, medicine and care.

Employee leasing has many advantages for companies. First and foremost, employee leasing is a very flexible solution for finding qualified labour that would be difficult to find in other ways. In addition, employee leasing is also considered a very cost-efficient personnel solution. Finally, there is the high degree of predictability, as the contracts are for a limited period of time. These are just some of the reasons why employee leasing is used in so many sectors.

The Temporary Employment Act (AÜG)) regulates all legal framework conditions for the hiring out of employees. It is therefore the central law when it comes to temporary employment or personnel leasing. As this is a very complex law, it is advisable to work with an experienced personnel service provider. This is the only way to avoid legal pitfalls.

Temporary workers also benefit from the employee leasing model, for example flexible work opportunities and a variety of fields of work that enable them to find work in different sectors and companies. On the other hand, there are also some disadvantages for temporary workers. These include less job security and possibly lower wages compared to permanent employees.

The great advantage of temporary employment is its flexibility and predictability. This means that the client can determine the duration of the assignment of temporary workers. The only restriction: In accordance with AÜG (Temporary Employment Act) must not exceed 18 months. The working conditions of temporary workers - even if they come from abroad, for example from Eastern Europe - must comply with German standards. If legal standards regarding salary, working hours, job security, etc. are not respected, high fines and even imprisonment may be imposed.

Both are handled by the temporary employment agency through which the temporary workers are placed. It sets the salary, which is based on professional experience, qualifications and other factors. The entire administration, including payroll accounting, is also handled by the temporary employment agency. This means that there is no bureaucratic work for the hiring company - and legally flawless processing can be guaranteed!

An illegal supply of labour is always deemed to exist if one or more of the legal conditions for the supply of labour are not met. These can be found in the so-called AUG, the Temporary Employment Act. In particular, tax aspects and guidelines against the exploitation of employees must be observed. Violating the law can have serious legal consequences, ranging from severe fines to prison sentences. This is another reason why it is important to work with a trustworthy partner (a personnel service provider).

Temporary workers in Germany have the same social security obligations and rights as regular employees. Above all, this includes income tax, which is withheld from the salary and paid to the tax office by the employer (i.e. the temporary employment agency). As usual, the amount of income tax for temporary workers depends on their tax class and income. Social security contributions such as pension, health and long-term care insurance must also be paid and are borne proportionately by the employer (the temporary employment agency). 

In international employee leasing, financial aspects such as the adjustment of wages to local standards (minimum wages!), tax obligations in the country of origin and country of assignment as well as social security contributions must be taken into account. Compliance with local laws and double taxation agreements plays an important role in minimising financial risks. The so-called A1 certificate for example, ensures that no double social security contributions have to be paid. Aspects such as exchange rates between currencies and any costs such as language courses or other training must also be taken into account.