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Germany – Over 3,000 investigations launched in illicit temp pay scheme

24 September 2012

After the Federal Labour Court (BAG) clarified in May this year that the illicit bargaining agreement created by the former Christian Unions (CGZP) had always lacked bargaining capacity, an update on the legal process has been published.

Thousands of staffing firms had signed up to the now void agreement, underpaying temporary workers, and also making lower social security contributions. Many, mainly smaller staffing firms, are now under investigation to determine outstanding social security payments.

Following an inquiry by the green party, Bündnis 90/Die Grüne, the German Government said that 3,200 investigations had been launched among employers. By the end of July, 1,700 of those had been concluded while 1,000 demands for payment have been issued so far.

Contribution claims have been calculated to have reached over €69 million, out of which €23 million have been paid for. The remaining amount has not been received yet.

Health insurances are responsible for claiming back the outstanding pay from staffing firms. The government said that appealing to the demands of payment would not have a suspensive effect, meaning that the decision cannot be suspended and is final.   

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