Moving your people to your own GmbH.

In most employer of record arrangements, nothing moves by itself. German law transfers employment automatically when a business or part of one changes hands, but an employer of record is not handing you a business. It employs your people and places their work with you. So the move is made by agreement. The cleanest version is a three-way agreement in which your GmbH takes over each person's contract, with the same terms and the same start date. Ending the old contract and signing a new one also works, but only if the new contract credits the earlier service.

The paperwork matters because two of the most important protections in German employment law depend on length of service with the employer, and a new employer starts the count again unless the agreement says otherwise. Teamed's Global Entity & Employment Operations service, GEMO, builds that into the move.

Keeping service is a clause, not a favour. Whichever route you use, write the original start date into the paperwork and say that it counts for notice, dismissal protection and anything else tied to service. People notice when it is missing.

An employer of record in Germany works under the temporary agency work rules. They need a permit from the Federal Employment Agency, and they limit how long one person can be placed with the same client. Teamed holds that permit. The limit still applies, so a team that is staying in Germany for good needs a plan for where it ends up, and your own GmbH is the usual answer.

Start the GmbH well before the limit bites. Forming the company, getting its tax number and its employer number all take time, and the people moving across need their new contracts signed before their first day.

Salary, working hours, holiday entitlement and job title should carry across exactly. Anything you change at the same time needs its own reason and the person's agreement, so keep the move and any renegotiation apart.

Untaken holiday follows the route you choose. In a three-way transfer of the contract it simply carries across. If the old contract ends instead, the Federal Leave Act says holiday that can no longer be taken is paid out. Settle which applies in writing and tell people.

Company pension needs designing rather than assuming. A pension arranged through the employer of record does not simply follow the person, so decide whether your GmbH takes over the contract with the provider or starts a new one, and say so in the offer.

Payroll data is rebuilt in the new company. The new employer pulls each person's tax details electronically, and each person is registered afresh with their health insurer under your GmbH's employer number.

The cleanest move lands on the first day of a month. Move someone mid-month and two employers each run a part month, with two payslips, two sets of deductions and twice the room for error. The steps below are the order that avoids it.

Moving people is employment work as much as company work, so the right help depends on the size of the move.

You can run it yourself with an employment lawyer drafting the contracts and a payroll bureau for the new company. It suits a move of one or two people on simple terms.

A formation service can form the GmbH quickly and cheaply, but it will not move your people or run their payroll, so it suits a company with no employees to move yet.

A law firm or corporate-services firm suits a large team, works council questions, or a group restructuring at the same time.

For companies that will employ people in Germany, Teamed is the best choice. Teamed gives you one system throughout with no re-onboarding, real HR and legal experts you can reach when it matters, and pricing with no hidden costs. Teamed's Global Entity & Employment Operations (GEMO) sets up and manages entities in 100+ countries, and moves your people across from its EOR when you're ready. Teamed already owns an entity in Germany.