Germany is tightening its approach to temporary staffing, cross-border placements, and remote workers operating from within the country. Recent clarifications and new guidance around the Temporary Employment Act (Arbeitnehmerüberlassungsgesetz – AÜG) make one thing clear: regulators expect stronger documentation, stricter adherence to equal-treatment rules, and closer scrutiny of remote or internationally structured assignments.
For recruiters and staffing firms, this marks a shift from focusing solely on domestic labour-leasing issues to analysing where work is physically performed, who directs it, and whether any “hidden leasing” risks exist.
Why the AÜG is Coming into Sharper Focus
The AÜG governs temporary leasing of employees in Germany. Traditionally, enforcement targeted classic agency-to-client secondments within the country. The new guidance expands that lens.
Key regulatory themes emerging for 2025
- Cross-border arrangements (including EU/EEA) are now explicitly within scope when the individual works from Germany, even part-time or remotely.
- Remote work risk: A contractor or employee working from Germany for a foreign client may fall under the AÜG if the client directs day-to-day tasks.
- Equal treatment and pay requirements will be enforced more aggressively, including working time, holiday entitlement, and remuneration.
- Social security and tax checks will increase, particularly where foreign payroll structures try to avoid German contributions.
- Documentation standards are being raised—authorisation, assignment terms, duration limits, and worker protections must be fully traceable.
The message for 2025 is that Germany expects full visibility over any individual providing labour into the German market, regardless of how the contract is labelled.
The updated interpretation creates new scenarios that recruiters and clients must assess.
Remote workers based in Germany
If a worker is hired by a foreign agency and then works remotely from a German address for a German end-client, regulators may deem this to be captured by the AÜG licence.
Key considerations:
- The end-client manages daily work or has the authority to issue instructions.
- Work is integrated into the end-client’s operational structure.
- The foreign employer does not hold a German AÜG licence.
Cross-border teams and short-term assignments
Even short, project-based deployments into Germany can trigger AÜG obligations if:
- direction and supervision come from the German client, or
- the worker temporarily joins a German client’s organisation to perform the assignment.
Freelancers who operate as employees
A freelancer working for one German client, taking instructions and integrating into their processes, risks being reclassified under AÜG principles or German employee-status rules.
What to do to manage the risk
Verify whether an AÜG licence is required
It’s advised that a review of every assignment where the worker will perform work physically in Germany, or will work remotely from Germany, while providing services to a German company.
If the end-client instructs the worker, an AÜG licence could be required.
Strengthen assignment documentation
Auditors, during an investigation, will request:
- the AÜG licence proof
- assignment contracts specifying role, duration, and supervision structure,
- equal-pay/working-conditions calculations,
- confirmation of compliance with German working-time and holiday laws.
Ensure equal treatment from day one
Ensuring the equal treatment rules are followed, and assessments are completed to ensure the worker isn’t being treated differently from other employees working for the end-client directly.
Assess remote-work arrangements
Remote contractors working from Germany must be assessed to ensure that they are operating via the correct structure. Reviewing if the worker is under direction/management by the end-client and integration into team structures will help determine if they need to be operating under AÜG or can work as a freelancer.
What is the impact
Given the increase in enforcement activity, clients should be prepared to change the way they engage freelancer, temporary and remote staff. Increased compliance brings with it increased documentation to protect from audits.
As with any change, the time to onboarding can be longer than previous experience and increased employer costs if freelancers need to transition to an AÜG model.
Germany’s new guidance expands the reach of the Temporary Employment Act into areas that were previously less regulated. For the industry, this is a signal to tighten governance, reassess remote placements, and ensure full transparency in assignment structures.
Compliance is no longer just about holding an AÜG licence. It is about demonstrating clear supervision lines, equal treatment, and proper social security handling for anyone working from Germany, no matter where the employer is based.
