Staffing and employment agencies are in a unique situation when it comes to employment agreements. Unlike a regular employer-employee business relationship, staffing agencies do business by loaning out their employees to other companies. The employees are technically considered independent contractors and are paid through the staffing agency, not through the client.
This obviously presents some tricky legal issues. How do you protect your agency from poachers? If your independent contractors are performing like they should be, client companies will often want to hire them on permanently. As a staffing agency that needs reliable people you can trust, you want to hold on to your employees as much as possible.
One way to do this is through setting up clearly stated, well written, quality employment agreements and contracts that establish some rules regarding an employee’s working relationship with a client. You can include provisions that prohibit solicitation from both parties (your client and your employee) beyond the scope of the job they were hired to do.
Here’s a list of the ten most important provisions that should be included and clarified prior to the commencement of any work being performed:
1. Scope of Services – clearly define, as specifically as possible, what work will be performed by the employee for the client. If the contractor will be expected to answer phones while at the position, include that in the contract. If it’s not included, the contractor should not be expected to do it.
2. Price and Payment Terms – as with any business agreement, it’s important that the price and how payment will be collected are discussed and agreed upon before any work is performs.
3. Employee Solicitation/Hiring – be very clear that solicitation of contractors will not be tolerated and is in violation of their contract.
4. Term and Termination – identify the time window in which your employee will be working for the client and what the end date will be for work performed.
5. Intellectual Property – who has the rights to any work performed or created by your employee while working for your client?
6. Confidential Information – a non-disclosure agreement never hurts here. Assure clients that any and all information a contractor is privy to during his or her time at the client company is confidential and treated as sensitive information.
7. Limitation of Liability – clarify what your staffing agency and contractors will be liable for. This is a good time for a liability agreement stating what you are directly liable for.
