The ABCs of temporary work
What is temporary work?
There are numerous terms and formulations in the field of temporary employment. We at rt Personal help you to understand them better. In this small wiki, we explain all the common terms relating to personnel services and temporary work.
End of Employment Act
The Posted Workers Act was enacted to define generally binding basic criteria for minimum working conditions in cross-border industries. The law ensures that the same working conditions apply to both nationals and foreigners.
Temporary employment permit
In Germany, the temporary employment permit is a basic requirement for operating a company in the temporary employment sector. The permit must be reapplied for annually for the first three years, after which time the temporary employment permit is usually issued for an unlimited period. Permission is granted by the respective regional directorate of the Federal Employment Agency. The temporary employment permit of rt Personal GmbH can be found here.
Temporary Employment Act (AÜG)
The process, framework conditions and legal basis of temporary work in Germany are regulated by the Temporary Employment Act (AÜG). The first AÜG was enacted in August 1972 and permitted temporary work in the Federal Republic of Germany for the first time. The Temporary Employment Act was originally intended to provide social protection, particularly against exploitation. Today, the legislator is also pursuing labor market policy objectives.
Employment contract
The employment contract is generally concluded between the employee and the employer. The personnel service provider assumes the statutory employer obligations such as payment of wages, social security contributions, continued payment of wages in the event of illness and vacation. If an employment contract is concluded between the hirer and the temporary worker, the “Instruction sheet for temporary workers” must be handed out, which contains the most important regulations of the AÜG.
Working time account
The working time account records hours worked in excess of the monthly fixed working time. The working time account is more precisely an overtime account. Within the framework of the existing employment contract, time off can be ordered by the employer or employee, depending on the hours recorded. This compensatory time off can only be taken within defined limits (2 days per month; limit: -21 or +150 hours). Time off in lieu can only be compensated according to the amount of overtime in the account. The hours withdrawn are deducted from the working time account. The working time account protects employers against paid non-employment. The employee can thus obtain additional paid vacation days without debiting his vacation account.
Order peaks
An order peak is when a company has to handle an above-average number of orders for a limited period of time. Temporary work serves the economy to cushion these peaks. In such a scenario, companies dispense with overtime and work off the overtime with flexible staff. Studies have shown that flexibility during such order peaks is one of the main reasons for temporary work.
Triggering
The term “allowance” refers to amounts that the employer can reimburse to an employee tax-free if the temporary worker has incurred additional expenses as a result of their work. The activity must be recognized as a change of assignment. This basic requirement is met by temporary employees. Typical examples of allowances in the sense of additional expenses are travel costs, additional meal expenses and accommodation costs.
Main construction industry
The main construction industry consists of economic sectors that have concentrated on building construction and civil engineering or specialized construction activities. Temporary work is not permitted in these sectors. With the exception that generally binding collective agreements of the respective company permit this. The ban could be lifted with an agreement between IG Bau and the employers. It is the only restriction with regard to the possible applications in the temporary employment sector. However, it is controversial that construction companies from other European countries are allowed to take on workers in the main construction industry on a commercial basis.
Applicant management
Applicant management is another function of temporary employment. Temporary employment agencies can provide hirers with personnel for specific positions. In this way, client companies can try to prevent the threat of a shortage of skilled workers. Depending on the response of the hirer, there is the option of taking on the temporary worker or requesting another worker from the personnel service provider. The advantage for the company is that there are no tendering or viewing costs.
German Trade Union Confederation (DGB)
The German Federation of Trade Unions is a collective bargaining association. The DGB has one of two collective agreements for the temporary employment sector in Germany. The second tariff is provided by the Association of German Temporary Employment Agencies (iGZ). These contracts set out basic provisions such as remuneration, working hours, overtime, notice period, continued employment and tax law.
Right of direction
A temporary worker is subject to the so-called right of direction in the client company, which is also known as the right to issue instructions. The right of direction determines the basic nature and form of the work content as well as the place and time of performance. However, the temporary worker is still bound to the temporary employment agency under labor and social law.
Disposition
The term disposition describes the bringing together and coordination between the hirer and the borrower. The aim of scheduling is to create the ideal workload for the temporary employment agency.
Triangular relationship
The triangular relationship describes the interaction between all temporary employment stakeholders. This includes the employee or temporary worker, the client company or the hirer and the temporary employment agency / lender. The temporary worker concludes an employment contract with the temporary employment agency that covers all relevant points of employment law. The hirer and the lender then conclude a temporary employment contract which sets out the assignment of the temporary worker to the client company. However, the temporary worker’s employer remains the temporary employment agency.
Use
Assignment means the work that a temporary worker performs for the hirer. As the term temporary work already defines, this is a temporary assignment.
Borrower
The hirer is one of the three parties to the triangular relationship. The hirer is the client of the temporary employment agency, the temporary employment agency. The hirer and the lender jointly conclude a temporary employment contract, which specifies the form in which a temporary worker is to work for the hirer within the framework of the temporary employment.
Equal Payment / Equal Treatment
In the temporary employment industry, the terms “equal payment” and “equal treatment” refer to the equal payment and treatment of temporary workers compared to permanent employees. This approach is usually difficult to implement in practice, as the two types of employee are based on completely different contracts. Vacation entitlements, profit sharing and other monetary salary components are a particular problem here. The German Temporary Employment Act (AGÜ) provides in principle for equal treatment of temporary workers, but this can only be enforced by the respective collective agreement.
Permit certificate
The license certificate documents that a personnel service provider is licensed to provide temporary workers on a commercial basis. The date and issuing authority are an integral part of the employment contracts and must be amended immediately in the event of changes. You can find the authorization certificate of rt Personal GmbH here(LINK).
First labor market
The regular labor market is referred to as the primary labor market. The counterpart to this is the second labor market, which refers to occupations that are not gainful or are remunerated with a reduced wage. Temporary work is regular employment and therefore an integral part of the primary labor market. Like all players in the primary labor market, the temporary employment sector does not benefit from any government support.
Skilled worker
A skilled worker is a qualified specialist who has learned a specific profession. The qualification as a skilled worker is documented in the form of a certificate (journeyman’s certificate, certificate of completion, skilled worker’s certificate, etc.). The ever-increasing shortage of skilled workers in Germany is boosting demand for temporary work. 63% of all temporary workers are qualified skilled workers, 30% are helpers and 7% are academics.
Association of German Temporary Employment Agencies (iGZ)
Alongside the DGB, the Association of German Temporary Employment Agencies (iGZ) is the second major employers’ association for temporary work. rt Personal GmbH is also a member of iGZ and concludes all contracts on the basis of the collective agreement negotiated here.
Adhesive effect
The bonding effect describes the takeover of a temporary worker by the hirer. Projections have shown that just under a third of all temporary workers benefit from the bonding effect. Based on their work, they are recruited by the hirer and permanently integrated into the company.
Leasing personnel
Leasing personnel is another term for temporary and agency workers.
Temporary work
Leiharbeit is another term for temporary work and originates from the earlier days of temporary employment. However, the term is still part of the AÜG, but is used comparatively less today.
Minimum wage
The collective agreements of iGZ and DGB also contain the basic principles on minimum working conditions. One of these conditions is the minimum wage. The minimum wage in the temporary employment sector is currently €9.00 in the West and €8.50 in the East. Depending on the temporary worker’s activity, various surcharges (night work, hazard surcharge, etc.), bonuses and commissions may be added.
Personnel services
Personnel services refers to all services within the scope of employee leasing, temporary employment, personnel placement and on-site management.
Personnel planner
The personnel planner is the link between the temporary worker and the hirer’s superior. The dispatcher manages and coordinates requests, work assignments and employment on behalf of the temporary employment agency. Personnel planners are part of the internal staff of a rental company.
Personnel placement
Recruitment describes the targeted placement of personnel with companies. Companies can forward vacancies to recruitment agencies so that they can find a suitable employee. Until August 1994, the Federal Employment Agency had a monopoly on job placement. After his case, numerous personnel service providers, including rt Personal GmbH, specialized in the placement of specialists and managers.
Qualified personnel
Qualified staff refers to employees who have a certain level of professional training and do not work as helpers. Almost 70% of all temporary workers fall into this category. Skilled workers, who are in high demand, make up the largest share.
Regular employees
Permanent employees are employees who are permanently employed by a hirer. The bonding effect ensures that a third of all temporary workers are integrated into the permanent workforce by the hirer.
Tariff opening clause
In Germany, the equal pay principle generally applies to temporary workers. This can only be deviated from if a collective agreement specifically concluded for temporary work is used. This option is called a tariff opening clause.
Collective agreement
All basic working conditions are set out in a collective agreement. This agreement was negotiated between iGZ and DGB for the temporary employment sector. The collective agreement regulates, for example, the basic provisions for pay, working hours, overtime, notice period, continued employment and tax law.
Transfer period
The assignment period determines how long a temporary employee works for the hirer. The duration is defined in the temporary employment contract between the temporary employment agency and the client company. Until 2003, the maximum limit was 24 months, but has since been completely abolished. Theoretically, this means that temporary workers can work for the hirer for an indefinite period.
Transfer agreement
The temporary employment contract is concluded between the temporary employment agency and the hirer and is the contractual basis for the supply of temporary workers. The contract is an integral part of the triangular relationship between the temporary worker, the hirer and the lender.
Lender
The temporary employment agency is a synonym for the term temporary employment agency.
Clearing rate
The billing rate is the remuneration paid by the hirer to the temporary employment agency for the deployment of a temporary worker.
Right to issue instructions
A temporary worker is subject to the so-called right to issue instructions to a hirer, also known as the right to issue instructions. The right to issue instructions defines the basic content of the work to be performed, as well as the place and time of performance. However, the temporary worker is still bound to the temporary employment agency under labor and social law.
Temporary work
Temporary work or temporary employment is when an employee (temporary worker) is hired out by an employer (lender) to a third party (hirer) for a limited period of time in return for payment. The temporary employment agency assumes the rights and obligations of the employer.
Temporary employees
The employees of a temporary employment agency who are transferred to other companies to work there are also called temporary workers. They are also referred to as external personnel.
Temporary employment agency
A temporary employment agency is a company that is permitted to provide temporary workers on a commercial basis. Its core business is hiring out workers to external companies for a limited period of time.
End of Employment Act
The Posted Workers Act was enacted to define generally binding basic criteria for minimum working conditions in cross-border industries. The law ensures that the same working conditions apply to both nationals and foreigners.
Temporary employment permit
In Germany, the temporary employment permit is a basic requirement for operating a company in the temporary employment sector. The permit must be reapplied for annually for the first three years, after which time the temporary employment permit is usually issued for an unlimited period. Permission is granted by the respective regional directorate of the Federal Employment Agency. The temporary employment permit of rt Personal GmbH can be found here.
Temporary Employment Act (AÜG)
The process, framework conditions and legal basis of temporary work in Germany are regulated by the Temporary Employment Act (AÜG). The first AÜG was enacted in August 1972 and permitted temporary work in the Federal Republic of Germany for the first time. The Temporary Employment Act was originally intended to provide social protection, particularly against exploitation. Today, the legislator is also pursuing labor market policy objectives.
Employment contract
The employment contract is generally concluded between the employee and the employer. The personnel service provider assumes the statutory employer obligations such as payment of wages, social security contributions, continued payment of wages in the event of illness and vacation. If an employment contract is concluded between the hirer and the temporary worker, the “Instruction sheet for temporary workers” must be handed out, which contains the most important regulations of the AÜG.
Working time account
The working time account records hours worked in excess of the monthly fixed working time. The working time account is more precisely an overtime account. Within the framework of the existing employment contract, time off can be ordered by the employer or employee, depending on the hours recorded. This compensatory time off can only be taken within defined limits (2 days per month; limit: -21 or +150 hours). Time off in lieu can only be compensated according to the amount of overtime in the account. The hours withdrawn are deducted from the working time account. The working time account protects employers against paid non-employment. The employee can thus obtain additional paid vacation days without debiting his vacation account.
Order peaks
An order peak is when a company has to handle an above-average number of orders for a limited period of time. Temporary work serves the economy to cushion these peaks. In such a scenario, companies dispense with overtime and work off the overtime with flexible staff. Studies have shown that flexibility during such order peaks is one of the main reasons for temporary work.
Triggering
The term “allowance” refers to amounts that the employer can reimburse to an employee tax-free if the temporary worker has incurred additional expenses as a result of their work. The activity must be recognized as a change of assignment. This basic requirement is met by temporary employees. Typical examples of allowances in the sense of additional expenses are travel costs, additional meal expenses and accommodation costs.
Main construction industry
The main construction industry consists of economic sectors that have concentrated on building construction and civil engineering or specialized construction activities. Temporary work is not permitted in these sectors. With the exception that generally binding collective agreements of the respective company permit this. The ban could be lifted with an agreement between IG Bau and the employers. It is the only restriction with regard to the possible applications in the temporary employment sector. However, it is controversial that construction companies from other European countries are allowed to take on workers in the main construction industry on a commercial basis.
Applicant management
Applicant management is another function of temporary employment. Temporary employment agencies can provide hirers with personnel for specific positions. In this way, client companies can try to prevent the threat of a shortage of skilled workers. Depending on the response of the hirer, there is the option of taking on the temporary worker or requesting another worker from the personnel service provider. The advantage for the company is that there are no tendering or viewing costs.
German Trade Union Confederation (DGB)
The German Federation of Trade Unions is a collective bargaining association. The DGB has one of two collective agreements for the temporary employment sector in Germany. The second tariff is provided by the Association of German Temporary Employment Agencies (iGZ). These contracts set out basic provisions such as remuneration, working hours, overtime, notice period, continued employment and tax law.
Right of direction
A temporary worker is subject to the so-called right of direction in the client company, which is also known as the right to issue instructions. The right of direction determines the basic nature and form of the work content as well as the place and time of performance. However, the temporary worker is still bound to the temporary employment agency under labor and social law.
Disposition
The term disposition describes the bringing together and coordination between the hirer and the borrower. The aim of scheduling is to create the ideal workload for the temporary employment agency.
Triangular relationship
The triangular relationship describes the interaction between all temporary employment stakeholders. This includes the employee or temporary worker, the client company or the hirer and the temporary employment agency / lender. The temporary worker concludes an employment contract with the temporary employment agency that covers all relevant points of employment law. The hirer and the lender then conclude a temporary employment contract which sets out the assignment of the temporary worker to the client company. However, the temporary worker’s employer remains the temporary employment agency.
Use
Assignment means the work that a temporary worker performs for the hirer. As the term temporary work already defines, this is a temporary assignment.
Borrower
The hirer is one of the three parties to the triangular relationship. The hirer is the client of the temporary employment agency, the temporary employment agency. The hirer and the lender jointly conclude a temporary employment contract, which specifies the form in which a temporary worker is to work for the hirer within the framework of the temporary employment.
Equal Payment / Equal Treatment
In the temporary employment industry, the terms “equal payment” and “equal treatment” refer to the equal payment and treatment of temporary workers compared to permanent employees. This approach is usually difficult to implement in practice, as the two types of employee are based on completely different contracts. Vacation entitlements, profit sharing and other monetary salary components are a particular problem here. The German Temporary Employment Act (AGÜ) provides in principle for equal treatment of temporary workers, but this can only be enforced by the respective collective agreement.
Permit certificate
The license certificate documents that a personnel service provider is licensed to provide temporary workers on a commercial basis. The date and issuing authority are an integral part of the employment contracts and must be amended immediately in the event of changes. You can find the authorization certificate of rt Personal GmbH here(LINK).
First labor market
The regular labor market is referred to as the primary labor market. The counterpart to this is the second labor market, which refers to occupations that are not gainful or are remunerated with a reduced wage. Temporary work is regular employment and therefore an integral part of the primary labor market. Like all players in the primary labor market, the temporary employment sector does not benefit from any government support.
Skilled worker
A skilled worker is a qualified specialist who has learned a specific profession. The qualification as a skilled worker is documented in the form of a certificate (journeyman’s certificate, certificate of completion, skilled worker’s certificate, etc.). The ever-increasing shortage of skilled workers in Germany is boosting demand for temporary work. 63% of all temporary workers are qualified skilled workers, 30% are helpers and 7% are academics.
Association of German Temporary Employment Agencies (iGZ)
Alongside the DGB, the Association of German Temporary Employment Agencies (iGZ) is the second major employers’ association for temporary work. rt Personal GmbH is also a member of iGZ and concludes all contracts on the basis of the collective agreement negotiated here.
Adhesive effect
The bonding effect describes the takeover of a temporary worker by the hirer. Projections have shown that just under a third of all temporary workers benefit from the bonding effect. Based on their work, they are recruited by the hirer and permanently integrated into the company.
Leasing personnel
Leasing personnel is another term for temporary and agency workers.
Temporary work
Leiharbeit is another term for temporary work and originates from the earlier days of temporary employment. However, the term is still part of the AÜG, but is used comparatively less today.
Minimum wage
The collective agreements of iGZ and DGB also contain the basic principles on minimum working conditions. One of these conditions is the minimum wage. The minimum wage in the temporary employment sector is currently €9.00 in the West and €8.50 in the East. Depending on the temporary worker’s activity, various surcharges (night work, hazard surcharge, etc.), bonuses and commissions may be added.
Personnel services
Personnel services refers to all services within the scope of employee leasing, temporary employment, personnel placement and on-site management.
Personnel planner
The personnel planner is the link between the temporary worker and the hirer’s superior. The dispatcher manages and coordinates requests, work assignments and employment on behalf of the temporary employment agency. Personnel planners are part of the internal staff of a rental company.
Personnel placement
Recruitment describes the targeted placement of personnel with companies. Companies can forward vacancies to recruitment agencies so that they can find a suitable employee. Until August 1994, the Federal Employment Agency had a monopoly on job placement. After his case, numerous personnel service providers, including rt Personal GmbH, specialized in the placement of specialists and managers.
Qualified personnel
Qualified staff refers to employees who have a certain level of professional training and do not work as helpers. Almost 70% of all temporary workers fall into this category. Skilled workers, who are in high demand, make up the largest share.
Regular employees
Permanent employees are employees who are permanently employed by a hirer. The bonding effect ensures that a third of all temporary workers are integrated into the permanent workforce by the hirer.
Tariff opening clause
In Germany, the equal pay principle generally applies to temporary workers. This can only be deviated from if a collective agreement specifically concluded for temporary work is used. This option is called a tariff opening clause.
Collective agreement
All basic working conditions are set out in a collective agreement. This agreement was negotiated between iGZ and DGB for the temporary employment sector. The collective agreement regulates, for example, the basic provisions for pay, working hours, overtime, notice period, continued employment and tax law.
Transfer period
The assignment period determines how long a temporary employee works for the hirer. The duration is defined in the temporary employment contract between the temporary employment agency and the client company. Until 2003, the maximum limit was 24 months, but has since been completely abolished. Theoretically, this means that temporary workers can work for the hirer for an indefinite period.
Transfer agreement
The temporary employment contract is concluded between the temporary employment agency and the hirer and is the contractual basis for the supply of temporary workers. The contract is an integral part of the triangular relationship between the temporary worker, the hirer and the lender.
Lender
The temporary employment agency is a synonym for the term temporary employment agency.
Clearing rate
The billing rate is the remuneration paid by the hirer to the temporary employment agency for the deployment of a temporary worker.
Right to issue instructions
A temporary worker is subject to the so-called right to issue instructions to a hirer, also known as the right to issue instructions. The right to issue instructions defines the basic content of the work to be performed, as well as the place and time of performance. However, the temporary worker is still bound to the temporary employment agency under labor and social law.
Temporary work
Temporary work or temporary employment is when an employee (temporary worker) is hired out by an employer (lender) to a third party (hirer) for a limited period of time in return for payment. The temporary employment agency assumes the rights and obligations of the employer.
Temporary employees
The employees of a temporary employment agency who are transferred to other companies to work there are also called temporary workers. They are also referred to as external personnel.
Temporary employment agency
A temporary employment agency is a company that is permitted to provide temporary workers on a commercial basis. Its core business is hiring out workers to external companies for a limited period of time.