Employment Agreement Requirements in Germany Internal

Can employment agreements be backdated in Germany?

Neither employment nor leasing contracts can be backdated in Germany due to the strict nature of Velocity Global’s operation under AUG. All agreements need to be signed at the latest one day prior to the start date.

Can a supported employee work before their start date?

No.

Can we pay the salary in a different currency than the local currency?

Salaries must always be paid in Euro (EUR) to a European bank account.

Should we classify our talent as a contractor or an employee?

They should be classified as an employee when using Velocity Global’s services.

What is AUG and how does it impact hiring in Germany?

In order to provide labor leasing services in Germany, Velocity Global’s local entity holds a German Labor Leasing License (Arbeitnehmerüberlassungsgesetz, AÜG) license.

The license allows for a three-party relationship between a client, Velocity Global, and a supported employee. When Velocity Global hires a supported employee in Germany, there will therefore be an (additional) agreement between Velocity Global and a client. This agreement is called the employee leasing contract (“ELC”). The biggest restriction of the license is the term of the ELC, which is strictly limited to 18 months. After 18 months, the supported employee must enter a 3-month interruption period and after that period they can continue to support the same client on the same working conditions. Velocity Global can still offer indefinite employment agreements to supported employees.

The AUG employment relationship is complex and can be administered in several different ways, so please reach out to Velocity Global through your normal process, and we will help you with any questions you might have.