• German Federal Government Planning Reforms to Temporary Employment
  • July 31, 2015
  • Law Firm: GRP Rainer LLP - Cologne Office
  • The German federal government is planning to reform the Act Regulating the Supply of Temporary Workers (Gesetz zur Regelung der gewerbsmäßigen Arbeitnehmerüberlassung (AÜG)), which is to say that the rules regarding sub-contracted and temporary employment are to be revised.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The federal government agreed to a reform of sub-contracted and temporary employment in the coalition agreement. This envisages, for example, plans for equal pay for temporary workers and permanent employees within a company. Temporary workers are to receive equal pay after having worked for nine months in the company. Moreover, temporary workers will as a rule be allowed to be employed for a maximum of 18 months. Exactly what the legislative amendments will look like is not yet clear. The government is expected to deliberate on the matter in May or June.

    However, the reforms are expected to have an impact on the firms supplying the workers as well as their clients and temporary workers. Critics have said that this could be to the detriment of businesses and temporary workers. Handelsblatt reported on March 24 on a study from the employer-friendly German Institute for Economic Research (Institut der deutschen Wirtschaft (IW)) saying that the planned changes could particularly hit unqualified temporary workers. According to this, nearly every second business would take on a new temporary employee for simple jobs after nine months in order to avoid having to pay the higher salary. Businesses have shown substantially greater willingness to commit to equal pay or take on temporary workers on a permanent basis in the case of professionals and qualified temporary workers.

    In principle, temporary employment is a type of employment which is subject to social security contributions. Temporary workers enter into a regular employment relationship with the firm borrowing manpower. The employer thereby enters into the same obligations as is the case with other employment relationships. For instance, the respective collectively agreed arrangements and employee protection against dismissal apply.

    In addition, a working-time account has to be kept for employees. If more working hours are accrued than were agreed then these are credited to the account and, vice versa, working hours deficits can also be deducted. However, this is only possible within a certain framework in accordance with the AÜG.

    Should you have any questions concerning temporary employment, our lawyers who are experienced in the field of labour law can be assistance.