- Time limits in 4 countries: Germany, Japan, Poland and South Korea. Germany allows 18 consecutive months, Japan 3 years, South Korea up to 2 years and Poland 18 months within 36.
- Bans with narrow exceptions in 7: Belgium, France, Mexico, Norway, Philippines, Spain and Switzerland.
- A licence for the provider in 8: Australia, Austria, Germany, Italy, Japan, Netherlands, South Korea and Switzerland.
- Consequences fall on the client too. In several countries, using an unlicensed provider or exceeding a limit can make the worker your own employee, or make your company jointly liable.
With an Employer of Record, the provider is the legal employer, but the worker does their job for your company and takes instructions from you. Labour-hire and staff-leasing laws were written for exactly that three-way arrangement: one company employs, another directs the work.
Whether an arrangement counts usually depends on how it works in practice, not what the contract calls it. Austria's Labour Leasing Act, for example, looks at the real economic substance. Some providers hold the relevant licence; others structure their service to fall outside the rules. That is why the most useful question to ask any provider is how its model complies in your country.
| Country | Type of rule | What it means for an EOR | If the rules are broken |
|---|---|---|---|
| Australia | Licence (some states) | Labour hire providers need a licence in Queensland, Victoria, South Australia and the ACT. In Queensland, South Australia and the ACT, businesses may only use a licensed provider. | South Australia: up to A$400,000 for a company that uses an unlicensed provider; ACT: a civil penalty of up to 3,000 penalty units |
| Austria | Licence | An EOR is usually labour leasing (Arbeitskräfteüberlassung), a regulated trade; the worker is entitled to locally customary pay. | For long assignments, the client can become responsible for a defined-benefit company pension after four years |
| Belgium | Ban, narrow exceptions | Lending staff with a transfer of employer authority is banned, except through regionally licensed temporary agencies for six set reasons, each with a maximum duration. | See the Belgium guide |
| France | Ban, narrow exceptions | Lending staff for profit and marchandage are prohibited, except through temporary work agencies (set reasons and durations) or portage salarial. | See the France guide |
| Germany | Licence and time limit | An EOR is usually employee leasing under the AÜG: the provider needs a licence, and the same worker can generally work for the same client for no more than 18 consecutive months. | Contracts void and the worker deemed your employee; fines of up to €30,000 |
| Italy | Licence | Supplying workers to another business is lawful only through authorised agencies (somministrazione di lavoro). | Without a written supply contract the workers count as the client's employees |
| Japan | Licence and time limit | An EOR is usually worker dispatch: the provider needs a licence, and there are two 3-year limits (same work at a site, and the same worker in the same unit). | The client is deemed to have offered the worker a direct contract |
| Mexico | Ban, narrow exceptions | Since the April 2021 reform, supplying personnel to another company is prohibited in general; only specialised services outside the client's core business, by REPSE-registered providers, may be subcontracted. | The client can be jointly liable if the provider is non-compliant |
| Netherlands | Licence (from 2027) | Under the Wtta, labour suppliers need official admission from 1 January 2027, and hirers may only use admitted suppliers. | From 2028, hirers using an unadmitted supplier can be fined |
| Norway | Ban, narrow exceptions | Businesses may hire in workers from staffing agencies only through approved agencies and in set cases, such as covering temporary absence or a defined specialist project. | The worker can claim permanent employment and damages; the Labour Inspection Authority can impose fines |
| Philippines | Ban, narrow exceptions | Labour-only contracting, where a contractor merely supplies workers, is prohibited; legitimate contracting is regulated by DOLE. | The client can be treated as the direct employer and become jointly liable |
| Poland | Time limit | Where the provider operates as a registered temporary work agency, the same worker can generally work for the same user for at most 18 months within 36. | See the Poland guide |
| South Korea | Licence and time limit | Worker dispatch needs a licence and is allowed only for listed jobs (never direct production in manufacturing), for one year, extendable to two. | The client must employ the worker directly, unless the worker objects |
| Spain | Ban, narrow exceptions | Placing workers at another company's disposal is restricted to licensed temporary work agencies (ETT); article 43 of the Workers' Statute prohibits illegal transfers (cesión ilegal). | Joint liability, and the employee's right to become a permanent employee of either company |
| Switzerland | Licence and ban from abroad | Staff leasing needs a cantonal licence, and leasing workers from abroad into Switzerland is not permitted. | See the Switzerland guide |
| Country | Limit | Can it be extended or avoided? |
|---|---|---|
| Germany | 18 consecutive months, same worker and client | A collective agreement in the client's sector can set a different limit. Switching provider doesn't reset the clock unless there's a break of more than three months. |
| Japan | 3 years for the same work at a site; 3 years for the same worker in the same unit | The site limit can be extended after consulting the majority union or employee representative. The limits don't apply to workers on open-ended contracts with the provider. |
| South Korea | 1 year, extendable to 2 years in total | Longer for older workers. Only for jobs listed by Presidential Decree. |
| Poland | 18 months within any 36 months | Applies where the provider operates as a temporary work agency; providers structure this differently. |
- Does this arrangement count as labour hire, staff leasing or worker dispatch in this country, and how does your model comply?
- Which licence or registration do you hold here (for example an AÜG licence in Germany, a dispatch licence in Japan or South Korea, REPSE in Mexico, Wtta admission in the Netherlands)? Can we see it?
- Is there a time limit for the same worker, and what happens as it approaches?
- Who is liable if the arrangement is found to breach these rules: you, us, or both?
- If we later set up our own entity, can the employee transfer, and on what terms?
Where a time limit applies, or the role is long-term or core to your business, these rules often decide the question of your own local entity before cost does. See EOR vs local entity and, for a worked German example, foreign subsidiary vs EOR.
Is an Employer of Record a form of labour hire?
Is an EOR legal in Germany?
Which countries limit how long you can use an EOR?
Can my company be liable if the EOR breaks these rules?
Do EOR labour-hire rules apply in Australia?
- 1Australia: Labour hire licensing
Queensland Government
Who needs a Queensland labour hire licence, what isn't labour hire, and exempt workers including the A$190,100 high income exemption (from 1 July 2026).
- 2Australia: Labour hire law changes 2026
Labour Hire Authority (Victoria)
Victorian licensing requirements, the stronger obligations from 1 June 2026 and maximum penalties (over A$660,000 for a company).
- 3Australia: Labour Hire Licensing Act 2017 (SA)
South Australian Legislation
Version of 29 January 2026: meaning of labour hire services (s 7), licence required (s 11), no arrangements with unlicensed providers (s 12); maximum penalties A$400,000 for a body corporate.
- 4Australia: Labour Hire Licensing Act 2020 (ACT), A2020-21
ACT Legislation Register
Republication 6, effective 26 December 2025: meaning of labour hire services (s 7), licence required (s 23), no arrangements with unlicensed providers, civil penalty up to 3,000 penalty units for a corporation (s 35).
- 5Austria: Arbeitskräfteüberlassungsgesetz (AÜG) and labour leasing licensing
RIS (Bundeskanzleramt) / Unternehmensserviceportal
Definitions (§ 3), substance over form (§ 4) and pay of leased workers (§ 10); labour leasing as a regulated trade requiring proof of qualification (USP).
- 6Belgium: Mise à disposition de travailleurs
FPS Employment, Labour and Social Dialogue
The ban on lending staff with a transfer of employer authority, its exceptions (including Article 32) and the consequences of illegal lending.
- 7Belgium: Travail intérimaire
FPS Employment, Labour and Social Dialogue
Regional licensing of agencies, the six permitted reasons, the triangular relationship and equal pay with the user's permanent staff.
- 8France: Labour Code (Code du travail)
Légifrance
Current text of arts. L8241-1 (staff lending), L1221-2, L1242-8 and L1242-8-1 (CDI and CDD), L1221-19 and L1221-21 (probation), L3121-27 (35-hour week), L3141-3 (paid leave), L1234-1 (notice), L1232-1, L1234-9 and R1234-2 (dismissal and severance).
- 9Germany: Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG)
Federal Ministry of Justice (gesetze-im-internet.de)
§ 1(1): leasing requires a licence; § 1(1b): no more than 18 consecutive months with the same client; § 8: equal pay from the start, which a collective agreement may defer for the first nine months.
- 10Germany: Employee leasing licence (Arbeitnehmerüberlassung)
Bundesagentur für Arbeit
The authority that issues and supervises AÜG licences.
- 11Italy: D.Lgs. 81/2015 (employment contracts and labour supply)
Normattiva
Fixed-term contracts (art. 19, text in force from 28 June 2026), labour supply by authorised agencies (art. 30) and irregular supply (art. 38).
- 12Japan: Act on Ensuring the Proper Operation of Worker Dispatching Services and Protecting Dispatched Workers (Act No. 88 of 1985)
Japanese Law Translation (Ministry of Justice)
Article 5 (licence), Articles 35-3, 40-2 and 40-3 (3-year limits), Article 40-5 (vacancy information) and Article 40-6 (deemed offer). Translation of the version as amended by Act No. 58 of 2021.
- 13Mexico: Federal Labour Law (Ley Federal del Trabajo)
Cámara de Diputados
Consolidated text, last reform DOF 14-05-2026: subcontracting (arts. 12–15), written conditions and contract duration (arts. 24, 35, 37), probation (art. 39-A), dismissal and compensation (arts. 47–50), working time, vacation, aguinaldo, PTU (art. 127) and seniority premium (art. 162).
- 14Mexico: Registry of Specialised Services (REPSE)
Secretaría del Trabajo y Previsión Social (STPS)
Registration and search for specialised service providers.
- 15Netherlands: Wtta: new law on labour suppliers (from 1 January 2027), and Waadi art. 7a
Rijksoverheid / wetten.overheid.nl
Wtta in force 1 January 2027, enforcement from 1 January 2028. Waadi art. 7a (https://wetten.overheid.nl/BWBR0009616/) bans supplying workers without trade-register registration.
- 16Norway: Innleie fra bemanningsforetak
Arbeidstilsynet
Approved agencies only; permitted cases (temporary absence, traineeships, sport, agreement with union representatives, specialist advisory work in defined projects, healthcare); consequences of illegal hiring-in.
- 17Philippines: Labor Code of the Philippines (renumbered, 2022 edition)
Department of Labor and Employment (DOLE)
Arts. 83, 87, 93 (hours, overtime, rest days), 95 (service incentive leave), 106 (contracting), 292(b), 294, 296–298 (probation and termination).
- 18Philippines: Department Order 174, series of 2017: Rules implementing Articles 106 to 109 of the Labor Code
Department of Labor and Employment (DOLE)
Prohibition of labour-only contracting, PHP 5 million substantial capital, mandatory registration of contractors.
- 19Poland: Act on the Employment of Temporary Workers
Internetowy System Aktów Prawnych (ISAP)
Art. 20: the same temporary worker may work for the same user employer for at most 18 months within 36 consecutive months.
- 20South Korea: 파견근로자 보호 등에 관한 법률 (Act on the Protection of Temporary Agency Workers)
Ministry of Government Legislation (law.go.kr)
Permitted jobs (art. 5), dispatch periods (art. 6), direct employment obligation (art. 6-2), licensing (art. 7) and equal treatment (art. 21).
- 21Spain: Workers' Statute (Estatuto de los Trabajadores), consolidated text
Boletín Oficial del Estado (BOE)
Arts. 8.3 (contract notification), 14 (probation), 15 (fixed-term contracts), 31 (extra payments), 34 (working time and time recording), 37.2 (public holidays), 38 (annual leave), 43 (worker transfer), 48.4 (birth leave), 49.1.d (resignation), 52–54 and 56 (dismissal). Consolidated text updated 3 October 2026.
- 22Switzerland: Arbeitsvermittlungsgesetz (AVG), SR 823.11
Fedlex (Swiss federal law)
Staff leasing: cantonal licence and ban on leasing from abroad (art. 12), conditions (art. 13), deposit (art. 14), written employment and leasing contracts (arts. 19, 22). Stand am 1. Januar 2026.