Temporary Employment in Eastern Europe – Legal Aspects of Temporary Work

The Employment Contract in Temporary Work

The basis for every employment relationship is the employment contract. This contract is entered into between the client company and the staffing agency and must include the following information:

• The type of employment contract. For example, if a Collective Bargaining Agreement Applied? If so, which collective bargaining agreement is it?
• The one applicable to the temporary worker Pay Grade. This must be specified even if pay is based on a specific collective bargaining agreement. The hourly wage must also be specified.
• The contract must specify whether the Minimum Wage is observed. However, this requirement may be waived if the temporary worker is entitled to a higher hourly wage.
• Is the Place of Residence If the workplace is farther away, it must be specified whether and how travel and lodging expenses will be covered. These are often referred to as Reimbursement of Expenses listed.

It should be noted that employment contracts are generally concluded in writing between the employee and the employer. However, the written form is not required by law, at least not in the case of a permanent employment contract. This means that a permanent employment relationship is legally valid even without a written employment contract—an employment contract concluded verbally is a valid employment contract.

However, in the case of an employment contract concluded verbally, the employer must set forth the basic terms of the work to be performed in writing before the employee begins work. These must be signed by the employer and then provided to the employee. A one-month deadline applies, and §2 of the NachwG applies.

A fixed-term employment contract, on the other hand, must be concluded in writing from the outset. This is stipulated in Section 14(4) of the TzBfG. If a fixed-term employment contract is concluded verbally, a valid employment relationship is established, but the fixed-term aspect of the contract is not valid—the result is an indefinite employment relationship.

Integration and Subordination

Temporary workers are integrated into the client company and are subject to its professional Guidelines. What constitutes integration and where the obligation to follow instructions begins depends on the terms of the employment contract and actual workplace practices. If actual practices differ from the terms of the contract, the practices take precedence.

In addition, a An employment contract between the temporary worker and the staffing agency must be in place, which, according to §1, para. 1, sentence 2 of the AÜG obliges the employee to perform work that is subject to instructions and determined by others, in a relationship of personal dependence.

Mandatory Social Security Coverage

Because an employment contract is entered into between the temporary worker and the staffing agency, the resulting employment is automatically subject to full social security coverage.

Social security contributions are split equally between the temporary staffing agency, as the employer, and the temporary worker. The staffing agency is responsible for registering the employee with the social security system.

However, in the case of short-term employment or a “minijob,” different rules apply for social security. Whether the requirements for short-term employment are met depends on the duration of the employment relationship with the temporary staffing agency, but not with the client company.

Compensation

Within the framework of temporary staffing in Eastern Europe, there is a minimum wage—the industry-specific minimum wage, also known as the wage floor. Wages must not fall below this level. The minimum wage is governed by the Temporary Staffing Act and also applies to temporary staffing from abroad.

Minimum Wage – Collective Bargaining Agreement

The project, which was completed in 2022, Minimum Wage Collective Bargaining Agreement A minimum wage for temporary agency work is now generally binding by regulation. The sixth statutory regulation on a minimum wage for temporary agency work established, effective November 1, 2024, a Hourly wage of at least 14.00 euros back and forth March 1, 2025: an hourly wage of 14.53 euros. Other collective bargaining agreements, such as the BAP and iGZ, have defined their own minimum wages, which can be found in the corresponding pay scales.

Correct Classification

From the very beginning, the following is important for determining the pay of an individual temporary worker: correct classification. It should be noted, however, that client companies often classify the work itself as very low-level, which then leads to underpayment. To prevent this, the collective bargaining agreements on pay scales include BAP and iGZ Criteria, according to which the classification must be made. Both collective bargaining agreements are similar in their essential provisions. If the classification is not done correctly when the employment contract is signed, it can be changed later; however, in practice, such changes are generally difficult to enforce legally.

Classification must therefore be done correctly at the very beginning of the employment relationship and must be based on the work to be performed later at the host company. In this context, the employee’s qualifications or the profession they have learned are not decisive—the determining factor for classification is ultimately the decision of the host company.

The client company determines the specific job for which the temporary worker will be assigned; however, the temporary employment agency is responsible for assigning the worker to a pay grade. The decisive factor is the qualification required for the assignment within the client company. The staffing agency and the client company may also agree, if necessary, to classify the work to be performed at a lower level. This ultimately leads to lower personnel costs and, consequently, a financial disadvantage for the employee. To protect their interests in this situation, temporary workers are advised to ask the staffing agency to provide them with a job description detailing their tasks and responsibilities.

Qualifications of Temporary Workers

The situation is different if the job to be performed requires a specific educational background, or if the client company explicitly requests a specific qualification. In such cases, the temporary worker’s qualifications are relevant. Furthermore, a high initial pay grade cannot be lowered for subsequent assignments. Thus, if a high pay grade is assigned during an initial assignment, it remains in effect for subsequent assignments with other client companies and must be maintained—even if the work performed for subsequent client companies would actually warrant a lower pay grade.

Temporary Work and Short-Time Work Benefits

The topic of short-time work is relatively complex and can be viewed from different perspectives. Before the COVID-19 pandemic, the legal situation was straightforward: short-time work was not an option for temporary agency workers. This stemmed from Section 11 of the Temporary Employment Act (AÜG), which stipulates that the employer must pay compensation even for periods when the worker is not on assignment, and thus bears the industry-specific risk associated with such periods.

However, in times of crisis, it is usually temporary agency workers who are laid off first. Consequently, efforts were made during the pandemic to find an alternative solution. Under pressure from the unions, it was made possible—at least temporarily during the pandemic—to apply for short-time work on behalf of temporary agency workers as well.

Similar circumstances prevailed during the financial crisis from 2009 to 2011. At that time, it was also possible—at least temporarily—to apply for short-time work for temporary agency workers. Under normal circumstances, therefore, it is generally not possible to apply for short-time work—however, exceptions to this rule are certainly made during crisis situations.

Statutes of limitations for claims arising from the employment relationship

Claims arising from an employment relationship, such as the Entitlement to Wages or the Payroll for Temporary Workers, must be asserted within a prescribed period of time. The statutory deadlines Otherwise, the right to assert these claims will expire.

These deadlines are set forth in the applicable laws or collective bargaining agreements. For example, the Collective Bargaining Agreements under BAP and iGZ, that all claims against the other party shall be settled with a 3-month period expire. To prevent them from expiring, claims must be asserted in writing against the temporary employment agency within these 3 months.

If the temporary employment agency rejects the claim—which must also be done in writing—legal action may be taken against this decision. Here, too, the deadline is 3 months after the rejection of the claim is served.

Working Hours During Temporary Employment

There are also regulations governing working hours for temporary agency workers. According to the collective bargaining agreements of the DGB collective bargaining association, a full-time position entails a 35-hour workweek. For part-time work, the number of hours worked per week may be less than 35. The rules of the client company apply to the start and end of the workday, as well as the distribution of working hours throughout the week.

Work Time Accounts – Overtime Hours

In temporary work, working time accounts are typically established. These serve to balance the work that is to be performed according to the agreement and the work actually performed. All hours worked during the agreed-upon employment period are credited as „overtime" or „extra hours.".

For the Handling of Extra Hours There are collective bargaining provisions in place. Under the BAP, overtime may not exceed 200 hours; however, during seasonal fluctuations, the working time account may contain up to 230 additional hours in individual cases, which serves to secure employment. The iGZ sets 150 “plus hours” as the maximum. In the case of part-time employment, the upper limit of 200 or 150 hours must be adjusted in the individual contract in accordance with the agreed-upon working hours.

Accumulated overtime hours may be compensated as time off after consultation with the respective temporary staffing agency. If the temporary worker wishes to exercise this right, he or she must notify the temporary staffing agency within a deadline specified on an individual basis. A period of time off taken in this manner may not be interrupted by a new assignment.

If an account has a high number of plus hours, these can also be paid out instead of being offset with time off. A “high number” is defined as exceeding 105 plus hours under the collective bargaining agreement with the BAP and 70 plus hours under the collective bargaining agreement with the iGZ.

Part-time employees

For part-time employees, this threshold must be considered in relation to their number of working hours. Under the collective bargaining agreement with the BAP, it is possible to pay up to 70 hours of overtime in cash, even for part-time employees.

If the employment relationship with the temporary staffing agency ends, the employee must be paid for any remaining positive hours. If there is a period during which the employee is not on assignment, this period may not be offset against the overtime hours. Employers often try to pressure employees into taking time off in lieu of the overtime hours. However, this is not permitted.

Business Risk

The employer must bear the business risk. Among other things, this means that the employer must continue to pay for working hours during periods when the temporary worker is not on assignment. However, this also imposes an obligation on temporary workers to remain available for a new assignment. To this end, the employer and the temporary worker must agree individually on the temporary worker’s availability. If a temporary worker agrees to have their overtime balance settled during a period when they are not on assignment, there is no longer a need to be on call for a new assignment before the end of that period.

Occupational Safety and Accident Prevention

With regard to occupational safety and the implementation of necessary accident prevention measures, both the staffing agency and the client company are responsible for temporary workers. Employees must comply with the relevant measures and guidelines.

The same provisions apply to the temporary employment relationship Occupational Safety and Health Laws as well as for the company’s regular staff. This means, for example, that the employer must identify and assess existing occupational risks and potential hazards in the workplace—and do so before the employee begins the actual work.

In the three-way relationship of temporary employment, the employer (the temporary staffing agency) and the client company must cooperate. This is stipulated in Section 8 of the Occupational Safety and Health Act. In this context, one of the two companies must provide the employee with personal protective clothing and equipment free of charge. In practice, temporary workers receive their personal protective equipment from the staffing agency—this includes, for example, helmets and shoes. Special protective equipment, on the other hand, is provided by the client company as needed.

An occupational safety and health agreement may be entered into between the staffing agency and the client company. This agreement governs responsibilities and working conditions and specifies what equipment is required. However, such an agreement must not be to the detriment of the employee. At the work site, the client company is responsible for informing temporary workers of any hazards to their safety and health before they begin work.

Termination and Protection Against Unfair Dismissal

Like all other employees, temporary agency workers are protected against dismissal.

Protection Against Dismissal

Termination and protection against termination are particularly important when an assignment at a client company ends and no new work can yet be assigned. In such a case, the absence of work to be performed does not under any circumstances justify immediate termination. Instead, the staffing agency must continue to pay wages or a salary. The employer of a temporary worker is not the client company but the staffing agency. If there is no client company, the staffing agency is responsible for paying the temporary worker’s wages—anything else would constitute an impermissible transfer of business risk to the employee.

It often happens that temporary workers are laid off for operational reasons, with a lack of available work cited as the justification. Alternatively, employment contracts—which are very often fixed-term—are simply not renewed. It is now also legally possible to enter into employment contracts that are specifically tailored to the duration of the assignment—this is known as Synchronization . If termination occurs in this context, a whole series of provisions from the German Civil Code (BGB), the Unfair Dismissal Protection Act, and—if applicable—collective bargaining agreements come into play, which significantly raises the legal bar for termination.

The Notice Period

Every termination is subject to a Deadline This notice period is intended to allow the employee to make the necessary arrangements for the termination of the employment relationship. The notice period is set forth in Section 622(1) and (2) of the German Civil Code (BGB). If termination occurs during the probationary period, shorter notice periods apply in accordance with Section 622(3) of the BGB.

Collective bargaining agreements may deviate from the statutory notice periods specified in Section 622(4) of the German Civil Code (BGB) and may even be shorter. The DGB/BAP collective bargaining agreement stipulates that during the probationary period, the notice period is 1 week for the first 3 months. From the 4th to the 6th month, the notice period is 2 weeks, which corresponds to the statutory minimum.

In the case of a new hire, it is lawful to shorten the notice period for the first two weeks to a single day. However, this must be specified in the employment contract. The following rule applies: Anyone who has already been employed by the same staffing agency within the past 3 months is not considered a new employee.

Under the DGB/iGZ collective bargaining agreement, an employee may be terminated within the first 4 weeks of the probationary period with 2 weeks’ notice. From the 5th week through the 2nd month, the notice period is 1 week. From the 3rd through the 6th month, it is again 2 weeks. Starting in the 7th month, the statutory notice periods apply again.

Statutory Notice Periods Without a Probationary Period

If no probationary period was agreed upon or if it has already expired, the statutory notice periods apply in both cases:

• For an employment relationship lasting 2 years or less: 4 weeks on the 15th or at the end of a calendar month.
• For a duration of 2 years or more: 1 month at the end of a calendar month.
• For periods of 5 years or longer: 2 months at the end of the calendar month.
• For periods of 8 years or more: 3 months at the end of a calendar month.

Strikes in the Temporary Employment Sector

Under Section 11(5) of the Temporary Employment Act (AÜG), temporary agency workers not only have the right to refuse to work at a company where a strike is taking place—they must also be explicitly informed of this right by their temporary employment agency. In such cases, they retain the right to compensation.

Temporary staffing agencies are not permitted to use temporary workers as strike breakers. However, there are two exceptions to this rule: If an emergency service has been agreed upon for the client company, temporary workers may be deployed even during a strike. The second exception applies if the user company does not deploy the temporary workers to perform the same tasks that were carried out by the striking permanent employees.

However, these exceptions apply only between the user company and the staffing agency and are not binding on the individual temporary worker. This means that even if the user company intends to assign a temporary worker during an ongoing strike under one of these two exceptions, the individual temporary worker may refuse to comply.

Special Case: Occasional Temporary Assignment of Non-Temporary Employees

According to Section 1, Paragraph 3, Item 2a of the AÜG It is permitted to occasionally assign workers without a permit from the Federal Employment Agency. This is possible between two employers, as long as such assignments occur only occasionally and the workers in question were not hired for the purpose of being assigned.

Furthermore, in such a case, the consent of the individual employee is required. However, this consent may be granted on a blanket basis as part of the employment contract. During such a temporary assignment, the same working conditions apply as at the home company, unless a collective bargaining agreement provides otherwise. If, on the other hand, the host company provides for better working conditions, then those conditions must apply.

Disguised Labor Dispatch

If a company employs workers and does not classify them as Temporary Employment If this is not explicitly stated, it is considered disguised temporary employment. This is often the case when the client and the contractor enter into a contract for work or a service contract. It is important that these contracts explicitly state that the contractor is acting as an independent contractor. However, employees are often deployed in a manner consistent with traditional temporary staffing—that is, they work within the company under the client’s direction and are integrated into the client’s operational processes.

In the case of disguised temporary employment, the contracting party does not have a license to provide temporary employment services. The arrangement is not identified as such, and this constitutes a violation of the Temporary Employment Act. Learn More