In the last few years, banks and financial services companies in particular, but also IT companies, have been ramping up their use of contingent workers. This is related to the fact that many projects are temporary and don’t require the companies to build permanent core capability.
In Germany, the use of temporary agency workers follows the rules of the Act on Temporary Agency Work. Due to a reformation of this Act, with effect to 1 April 2017, temporary agency work has become even more important as a business model for all companies operating in Germany. Businesses and individuals need to ensure they know the rules around when non-EU citizens are permitted to work as temporary agency workers.
Non-EU citizens will usually not be entitled to work as temporary agency workers, unless they can satisfy one of the following requirements:
- They have an unlimited residence permit.
- Holders of a ‘category one’ EU Blue Card category are also entitled to act as temporary agency workers. This residence permit can be granted by the immigration office without prior consent of the labour authorities pursuant to § 2 Abs. 1 BeschV, e.g. if the amount of the annual gross salary is at least EUR 50,800.00 (2017) gross or if the employee has a German university diploma in a listed, needed profession (e.g. as engineer) and at least an annual gross salary of EUR 39,624.00 (2017).
- In addition, non-EU citizens can be employed as temporary agency workers after two years of employment with a (limited) residence permit, without restriction, while contributing to the German social security system. This can, however, be a problem if the employee partially contributes to the social security system of his home country pursuant to a social security agreement between this home country and Germany.
- Finally, a non-EU citizen can also be entitled to work as a temporary agency worker after three years of continuous and allowed residence in Germany.
The illegal employment of non-EU citizens as temporary agency workers can result in fines up to EUR 500,000.00. Therefore it is important that immigration requirements for the engagement of temporary agency workers are met.