Is there a time limit on employing someone through an EOR in Germany?

Last updated: 20 October 2026

In short

Where the EOR model is temporary agency work, yes: the same worker can be placed with the same company for at most 18 consecutive months, and in general only a gap of more than three months resets the count.

Changing provider does not by itself reset it, because earlier time with the same company generally counts in full whoever the provider was. The rule is section 1(1b) of the Arbeitnehmerüberlassungsgesetz (AÜG), Germany’s Act on temporary agency work. A collective agreement of the sector can set a different maximum.

Want the story of a team that found this out late? Read the Germany case file.

This page reads the statute itself: how long a German placement can last, what counts, and what happens at the limit.

When does the German time limit apply to an EOR arrangement?

Usually when the arrangement amounts to temporary agency work, which German law calls Arbeitnehmerüberlassung.

The Act describes it as one employer lending its own employee to another company. A worker is placed with a client when they are part of the client’s organisation and follow its instructions (section 1(1)). The company that places the worker needs a permit, called an Erlaubnis, from the Federal Employment Agency before the first placement. Without that permit the contracts are not valid under section 9(1), unless the worker declares in writing that they stay with the provider. The contract between provider and client must also say expressly that it is agency work, and name the worker (section 1(1)).

Whether a given EOR arrangement counts depends on how it is built and how the person works day to day. A worker who is employed directly by your own German company is generally not placed with you, so the limit usually does not apply to that employment. The Act also has exceptions for some placements, such as between group companies where the worker was not hired to be placed (section 1(3)).

How does the 18-month limit count?

Per worker and per client company, in consecutive months. The Act addresses both the provider and the client.

Say a worker has spent 22 months with the same company across two providers, with no gap of more than three months between them. Where the Act applies, the 22 months can all count and the 18-month limit may well have been passed, unless a collective agreement sets a longer one. This is an illustration, not a real case.

Does changing provider reset the clock?

Generally not. The count follows the worker and the client, not the provider.

The Act counts earlier placements “by the same or another provider” with the same client. The Federal Employment Agency’s own leaflet for agency workers (July 2026 edition) says the same in plain words. That is why a worker who moves between providers can reach the limit without any single provider seeing it. Each provider only sees its own slice of the history.

Does a break in the engagement reset the clock?

In general, only a gap of more than three months does.

Section 1(1b) speaks only of the length of the gap, so a shorter pause will usually leave the earlier time counting. Whether a pause arranged to restart the count would be respected, with the same person returning to the same role, is a question for a German employment lawyer on the facts.

What happens when the limit is passed?

In some situations the worker’s contract with the provider stops being valid, and the law can treat the worker as employed by the client from that moment.

Under section 9(1) of the Act, the employment contract between the provider and the worker can become void once the permitted maximum is exceeded. Section 10(1) then provides for an employment relationship to arise between the client and the worker. Its terms often follow the client’s workplace rules, and the pay is at least what was agreed with the provider.

The worker may be able to choose to stay with the provider. They must declare that in writing within one month of the limit being passed. The declaration only counts if the worker first shows it in person at an Agentur für Arbeit, which dates it and records that it checked their identity. It must then reach the provider or the client within three days of being shown (section 9(2)). A declaration made before the period starts is void, and one made while the placement simply carries on does not save it (section 9(3)).

The authorities can also fine the provider. The Act sets a fine of up to EUR 30,000 for placing a worker beyond the maximum (section 16(1), no. 1e, and section 16(2)). The figure holds for that offence only. Other breaches of the Act carry other amounts.

Why can some EOR contracts in Germany read as temporary?

Because a provider that treats its German placements as agency work may cap each engagement at a fixed period.

That is often a commercial choice rather than something section 1(1b) requires. The Act caps placement with one client, not employment as such. So a fixed-term contract is not necessarily a consequence of the 18 months, and a German hire does not always have to be on a short contract.

Before you sign, ask any provider five things in writing. How a provider is built differs, and only its answers tell you.

1. Does it treat its German placements as temporary agency work, and does it hold the permit?
2. Who counts the months, and does the count include time under earlier providers?
3. What is the term of the employment contract, and what does it say about month 18?
4. Which route does it use when the limit approaches, and who pays for it?
5. What does your service agreement say if the limit is passed?

How do you avoid the limit?

If your arrangement is agency work, there are usually three routes to stay inside the rule. Each has a trade-off.

If the arrangement is agency work and you need the person for more than 18 months, it often makes sense to plan direct employment or your own entity from the start. If you need them for less, count the months and write the end date down.

• Direct employment by your own foreign company. The person is your employee, so in the usual case nobody places them with you. A company with its seat abroad needs an employer number, called a Betriebsnummer, from the Federal Employment Agency when it has employees to report to German social insurance, per the Agency’s explanatory notes. Registration is wider than that single step, and direct employment can create a permanent establishment. Read foreign employer registration and the Germany permanent establishment guide first.
• Your own German entity. The entity employs the person, so the Act usually does not apply to that employment. The guide to moving from an EOR to your own entity covers timing, the entity setup guide covers the steps, and the Germany first-hire guide shows how the clock is planned from day one.
• Ending the placement before month 18. Plan the end before month 18, and check what the employment contract says about what happens next. The Germany termination guide sets out the rules for ending German employment.

If you are hiring in Germany and want the structure checked against these rules before you sign, Teamed gives you real HR and legal experts assigned within 24 hours and a designated person who manages your account. How the rules apply depends on how your hire works each day, so talk to an expert about yours.

Frequently asked questions

Does the 18 months run from the day the worker was hired?

Generally not. It runs from the start of the placement with that client, and only placement time from 1 April 2017 counts. A worker hired years ago by a provider has no clock until they are placed with you.

Who has to keep count, the provider or the client?

Both. Section 1(1b) forbids the provider to place the worker beyond the maximum and forbids the client to let them work beyond it. The consequence in section 10 can fall on the client too, so it is sensible to keep your own record of the months.

Does changing role at the same client reset the count?

The Act counts placements with the same client company, and says nothing about the role. A new job title at the same client usually does not by itself start a new count.

Can the worker keep the provider contract after the limit?

In general only by the written declaration described above, made in the one-month window and shown at an Agentur für Arbeit first. A declaration does not necessarily make a continued placement lawful.

Does the limit apply to a person employed by my own German entity?

Usually not. Temporary agency work means one employer lending its employee to another. A person employed by your own entity is generally not lent to you.