Staffing Agencies in Germany: What They Do and How to Vet One

A staffing agency (in German: Zeitarbeitsfirma) employs workers directly and assigns them, for a fee, to client companies that then direct their day-to-day work — under German law this is called Arbeitnehmerüberlassung. What matters for a buyer: not every staffing agency is legally allowed to do this, and not every one prices the same way.

How the model itself works — the three parties, the process, when it actually pays off — is covered in our piece on temporary staffing. This one covers the other side: what a staffing agency actually does, and above all how you, as the buyer, tell a legitimate one from a risky one before you sign anything.

What does a staffing agency actually do?

A German staffing agency (legally: Verleiher) takes on three jobs you would otherwise carry yourself: it recruits and directly employs the worker, it pays wages and social-security contributions even during gaps between assignments, and it carries the administrative compliance burden under the Temporary Employment Act (AÜG) — tracking assignment deadlines, calculating equal pay, and reporting to the Federal Employment Agency (Bundesagentur für Arbeit). You are not just buying labor; you are buying the agency's handling of those three obligations. That is exactly why it is worth checking whether the agency actually fulfills them — if it doesn't, part of the fallout lands on you, as the next sections show.

Does the agency even hold a valid licence?

Under § 1 AÜG, any staffing agency that assigns workers to clients as part of its business activity needs a licence from the Federal Employment Agency (source: gesetze-im-internet.de/a_g/, § 1 AÜG, accessed 11 September 2026). Without it, the assignment contract is void — and § 10 (1) AÜG kicks in: an employment relationship is deemed to have arisen automatically between your company and the assigned worker, backdated to the planned start of the assignment. Overnight, you become the legal employer of someone you never hired, with every duty that comes with it.

You can check this yourself, for free, in the register of licence holders run by the Federal Employment Agency at spitzenverbaende.arbeitsagentur.de. The agency states the list is updated daily and can be searched by company name (source: spitzenverbaende.arbeitsagentur.de, accessed 11 September 2026). One detail almost no guide mentions: the agency itself notes that only the locally responsible employment office can give a legally binding confirmation of a licence — the online list is a solid first check, but for anything sizeable, call that office directly.

The licence is also not granted or renewed automatically: under § 3 AÜG, it must be refused if facts suggest the applicant lacks reliability — for example, breaches of social-security law, wage-tax duties, or the maximum assignment period — if the company's organization cannot properly meet standard employer duties, or if it fails to grant the agency worker the conditions owed under § 8 AÜG (source: gesetze-im-internet.de/a_g/, § 3 AÜG, accessed 11 September 2026). A licence that has stood, unlimited, for years is itself a signal: the first licence is granted for one year only, and only repeated review earns an unlimited one. The full application process — documents, fees, timeline — is covered in our piece on the licensing procedure.

What does union pay coverage mean for your price?

As of 1 January 2026, the industry's former collective agreements are officially the DGB/GVP agreement — iGZ and BAP, the two former employer associations, merged into the newly formed Gesamtverband der Personaldienstleister (GVP) back in late 2023. Pay grades and industry surcharges in detail are covered in our piece on the collective agreement — here, only what union coverage means for your invoice matters.

If the agency is bound by this agreement, it may deviate from the equal-pay principle for a limited time: instead of paying the exact wage of a comparable permanent employee at your company from day one, pay rises in steps through industry surcharges and reaches a tariff-defined equivalent level after 15 months at the latest. Without a valid collective agreement, the statutory equal-treatment rule under § 8 AÜG already applies after 9 uninterrupted months at the same client. For your budgeting, that means: a union-bound agency can often quote lower in the first months because the law lets it deviate from full equal pay — an agency without union coverage either has to skip that deviation or take on the legal risk of applying it anyway.

Which agreement applies must, by law, be stated in the agency worker's employment contract (Nachweisgesetz) — ask for it explicitly if a quote looks unusually cheap. An offer with no traceable union reference is not automatically a red flag, but it does warrant a closer look at how the agency actually calculates equal pay from day one.

How do you check references and liability risk?

References mean something different for a staffing agency than for most other vendors: ask specifically for clients in your own industry and of comparable size, not for the total number of branches. An agency that has been active for years with an unlimited licence has already passed the § 3 AÜG reliability review more than once — a more objective signal than a testimonial on its own website.

The real liability risk, though, sits not in the licence but in ongoing social-security contributions: under § 28e (2) SGB IV, your company as the client is liable like a guarantor who has waived the right to first demand payment from the primary debtor, if the agency fails to remit social-security contributions for the workers it assigned to you — limited to the assignment period, but with no way for you to check this in advance other than the agency's creditworthiness and track record (source: gesetze-im-internet.de/sgb_4/__28e.html, § 28e SGB IV, accessed 11 September 2026). If the withholding was intentional, this claim only expires after 30 years instead of 4. That is exactly why a credit check and a look at the commercial register belong in any serious vetting process — not the licence alone.

This article summarizes the legal position to the best of our knowledge but does not replace individual legal advice.

Vetting checklist: what to check before you sign

What does an assignment actually cost?

You can only judge a quote if you know what the bill rate is built from, and what you would pay instead for a direct hire. The following is a worked example with disclosed assumptions, not a universal formula — plug in your own numbers. It assumes a gross hourly wage of €18.00 for comparable qualifications, a calculation factor commonly seen in practice of 1.5 to 2.2 times the gross wage (we use roughly 1.9), and a full-time role at 160 hours a month.

In this example, the assignment costs about 40% more per month than a direct hire — in exchange, you pay only for hours actually worked, carry no dismissal-protection risk, and lose no time to recruiting. Whether that trade-off is worth it depends on utilization and how long you need the role filled; our piece on temporary staffing covers when the math flips. For judging a quote, one rule of thumb holds: if an offer sits well below 1.5 times the comparable gross wage, check closely whether social security, downtime, and equal-pay surcharges are genuinely priced in — a rate that's too low usually just defers the risk, whether as a later back-payment claim or as client liability under § 28e SGB IV.

Frequently asked questions about staffing agencies

What is a staffing agency?

A staffing agency (legally: Verleiher) directly employs workers and, for a fee, assigns them for a limited time to client companies. It stays the legal employer throughout the assignment, paying wages and social-security contributions, while the client company directs the day-to-day work. Under German law this model is called Arbeitnehmerüberlassung and is governed by the AÜG.

How do I check whether a staffing agency holds a valid licence?

The Federal Employment Agency's free register of licence holders at spitzenverbaende.arbeitsagentur.de can be searched by company name and, per the agency's own statement, is updated daily. For a legally binding confirmation — before a large contract, for instance — also call the locally responsible employment office directly.

What does equal pay mean for the price I pay?

Equal pay requires the agency to match a comparable permanent employee's pay after 9 uninterrupted months without a collective agreement, or after 15 months under an industry-surcharge agreement. Until then, a union-bound agency can often price lower because the law allows it to deviate step by step — which is why union-covered quotes are frequently cheaper at first.

What's a normal bill rate in temporary staffing?

A bill rate is the gross hourly wage multiplied by a calculation factor covering social security, downtime, administration, and margin — in practice usually 1.5 to 2.2 times the wage, most commonly around 1.8 to 2 times. At an €18 gross wage, a plausible rate falls roughly between €27 and €36.

Is my company liable if the agency doesn't pay social-security contributions?

Partly, yes: under § 28e (2) SGB IV, your company as the client is liable like a guarantor for unpaid social-security contributions, limited to the assignment period. If the withholding was intentional, that claim only expires after 30 years. A credit check on the provider belongs in any serious vetting process for exactly this reason.

What's the difference between iGZ, BAP, and GVP?

iGZ and BAP were two separate employer associations, each with its own collective agreement for temporary staffing, until they merged into the newly formed Gesamtverband der Personaldienstleister (GVP) in late 2023. Since 1 January 2026, the unified DGB/GVP agreement applies across the board. Pay-grade details are covered in the linked piece on the collective agreement.