Equal Pay in Temporary Agency Work: When Does It Apply?

Equal pay in German temporary agency work means an agency worker is generally entitled to the same pay as a comparable permanent employee at the client company for the whole duration of the assignment – as a statutory principle from day one, not after a waiting period. A collective agreement may only deviate from this for a limited time: full pay parity applies at the latest from month ten without an industry-surcharge agreement, or from month sixteen with one.

This article covers only the practice of equal pay itself: when the claim starts, what counts toward it, how the reference wage at the client is worked out, and what happens if it is violated. The temporary work model itself – who is the agency, who is the client, how the arrangement runs – is covered in Temporary agency work: how the model works, and the full structure of the German law in the AÜG at a glance.

When does equal pay apply in temporary agency work?

The equal-treatment principle sits in Section 8(1) sentence 1 AÜG (the German Temporary Employment Act): the agency must grant the agency worker, for the duration of the assignment to the client, the essential working conditions applicable to a comparable employee of the client – including pay. That means equal pay applies from the very first day of the assignment; there is no statutory waiting period before the claim arises.

There is also a presumption rule (Section 8(1) sentence 2 AÜG): if the agency worker receives the collectively agreed pay that applies to a comparable employee at the client, or – where none exists – the collectively agreed pay usual in that industry, pay equality is presumed to be met without a separate individual comparison.

What deviates in practice is the exception created through a collective agreement for temporary work, not the rule itself. Other essential working conditions – daily working time, breaks, access to shared facilities – apply from day one regardless.

What counts as "equal pay" – more than the hourly rate?

Section 8(1) AÜG deliberately refers to "pay" (Arbeitsentgelt), not to the hourly wage. That covers every pay component a comparable permanent employee at the client also receives:

How is the reference wage at the client worked out?

Four steps decide whether the calculation holds up in practice:

1. Identify the reference employee: a permanent employee at the client doing the same or an equivalent job with a comparable qualification.
2. No real comparator available? Then a hypothetical wage is used – what the client would typically pay for the role in a direct hire.
3. Convert working hours: if the agency worker's weekly hours differ from the reference employee's, the pay is converted to a common hourly basis (worked example below).
4. Value benefits in kind: a company car, canteen meals or a transit pass are converted into a euro value under Section 8(1) sentence 3 AÜG.

The client has to supply this information: under Section 12(1) sentence 4 AÜG, the client must state in the supply contract with the agency what special features the job has, what qualification it requires, and what essential working conditions – including pay – apply to a comparable employee, unless a deviating collective agreement permitted under Section 8(2) or 8(4) sentence 2 AÜG applies instead. The staffing agency has to actively request this information; it is not disclosed automatically.

How far – and for how long – can a collective agreement deviate?

Section 8(2) AÜG permits a collective agreement to deviate from the equal-treatment principle as long as it does not fall below the statutory minimum hourly wage floor set by ordinance under Section 3a(2) AÜG. Where a collective agreement deviates, the agency must grant the worker the collectively agreed conditions – but if that agreement still falls below the wage floor, the agency must instead pay, for every hour worked, the amount a comparable employee earns at the client.

The time limit is in Section 8(4) AÜG: a collective agreement may deviate on pay for the first nine months of an assignment to one client. A longer deviation is only permitted if two conditions are met together: first, at the latest after 15 months the worker must reach a level of pay that the agreement itself defines as equivalent to the collectively agreed pay of comparable employees in that industry; second, after an induction period of at most six weeks, pay must be stepped up gradually toward that level. In practice these are the industry-surcharge agreements (Branchenzuschlagstarifverträge), covered in detail in the article on the iGZ collective agreement.

Interruptions are counted: under Section 8(4) sentence 4 AÜG, time from previous assignments by the same or a different agency to the same client counts in full, as long as no more than three months lie between assignments. A longer gap resets the clock.

An exception to the exception is set out in Section 8(3) AÜG – the so-called revolving-door clause: anyone who left an employment relationship with the client itself, or with a group company within the meaning of Section 18 of the German Stock Corporation Act, in the six months before the assignment begins is entitled to full equal pay immediately – no collective deviation applies to that person.

A wage floor still applies regardless: under Section 8(5) AÜG, the agency must always pay at least the minimum hourly wage set by ordinance under Section 3a(2) AÜG, both during assignment periods and periods without one. Because the exact figure changes with whichever ordinance is currently in force, it is not quoted here – only the currently valid version is authoritative.

A worked example: how is equal pay actually calculated?

The figures below are a fully worked example with disclosed assumptions – not a real collective-bargaining rate and not a recommendation for any specific pay level:

• Full-time assignment at 38 hours a week, starting on the first of a month at one and the same client, with no prior employment there in the previous six months (so the revolving-door clause does not apply).
• Reference wage at the client for the comparable permanent employee, including apportioned holiday and Christmas pay, converted to an hourly basis: €19.80 gross/hour.
• Collectively agreed base pay for the agency worker, without any surcharge: €14.50 gross/hour.
• Assumed collective agreement with industry surcharges on the base pay (a pure calculation example): 10% from month 2, 20% from month 4, 30% from month 6, 40% from month 8.
• This assumed agreement satisfies both conditions of Section 8(4) sentence 2 AÜG: a level of pay defined as equivalent is reached by month 15 at the latest, and pay is stepped up gradually after an induction period of no more than six weeks.

In this example no equal-pay top-up ever becomes due, because the agreed pay curve overtakes the reference wage as early as month eight – well before the 15-month limit. It looks different without a collective agreement meeting both conditions of Section 8(4) sentence 2 AÜG: the permitted deviation then ends after nine months. From month ten the agency must pay the full reference wage without any further test – in this example an equal-pay top-up of €5.30 per hour on top of the €14.50 base rate.

What happens if equal pay is violated?

Agreements that give the agency worker worse conditions than those owed under Section 8 AÜG are void under Section 9(1) no. 2 AÜG. The statutory claim to the pay owed under Section 8 AÜG then exists directly against the agency – the worker can claim the difference retroactively as an equal-pay back-payment.

Fines are also possible: under Section 16(1) no. 7a AÜG, it is an administrative offence to fail to grant a working condition contrary to Section 8(1) sentence 1 or Section 8(2) sentences 2 or 4 AÜG; under no. 7b, to fail to pay, or pay late, the minimum hourly wage under Section 8(5) AÜG. Both offences can be fined up to €500,000 under Section 16(2) AÜG. Depending on the case, the Federal Employment Agency or the customs authorities are responsible for enforcement (Section 16(3) AÜG).

This article explains the legal framework and does not replace legal advice.

Frequently asked questions about equal pay in temporary agency work

Does equal pay apply to short assignments or during a trial period?

Yes. The equal-treatment principle under Section 8(1) AÜG applies from the first day of the assignment, regardless of how long it is planned to last. The only exception is where a permitted collective agreement regulates pay differently for the first nine, or up to 15, months – and for short assignments the collectively agreed rate usually applies anyway in practice.

Does the client have to disclose the reference wage?

Yes, to the agency: under Section 12(1) sentence 4 AÜG, the client must state in the supply contract the essential working conditions, including pay, of a comparable employee – unless a collective agreement permitted under Section 8(2) or 8(4) sentence 2 AÜG applies instead. Without this information the staffing agency cannot bill correctly.

What is the revolving-door clause for equal pay?

It prevents workers being routed through an agency to dodge equal pay: anyone who left an employment relationship with the same client or a group company under Section 18 of the Stock Corporation Act in the six months before the assignment is entitled to full equal pay immediately under Section 8(3) AÜG – no collective deviation applies to that person.

Do premiums and one-off payments count toward equal pay?

Yes. Under Section 8(1) AÜG, equal pay covers the entire pay package, not just base pay: overtime, night and public-holiday premiums, apportioned holiday and Christmas pay, and benefits in kind all count. For benefits in kind, the law expressly allows a euro-value offset instead of the benefit itself.

What happens if a staffing agency underpays?

The disadvantaging agreement is void under Section 9(1) no. 2 AÜG, and the worker can claim the difference to the statutory pay owed. On top of that, fines of up to €500,000 per violation of the equal-treatment principle are possible under Section 16(1) no. 7a and Section 16(2) AÜG.

How long can the 15-month route through a collective agreement be used?

Only if two conditions are met together (Section 8(4) sentence 2 AÜG): pay defined in the agreement as equivalent must be reached by month 15 at the latest, and a gradual step-up toward that pay must start after an induction period of no more than six weeks. If either condition is missing, the permitted deviation ends after nine months.