AUG is the German employment agencies law that requires each separately incorporated entity that wishes to lease employees to obtain an AUG license from the appropriate state labor office. Licenses are valid for one year and may be renewed. Many German end user hirers will only contract with foreign agencies that are in possession of an AUG license. However, the provision of independent contractors falls outside the scope of the AUG and a number of foreign staffing firms focus on this area of provision in order to avoid the licensing requirements. Failure to follow the licensing rules correctly exposes the agency to fines and criminal proceedings while end users will find that an employee who works for an unlicensed agency, and not as a true independent contractor, will be deemed to be the hirer’s employee at the point in time they started to work for the hirer.