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Employment Agency or Job Placement Agency


Definition, Explanation

Since the government has annulled their exclusive right to place jobseekers, now besides the Federal Labour Agency also private placement agents can support jobseekers and apprenticeship seekers.

Prerequisites for working as an employment agency:

  • Trade-register the agency
  • Comply with regulations contained in acts on abroad placement, placement contract and other regulations of the Social Code, Sozialgesetzbuch Drittes Buch (SGB III). Control is exercised by the labour agency. Violations are punished with penalty fees
  • Comply with secrecy laws. In particular, you are only to collect, process and use data that are required for the placing. Application documents must be returned to the client after the end of the placing activity, personal data must be deleted after 3 years

Tasks of an employment agency include:

  • Profiling and tests determining abilities, strengths and interests
  • Search for a suitable job
  • free job ad take out
  • Placing into a full time or temp work job
  • Support in making up application documents
  • Preparing for assessment centers
  • Training of job interviews
  • Potentially education for making good some deficiencies

Employing a job placement agency requires:

  • a written contract between the jobseeker and the employment agency
  • regulation of the remuneration: costs are paid by the jobseeker, or by a placement coupon granted by the labour agency. For apprentices, the employer takes over the costs
  • a maximum limit on the remuneration, that is for jobseekers maximum 2,000 Euros incl. VAT (exceptions: artists, photo models, sports professionals), for au-pair relations maximum 150 Euros
  • What is not allowed, and makes the contract invalid is:
    • Agreeing an advance payment
    • additional charges for services that are already included in the placing activity by definition
    • employment of the placement agency without a written contract
    • a contract clause restricting employment placement activity to a single employment placement agent
    • exceeding the maximum limits
    • a contract that has not been handed out to the jobseeker

As stated briefly above, the payment of the private employment agency can be done via a placement coupon, instead of the jobseeker himself paying. The placement coupon is obtained from the labour agency on application. As soon as the jobseeker has been working in a job he was placed in, for 6 weeks, the employment placement agency can encash the coupon at the labour agency. At this point in time, he will be given half of the money, 1,000 Euros, while the second half is paid when the employment relationship has lasted for 6 months.

Successful placement is defined such that

  • the jobseeker has been placed into a job with obligatory social insurance contributions with at least 15 weekly working hours. It may be temporary work
  • In case the agent is paid via a placement coupon, the placement has been finished within three weeks after the coupon has been granted

The work of private employment placement agency is to be distinguished from that of personnel counsellors and head hunters. The latter are strictly paid by the employer who is looking for an employee. On behalf of the company. They look for special expert and executive personnel that are hard to find on the job market otherwise.

Tips, Checklist

  • Get contacts of private employment placement agencies from the labour agency, and look for more on the web, in the yellow pages, or through contacts with other jobseekers
  • Look for an employment placement agency specialized in your branch, or your desired job
  • Turn to several agencies
  • Ask for their success rates and if possible inform yourself via other people about their experience with certain agencies
  • Do not sign contracts that restrict you to employ one single employment placement agency
  • Employment placement agents’ work is usually performance directed. Therefore, never pay anything in advance, like registration fees or anything similar
  • If you are in an agency where you feel unwell, misunderstood, or poorly serviced, change to another agency. This is the kind of service for which trust is important, and the certainty of being in good hands
  • As a jobseeker, use the placement coupon by the labour agency that you can obtain as soon as you have been unemployed for 6 weeks
  • Use the complementary services of the agencies such as profiling and support with your applications
  • Important: You only have to pay if the placement efforts of the private employment placement agent result in getting you into an employment contract

Information Sources



Last update: 01/09/2010
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