The legislation referred to in this question is titled “Arbeitnehmerüberlassungsgesetz” or “AUG”. AUG is defined as German companies who lease employees through temporary labor or project based employment through a third party organization or “consultant” status. In other words, the AuG license is related to temporary staffing agencies.
The law states that an employee that is “hired” through one of these means can only be under this model of employment for 18 months before having to become fully employed by the German company. This mandate came into effect in order to avoid German companies placing lower level employees under a third party with less rights or benefits than those employed by the German company.
Panther does not employ employees on a temporary or contract basis. Employees are given full-time rights, benefits, and indefinite employment agreements with notice periods. Employees are hired as full-time employees of our German entity. Secondly, Panther does not work with companies that have a legal entity in Germany.
Our German entity does not hold an AuG license as it is not functioning as a temporary staffing agency. Instead, the legal business purpose is as a “professional employer organization, administrative services outsourcing, human resources, and controlling.”
Our German entity, in the eyes of the law, is the sole legal employer and AUG would not be applicable. This is based on the type of employment agreements, benefits and regulatory reporting Panther provides. Panther currently has staff under employment in Germany and AUG has not been applied.
Our German legal partners have consistently confirmed that German AUG licensing requirements do not apply to our Direct EOR (employer of record) setup in Germany. Panther currently has staff under employment in Germany and AUG has not been applied.