The shortage of skilled workers is one of the dominant topics in politics and business. The debate revolves almost exclusively around qualified immigration—as if this were the only solution. But what if there were already a practical alternative to help German companies attract skilled professionals? This very possibility exists—but is now being severely restricted by regulatory measures.
Skilled Labor Shortage? But with Extra Hurdles?
Germany suffers from a shortage of skilled workers, but not necessarily in academic fields. The real bottleneck is in professions that require physical presence, particularly in skilled trades, healthcare, and the service sector. At the same time, there are many qualified professionals who could easily work remotely from abroad.
Many companies have already recognized that not every position needs to be filled with domestic professionals—especially not for digital or knowledge-based jobs. So why not simply look for experts where they already are?
This is where the Employer of Record (EoR) model comes into play.
Employer of Record (EoR): A Proven Solution
With the EoR model, companies can hire highly qualified professionals internationally without having to establish their own foreign subsidiaries. An external provider takes care of the following tasks:
- Hiring the professional in the respective country
- Managing payroll, social security contributions, and taxes
- Ensuring compliance with all local labor laws
- Reducing administrative hurdles for the company
This model is not only flexible and business-friendly but also a direct and effective response to Germany’s skilled labor shortage. Companies can access global talent without having to go through the complex processes of German labor market regulations. But this very option is now set to become more difficult due to new regulations from the German Federal Employment Agency (Bundesagentur für Arbeit, BA).
The Federal Employment Agency is Making Modern Work Models More Difficult
The BA plans to introduce stricter reviews for companies employing remote professionals via the EoR model. The goal is to determine whether these professionals fall under the Temporary Employment Act (AÜG). In practice, this could mean:
Companies must meet new bureaucratic requirements that previously only applied to traditional temporary employment.
EoR providers could be classified as labor leasing agencies, unnecessarily complicating the employment of foreign professionals.
In some cases, companies could face fines or be forced into a fictitious direct employment relationship with the professional.
A major issue: The legal basis for this classification is disputed.
According to Human Resources Manager there are significant doubts about whether the BA’s stance is legally sound. Until the courts clarify the situation, companies must prepare for new review procedures.
Why This is a Major Problem
While businesses urgently need more skilled professionals, an existing and functioning alternative is being rendered practically useless.
- Companies may be forced to either endure lengthy and costly processes or forgo urgently needed talent.
- Instead of being able to access global talent, German businesses are being restricted by additional regulations.
- This policy prevents companies from adapting flexibly to the reality of an international labor market.
Right now, a business-friendly approach that offers more flexibility instead of more bureaucracy is needed.
Conclusion: Politics Should Act More Business-Friendly
The current developments show that policymakers continue to rely on rigid, traditional labor models while businesses have long been operating internationally. Instead of making solutions like the EoR model more difficult, policymakers should create a legal framework that allows companies to employ skilled professionals flexibly.
Companies should now carefully examine whether their international employment models might be affected by the new regulations. Until the legal situation is clarified, it is advisable to have all contracts and structures legally reviewed to avoid potential complications.
Notfaroff: Your Legally Compliant Partner for Outsourcing in Construction Planning
With Notfaroff, companies can engage highly qualified professionals abroad for their projects—without legal risks or complicated approval procedures. Our outsourcing solution ensures that you can flexibly and efficiently access international experts while we handle all administrative processing.
- 100% legally compliant – no labor law uncertainties
- No administrative burden – we manage contracts & payroll
- Maximum flexibility – qualified professionals on demand
Want to learn how outsourcing can make your company more efficient?
Contact us – we are happy to advise you!
