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Employer of Record in Germany
AÜG-licensed and built for the deadlines most providers miss
- AÜG Licensed
- Law Firm Backed
- Works Council Experienced
No entity needed to hire in Germany. We hold the AÜG licence directly, and we track every statutory deadline your hire triggers—Works Council review, the month-nine equal-pay step-up, the eighteen-month leasing ceiling—so you hear about each one from us first.
EMPLOYER OF RECORD IN GERMANY
What is an Employer of Record in Germany?
In Germany, employer of record sits inside a specific legal category: Arbeitnehmerüberlassung (employee leasing) under the AÜG. That classification means the provider must hold a leasing licence issued by the Agentur für Arbeit to operate at all.
You direct the work, set the role, and manage performance. We hold the licence, employ the worker on paper, run payroll through the German social security system, and carry the compliance obligations the AÜG assigns to the leasing employer.
Why Employer of Record works differently in Germany?
German law classifies EOR as licensed employee leasing, and the licensing requirement sits on the provider, not the client. Some providers active in Germany don't hold that licence directly — they route your hire through a local partner who does, which creates liability neither party usually expects until it surfaces.
We hold the licence directly. That's the baseline, not the pitch. The real conversation is what actually catches employers off guard once the hire is live: a Works Council with a say in the decision, an equal-pay recalculation at month nine, a leasing deadline at month eighteen that needs a plan before it arrives.
More questions before you commit?
Why choose Iberia Workforce for EOR in Germany?
We coordinate with Works Councils before they become a blocker.
German companies with an elected Betriebsrat have co-determination rights over certain hiring decisions—and a works council can object to a personnel action, delaying or blocking the hire. Most foreign employers don't know a works council exists until the objection lands. We check for one before the hire moves forward.
We price the nine-month equal-pay shift into your budget from day one.
The Gleichstellungsgrundsatz means once a leased employee passes nine months on the same assignment, their compensation must match a comparable internal employee at your company—same salary band, same bonuses, same benefits. We model that adjustment into your cost projections at hire time, so month nine is a number you already expected.
How Employer of Record works in Germany?
Tell us who you need to hire
Role, location, start date, and salary band. EU/EEA national, or does this hire need a Skilled Worker Visa or EU Blue Card? We flag whether your headcount puts the role within Works Council co-determination scope before anything moves forward.
We handle registration, contract, and clearance
Employment contract drafted to satisfy AÜG leasing requirements. Registration with Deutsche Rentenversicherung and the employee's Krankenkasse. Works Council notification filed where applicable. Visa sponsorship processed for non-EU hires. You approve the terms. We handle the filing.
Your employee starts, and the deadlines become ours to track
Monthly payroll accounts for the full statutory social security split—pension, health, care, and unemployment insurance—plus full salary continuation if illness strikes. We track the nine-month equal-pay date and the eighteen-month leasing ceiling from day one, and bring you a transition plan well before either arrives.
Ready to hire in Germany without the legal exposure?
Talk to a SpecialistWhat's included in Employer of Record services in Germany?
Employment Contracts & AÜG Compliance
Drafted to satisfy the AÜG's leasing requirements, with assignment terms structured to avoid chain-leasing exposure.
Payroll & Deutsche Rentenversicherung Registration
Monthly payroll covering the full statutory social security split — pension, health, care, and unemployment insurance, roughly 19–21% employer cost on top of gross salary — registered directly with Deutsche Rentenversicherung and the employee's Krankenkasse.
Sick Pay & Continued Remuneration
Full salary continuation for up to six weeks per illness (Lohnfortzahlung im Krankheitsfall), calculated and filed correctly from the first day of absence.
Works Council Coordination
Notification and consultation with the client's Betriebsrat where co-determination rights apply under the Betriebsverfassungsgesetz — handled before the hire proceeds, not after an objection surfaces.
Work Permits & Visa Sponsorship
Skilled Worker Visa and EU Blue Card applications for non-EU hires, managed in-house with our immigration lawyers.
Dismissal Protection & Deployment Ceiling Management
Full Kündigungsschutzgesetz protection applies automatically from month seven at qualifying companies — we structure terminations to hold up against a challenge. In parallel, we track the eighteen-month Höchstüberlassungsdauer continuously, and bring you options — reset the contract, convert to direct hire, or restructure the role — before the deadline forces the decision for you.
Employer of Record pricing in Germany
Pricing for Germany reflects your hire's specific configuration—visa sponsorship tier, headcount, and Works Council complexity each affect the cost. Get in touch for a quote that maps to your actual hire.
EMPLOYER OF RECORD GERMANY
Frequently asked questions
Is employer of record legal in Germany?
Yes. EOR in Germany operates under the AÜG (Arbeitnehmerüberlassungsgesetz) as a form of employee leasing. The provider must hold a leasing licence issued by the Agentur für Arbeit. We hold ours directly — not through a local partner, which would create an illegal chain-leasing arrangement.
What happens after 18 months with the same employer of record?
German law caps continuous leasing to one client at 18 months (Höchstüberlassungsdauer), reset only by a genuine break of three months and one day. We start planning the transition — contract reset, direct hire, or a restructured role — well before month 18, not as a last-minute scramble.
Does a Works Council have to approve my hire?
If your company has an elected Betriebsrat, it may have co-determination rights over the hire under the Betriebsverfassungsgesetz, and can object to certain personnel decisions. We check this before the hire moves forward, not after an objection stalls it.
What happens at nine months under the equal-pay rule?
Once a leased employee reaches nine months on the same assignment, Germany's equal-pay principle (Gleichstellungsgrundsatz) applies automatically — pay and benefits step up to match a comparable internal employee at your company. We build that step-up into the hire's budget from day one, so month nine isn't new information when it arrives.
Can an EOR sponsor a Skilled Worker Visa or EU Blue Card?
Yes. We handle the application and supporting documentation for the Skilled Worker Visa and EU Blue Card in-house, and manage the ongoing compliance obligations that come with sponsoring a non-EU hire throughout the assignment.
Could hiring through an EOR create a tax obligation for my company in Germany?
For most roles, no — the leasing structure keeps the client outside the German tax net. Senior or client-facing roles that make ongoing business decisions on German soil are the exception. We help classify the role correctly so a hire doesn't inadvertently expose your company to a permanent establishment claim.
What happens if I need to end someone's employment?
Full dismissal protection under the Kündigungsschutzgesetz applies automatically from month seven at companies with more than ten employees. Outside probation, terminations need documented, justified grounds. We structure the process to hold up if challenged.
Who is Iberia Workforce, and what's your legal structure in Germany?
Iberia Workforce holds the AÜG leasing licence directly for Germany, issued by the Agentur für Arbeit — no local partner sits in that licensing chain, which is the exact gap flagged earlier on this page. We're part of Connect Group.
German employment law runs on deadlines, month seven, month nine, month eighteen, not on judgment calls.
Missing one isn't a minor slip; it's a compliance violation with a fine attached. Describe the hire, and we'll map the AÜG structure, the Works Council process if one applies, and every deadline your business needs to track.