Intercompany Assignment Agreement Template for Germany

An Intercompany Assignment Agreement is a specialized employment contract that governs the temporary transfer of employees between related companies within a corporate group operating in Germany. This document ensures legal compliance while protecting the interests of all parties involved in the assignment process.

When do you need this document?

You need an Intercompany Assignment Agreement when transferring employees between group companies for various business purposes. Common scenarios include deploying technical specialists to implement new systems, sending experienced managers to oversee operations, transferring employees for skills development or career advancement, or providing expertise during mergers and acquisitions. The agreement is also essential when establishing new German operations that require experienced personnel from other group entities, or when fulfilling specific client requirements that demand particular expertise not available locally.

Key legal considerations

Several critical legal elements must be addressed in your agreement. Employment status clarification is paramount, as the document must specify whether the employee remains employed by the home company or transfers to the host company. Remuneration and benefits arrangements require detailed specification, including salary continuation, allowances, and social security coverage. Data protection compliance under the Federal Data Protection Act (BDSG) is mandatory when transferring employee information between companies. The agreement must also address intellectual property rights, confidentiality obligations, and liability allocation between the assignor and assignee companies. Additionally, you must consider tax implications and ensure proper documentation for both German and foreign tax authorities.

Legal requirements in Germany

German law imposes specific obligations that your agreement must address. Under the Employee Posting Act (AEntG), you must notify relevant authorities about the assignment and ensure compliance with minimum working conditions. The Works Constitution Act (BetrVG) requires consultation with works councils when applicable, particularly regarding assignment terms and employee protection measures. Social Security Code (SGB) provisions must be considered to maintain continuous insurance coverage throughout the assignment period. The German Civil Code (BGB) governs fundamental contractual obligations and employee rights protection. Your agreement must also comply with income tax regulations, ensuring proper withholding and reporting procedures. Additionally, the document should address mandatory German language requirements for certain positions and industries, workplace safety regulations, and potential collective bargaining agreement obligations that may apply to the assigned employee.