Temporary agency work in Germany (German: Arbeitnehmerüberlassung, also called Zeitarbeit or Leiharbeit) means that a lender, the agency, places its own employees with another company, the client, for a limited time. The agency stays the employer and pays the wages. The client directs the daily work and pays the agency a placement fee. The Act on Temporary Agency Work (AÜG) requires a permit for agencies that do this as a business, and an assignment may generally last no longer than 18 months.
This article is the overview. It gives the key rules in one table, a timeline of the 9, 15 and 18 month deadlines, a transparent cost calculation, a decision tree for "temporary agency work or contract for work?" and a checklist for staffing agencies. For details, see our guides to the agency permit, the placement contract, the act section by section and disguised temporary agency work. Status: October 18, 2026. This is not legal advice.
How is temporary agency work structured? The triangle
Three parties, but only two contracts. The agency signs an employment contract with the temporary worker. It signs a placement contract with the client. Between client and worker there is no contract, but there is a factual line of command: a worker is placed with a client when integrated into the client's work organisation and subject to the client's instructions (section 1(1) sentence 2 AÜG).
| Relationship | Contract | Who pays whom | Who instructs |
|---|---|---|---|
| Agency and worker | Employment contract | Agency pays wages, holiday, sick pay | The agency, in employment law terms |
| Agency and client | Placement contract | Client pays the placement fee | No instruction, a pure business relationship |
| Client and worker | No contract | No direct payment | Client, day to day (place, time, content) |
How big is temporary agency work in Germany?
According to the report "Entwicklungen in der Zeitarbeit" by the Federal Employment Agency (January 2026), about 622,000 temporary workers were in jobs covered by social insurance in June 2025. That is 1.8% of total employment. Another 47,000 held mini-jobs. More than one in two works in an unskilled helper role. The sector peaked in November 2017 at about 1.08 million workers and has been below the prior year's level since late 2022. There are around 40,000 lending businesses, of which just under 10,000 focus on temporary agency work (Federal Employment Agency, June 2025).
For clients this means a smaller market with large quality differences between agencies. For agencies it means that those who find suitable candidates faster win the assignments that competitors lose.
Which rules apply? The key provisions of the AÜG
| Rule | Content | Section |
|---|---|---|
| Permit required | Anyone who lends employees as part of their business needs a permit from the Federal Employment Agency | Section 1(1) AÜG |
| Labelling and naming | The contract must expressly state that it is temporary agency work, and the worker is named before the assignment starts | Section 1(1) sentences 5 and 6 AÜG |
| Maximum assignment duration | 18 consecutive months with the same client. Industry collective agreements may differ, and non-bound clients may adopt them by works agreement for up to 24 months | Section 1(1b) AÜG |
| Equal treatment (equal pay) | Same essential working conditions and pay as comparable permanent staff, unless a collective agreement deviates | Section 8(1) and (2) AÜG |
| Deviation only 9 months | A collective agreement may deviate on pay for the first nine months only; longer only with step-by-step alignment (after 15 months at the latest) | Section 8(4) AÜG |
| Wage floor | EUR 15.33 gross per hour from September 1, 2026 to March 31, 2027, then EUR 15.87 | Section 2 LohnUGAÜV 7 |
| No strike cover | No placement in place of striking employees | Section 11(5) AÜG |
| Invalidity and fiction | Without a permit, without labelling, or when the maximum duration is exceeded, an employment relationship with the client is deemed to exist | Section 9 and 10 AÜG |
The wage floor (status October 2026) is only the minimum. Collective agreements and the equal treatment principle can require more.
Timeline: what applies after 9, 15 and 18 months?
The deadlines run per worker and client. Earlier assignments with the same client count in full if no more than three months lie between them (section 1(1b) and section 8(4) AÜG).
| Assignment length | What applies | In practice |
|---|---|---|
| From day 1 | Equal treatment, unless a collective agreement deviates on pay; the wage floor always applies | Pay by collective agreement or like permanent staff, never below the floor |
| Month 9 | Collective deviation on pay generally ends | Equal pay applies, unless the agreement provides step-by-step alignment |
| Month 15 | Latest point for an equivalent pay level under a longer collective deviation | Step models in collective agreements must be complete |
| Month 18 | Maximum assignment duration, unless a collective agreement or works agreement allows longer | End the assignment, hire the worker, or take a break of more than three months |
| After a break of over 3 months | The count starts again | Track days per person and client |
Agencies that do not track assignment data per person exceed these limits without noticing. That is the most common trigger of the legal consequences described below.
Temporary agency work, contract for work, service contract, recruitment: what is the difference?
| Model | What is owed | Right to instruct | Typical risk |
|---|---|---|---|
| Temporary agency work | Labour for a limited time | Client | Permit, deadlines, equal pay |
| Contract for work (Werkvertrag) | A defined result | The contractor | Sham contract if the client gives orders anyway |
| Service contract (Dienstvertrag) | An activity, no result | The service provider | Integration like an employee |
| Recruitment (placement) | Introduction to an employer | The new employer after hiring | Not temporary agency work, no AÜG permit |
The label never decides; the lived relationship does. The law looks at the overall picture (section 611a BGB). If the lender does not assume the usual employer duties, the law even presumes unlicensed job placement (section 1(2) AÜG).
Decision tree: temporary agency work or contract for work?
Go through the questions in order. As soon as one answer points to temporary agency work, the AÜG applies.
- Is there a defined result (a work product, acceptance)? No: it points to agency work or a service contract. Yes: go to question 2.
- Who assigns the daily tasks? If your team gives the work, the person is integrated, which means agency work. If only the contractor decides: continue.
- Does the external person work in your team, with the same managers, meetings and shift plans as your own staff? Yes: agency work. No: continue.
- Is the contractor liable for defects and does it carry the commercial risk? No: agency work. Yes: a contract for work is plausible.
- Does practice match the contract? If in doubt, practice counts, not the contract text.
What does temporary agency work cost? A calculation for clients
The agency charges a billing rate, in practice usually a multiplier on the gross hourly wage. It covers wages, employer contributions, holiday, sickness, recruiting, administration and margin. The example below is deliberately simplified. All values are assumptions, not market prices.
Assumptions: helper role, gross hourly wage EUR 16.00 (above the wage floor of EUR 15.33), 160 hours per month. For a direct hire we assume about 21% employer social security contributions. The multiplier of 1.6 to 2.0 is assumed. Your offer may differ.
| Option | Calculation | Cost per month |
|---|---|---|
| Agency work, multiplier 1.6 | EUR 16.00 x 1.6 = EUR 25.60 per hour x 160 | EUR 4,096 |
| Agency work, multiplier 1.8 | EUR 16.00 x 1.8 = EUR 28.80 per hour x 160 | EUR 4,608 |
| Agency work, multiplier 2.0 | EUR 16.00 x 2.0 = EUR 32.00 per hour x 160 | EUR 5,120 |
| Direct hire | EUR 16.00 x 160 = EUR 2,560 gross, plus 21% = EUR 538 | EUR 3,098 |
In this example agency work costs EUR 1,000 to 2,000 more per month. The comparison is deliberately incomplete. A direct hire also brings recruiting, onboarding, continued pay during absence and notice periods. With agency work you pay for flexibility: you can scale up and down at short notice, and the agency carries the employer risk. From month nine equal pay usually applies, which changes the hourly wage and thus the billing rate. Calculate long assignments with the pay level after month 9.
As a rule of thumb: agency work pays off for peaks and absences. For permanent demand beyond roughly a year, hiring the worker is often cheaper, and the 18 month limit forces the decision anyway.
Typical mistakes and what they cost
- No permit: the contracts are invalid and an employment relationship with the client is deemed to exist (section 9(1) no. 1, section 10(1) AÜG). The worker can stay with the agency only through a declaration to continue, which must be presented in person at an employment agency (section 9(2) AÜG).
- Placement not labelled or person not named: same consequence (section 9(1) no. 1a AÜG).
- Maximum duration exceeded: invalidity applies here too (section 9(1) no. 1b AÜG).
- Equal pay ignored: fine of up to EUR 500,000 (section 16(1) no. 7a and (2) AÜG).
- Use during a strike: also up to EUR 500,000 (section 16(1) no. 8a and (2) AÜG).
- Unlicensed placement or missing labelling: fine of up to EUR 30,000 (section 16(1) nos. 1 to 1f and (2) AÜG).
These are maximum amounts. The actual fine depends on severity and fault.
Checklist for staffing agencies
- Valid permit in place, expiry date in the calendar (see permit guide)?
- Every placement contract with express labelling and the worker named before the start (see contract guide)?
- Assignment length tracked per person and client, including earlier assignments within three months?
- Reminders for months 9, 15 and 18 in the system with eight weeks of lead time?
- Collective agreement chosen and applied, pay never below the wage floor?
- Equal pay check documented, also for periods without assignment?
- Strike clause in the contract, sites checked for strikes?
- Client informed about maximum duration and information duties?
- Contracts for work with clients checked against the decision tree, risk of disguised placement ruled out (see disguised temporary agency work)?
How can staffing agencies find suitable candidates faster?
The legal side is manageable. What remains is the candidate side: assignments happen only if you can field suitable people quickly. Sprad supports staffing agencies with three building blocks, described on the page for recruitment agencies.
- Active sourcing: a requirements-based search across more than 1 billion public profiles and your own talent pool. Web search costs 2 credits per qualified profile, and 200 credits per month are free (status October 6, 2026, per the pricing page).
- Social recruiting: job ads on Instagram and Facebook for frontline workers, drivers and care staff, where agency work has many assignments. An AI talent agent pre-screens applicants via WhatsApp, phone or web. Pricing is ad spend plus 10%, from EUR 1,000 (social recruiting).
- Talent pool: every applicant stays in your own pool. For the next assignment you search there first instead of advertising again.
This does not replace a permit or legal review. It shortens the time between a client request and a suitable profile.
Frequently asked questions about temporary agency work in Germany
What is the difference between Arbeitnehmerüberlassung, Zeitarbeit and Leiharbeit?
Legally none. The Federal Employment Agency uses the terms as synonyms. The act speaks of Arbeitnehmerüberlassung, temporary workers (Leiharbeitnehmer) and temporary employment; in everyday German people say Zeitarbeit.
How long may a temporary worker stay with the same client?
Generally no more than 18 consecutive months. Industry collective agreements may allow longer, and non-bound clients can adopt them by works agreement for up to 24 months. A break of more than three months resets the count.
When does equal pay apply?
In principle from the first day. A collective agreement may deviate on pay for the first nine months, and for a longer deviation an equivalent pay level must be reached after 15 months at the latest (section 8(4) AÜG).
Does every agency need a permit?
Anyone who lends employees as part of their business does. There are exceptions, for example certain placements between group companies or occasional placements (section 1(3) AÜG). Details are in the permit guide.
What happens if the client breaks the AÜG?
Fines of up to EUR 500,000 are possible depending on the breach, and if the employment contract between agency and worker is invalid, an employment relationship with the client is deemed to exist (section 10(1) AÜG).
How does temporary agency work differ from a contract for work?
Under a contract for work the contractor owes a result and instructs its own people. Under temporary agency work the client directs the work. If a contract for work is lived like agency work, it is a sham contract or disguised temporary agency work.
Jürgen Ulbrich
Jürgen Ulbrich has more than a decade of experience in developing and leading high-performing teams and companies. As an expert in employee referral programs as well as feedback and performance processes, Jürgen has helped over 100 organizations optimize their talent acquisition and development strategies.
