External Personnel Compliance Check
External Personnel Compliance Check
Engaging third parties is a common business practice. Whenever third parties are assigned tasks that are closely connected with the organisation or fall within the company’s operational processes, this is referred to as the engagement of external personnel. This entails a wide range of risks.
With the reform of the Temporary Agency Work Act (Arbeitnehmerüberlassungsgesetz – AÜG) in 2017, the legislature significantly tightened the legal requirements for engaging third parties. The focus was not only on preventing illegal temporary agency work, but also on combating bogus self‑employment. Numerous court decisions, including the Federal Labour Court’s “Crowdworker” decision (judgment of 1 December 2020, case no. 9 AZR 102/20), the Federal Social Court’s “Herrenberg” judgment (judgment of 28 June 2022, case no. B 12 R 3/20 R), and legislative amendments such as the changes to the social security status determination procedure with effect from 1 April 2022, make the engagement of external personnel an ongoing challenge for companies. When engaging digital platform workers, the requirements under the European Platform Work Directive (Directive (EU) 2024/2831) must also be taken into account.
If illegal temporary agency work occurs or bogus self‑employed persons are engaged, companies face considerable compliance risks. In the course of audits, in particular social security audits, substantial retroactive social security contributions, late payment surcharges, and administrative fines of up to EUR 500,000 may be imposed. In addition, company decision‑makers may incur criminal liability. Regardless of this, case law also holds that where the contractual arrangement is impermissible, liability claims against the third party for defective performance are excluded.
With our External Personnel Compliance Check, you can carry out a digital review of the intended engagement of external personnel in just a few minutes. A traffic‑light system is available to visualise the risks. In addition, you will receive a short‑form summary for further use.
If you have any questions, please contact our points of contact, Isabel Hexel and Marko Vraetz.
Explore our External Personnel Compliance Check!
