Proposed changes to international contractor rules by the German government have come under fire from the British Embassy in Germany and the Association of Professional Staffing Companies (APSCo).

Under the changes, all freelance contracting professionals who have worked on a project for over 18 months will be re-designated as employees of the end client.

Initially, it was not obvious how harmful the effects of the proposed changes to the Labour Leasing Act would be on professionals − such as UK Umbrella Company Employees − pursuing contracting opportunities in Germany, nor on the recruitment companies that placed them. However, APSCo’s meticulous examination of the amendments reveals that they would have a direct and very damaging impact on both.

New restrictions will be imposed on a licence − the Arbeitnehmerüberlassungsgesetz or AüG, which permits German companies to ‘lease’ temporary labour − under the new amendments. The reforms widen the definition of the German employment relationship, compulsorily converting UK freelancers and contractors into ‘employees’ of the end client if their project lasts for more than 18 months.

APSCo Germany Managing Director Tremayne Elson described the proposals as “a backwards step for all forms of flexible working”.

APSCo’s Head of External Relations Samantha Hurley said: “These reforms will be detrimental not only to UK recruitment agencies placing contractors within Germany, but also to the growth of the German economy. It is clear that these proposals were made with inadequate consultation and little consideration of the potential implications for overseas contractors.”

Ms Hurley added that APSCo was “incredibly pleased” that its lobbying of the German government would be supported by both the British Embassy and recruitment giant Hays.

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