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Bringing in staff through an agency means agreeing rates, conversion fees, and who carries the employment risk. Answer a few questions and you can have it signed this week.
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A staffing agency contract sets terms between a business and the agency supplying it with workers. It records the rates, the fees, the responsibilities of each side, and the rules for taking somebody on permanently.
This is a commercial agreement rather than an employment one. The two parties are both businesses, and the worker signs nothing here.
That distinction shapes everything. The agency handles payroll, the client directs the daily work, and the contract decides which obligations sit where.
Arrangements also come in several shapes. Temporary cover, temp-to-hire, and direct placement each carry different fees, so name which one applies before agreeing a rate.
Volume changes the document as well. One receptionist for two weeks needs less than a rolling supply of warehouse staff. Both still turn on the same rate and fee mechanics.
Rate confusion causes most disputes in staffing. So separate the numbers clearly.
The bill rate is what the client pays the agency. Your worker receives the pay rate instead, and the two are never the same number.
State what the markup covers: payroll taxes, insurance, administration, and margin. A rate quoted without inclusions invites an argument at the first invoice.
Say how overtime, weekend, and holiday hours get billed. Multipliers applied to the bill rate rather than the pay rate produce very different totals.
Agree whether rates hold for a fixed period and what notice a change requires. Long assignments outlive most quotes.
Agree the smallest billable unit and whether a cancelled shift still bills. Short-notice cancellations cost the agency a paid worker either way.
Decide whether mileage, parking, or travel time bills separately. Silence here usually means somebody absorbs it quietly.
A staffing agency contract has to answer this question plainly, because almost everything else follows from it.
Name the agency as the employer, responsible for hiring, paying, and terminating the worker. State that plainly rather than leaving it to inference.
The client usually directs what gets done and when. Acknowledge that split, since it is the ordinary shape of the arrangement.
Assign responsibility for withholding, payroll taxes, unemployment contributions, and workers compensation coverage. Then require evidence rather than assurance.
Say whose benefits apply and whose do not. Workers placed for long periods raise questions that short assignments never do. Some client benefit plans set their own eligibility rules, so check those before making promises.
Both businesses can end up treated as employers in some circumstances. The tests differ by agency and by jurisdiction. So take advice rather than relying on a clause that simply denies it.
Clients often want to keep somebody. Agree the price of that before anyone gets attached.
State whether the fee is a flat sum or a percentage of first-year salary. Also define which components of the package count toward that figure.
Fees commonly fall the longer a worker stays on assignment. Set the scale, since it turns a vague negotiation into arithmetic.
Where a converted hire leaves quickly, agree what the agency owes. Say whether the remedy is a replacement, a partial credit, or nothing at all.
Many agencies replace rather than repay. Decide which applies, and set a deadline for producing the replacement.
Say what happens when a client hires a worker months after an assignment ends. A defined window prevents an argument about whether any fee is owed.
Say whether the client may approach agency workers directly, and for how long after an assignment ends. Keep any restriction narrow and time-limited.
Money moves weekly in staffing, so the administrative terms matter more than they would elsewhere.
Name who approves hours and by when. An unapproved timesheet stops the agency paying somebody who already did the work. Agree a fallback when the approver is away.
Set the billing frequency and the format you need. Agencies bill weekly far more often than monthly, so align it with your own payment run.
State the days allowed and what follows late payment. Agencies carry payroll before they get paid, which is why these terms run tighter than most.
Agree a process for challenging hours, and a deadline for raising the challenge. Undisputed hours should still get paid meanwhile.
Where the client uses purchase orders or spending limits, say who monitors the balance. Assignments run past their cap surprisingly often. Agree who pauses the work when that happens.
The last group of terms covers the people themselves.
Set what the agency verifies before placing anyone: identity, work authorization, references, and any checks the role needs. Requirements differ by role and sector, so confirm what yours demand.
Confirm the client may decline a worker or ask for removal. Then say what notice that requires and how it affects billing.
Agree how quickly a replacement arrives when somebody leaves or gets removed. A vague commitment helps nobody at short notice.
Set the notice each side owes, and say whether partial weeks bill in full. Also cover what happens when the client’s need disappears overnight.
Require workers to follow client policies on confidentiality, systems, and premises. Then name who briefs them on those rules.
Say which records the agency keeps and what the client may inspect. Timesheets and screening evidence both matter when somebody asks questions later.
Ask for liability and workers compensation certificates before the first placement, with notice if either lapses.
Rates and fees are easy to agree while everyone is optimistic. Put them into a staffing agency contract template before the first worker walks through the door.
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