Contractors working in Germany could be affected by new caps

Reforms to the labour laws in Germany could mean that contractors from the UK will be affected as they introduce caps which have been described as a ‘leap backwards’ by experts. With an estimated 180 local contractors being affected, the reforms that have been put in place have come in for some criticism, not least from Tremayne Elson, German managing director of the Association of Professional Staffing Companies.

Germany’s chancellor, Angela Merkel, has pledged to put the proposed reforms into place as soon as possible, meaning that there will be a cap placed on ‘Arbeitnehmerüberlassungsgesetz’ (AüG) license that allows German companies to hire temporary labour, including contractors from the UK.

Currently, there are no restrictions on the length of time for which a contractor can work under an AüG licence, but under the planned legislation, contractors will be classed as employees after eighteen months.

This legislation is set to come into place in January 2017, and would mean that contractors automatically become employees of their end-users, and if they want to remain as freelancers they would need to find an alternative contract. APSCo have joined forces with recruiters Hays and SThree to try and fight these plans and the damage that they believe will be done to the German economy should the move go ahead unchallenged.

This means good news in the short term for contractors whose skills are in demand in Germany as many businesses will be aiming to complete projects before the cap comes into effect. Supporters of the proposals are welcoming the move, representing as it does a level of protection for workers who would otherwise potentially be exploited on the international labour market. They believe that it will put a stop to sham contracts which leave vulnerable low-paid workers without employment rights.

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