Temporary agency work (Arbeitnehmerüberlassung)
Temporary agency work is the fixed-term assignment of a company's own employees to another company that directs their work. In Germany it is governed by the Arbeitnehmerüberlassungsgesetz (AÜG), requires a licence, and is capped at 18 months per assignment with the same hirer.
When it applies
What matters is not the label on the contract but how the work is actually performed. Temporary agency work exists where a person is integrated into the hirer's organisation and follows its instructions on time, place and content of the work, while the employment contract sits with a third party. In interim management this constellation often arises without anyone intending it.
The core rules of the AÜG
Licence. Anyone assigning employees needs a licence from the Federal Employment Agency. Without it the assignment contract is void, and an employment relationship is deemed to exist between the assigned person and the hirer.
Maximum duration. Under section 1(1b) AÜG the same person may not be assigned to the same hirer for more than 18 consecutive months. Deviations are possible only through collective agreements in the hirer's sector; interruptions of up to three months are counted towards the period.
Equal treatment. Under section 8 AÜG assigned employees are in principle entitled to the hirer's essential working conditions, pay included. Collective agreements may derogate, as a rule for the first nine months, and up to fifteen months under staged collective pay agreements.
Designation. The assignment must be expressly designated as such in the contract, and the assigned person named before the assignment begins. A licence kept in reserve does not cure a mislabelled arrangement.
What this means for interim management
Interim managers in Germany mostly work as self-employed contractors under a service contract. In that case no agency work exists, because no employee is being assigned. That classification only holds while the person genuinely works on their own responsibility and outside the instruction hierarchy.
Where an interim manager takes a line function with full integration, fixed presence and subordination to instructions, agency work through a licensed provider is the legally safe route. The price is the 18-month cap and the equal-treatment obligation. The price of the wrong choice is false self-employment.
This is general information, not legal advice.