Contract term guidelines: Employment agencies

We've created these guidelines to help you create contracts for business transactions with applicants. The guidelines aren't intended to be all-inclusive, restrictive, or mandatory.

• Items 14 below must be included in some manner in all agency-applicant contracts.
• Item 6 can't be changed, and must be included in your contract.
• To ensure validity, each contract should be dated and signed by both parties and include:
  • A line for the signature of the agency representative.
  • A line for the signature of the applicant.
  • and
  • A place for the applicant's initials or signature indicating "contract received."
• You may want to change these clauses or include additional ones to meet your needs. If so, we must review these changes in detail before we can approve the contract for use.

Terms and clauses to include in the contract

The following terms and clauses have been approved for use in your agency-applicant contracts:

1. Include information about when a placement fee is required:
   
   "I hereby agree to pay [name of employment agency] a placement fee according to the terms of this contract when they have referred me to an employer and as a result of that referral, I have accepted a position. I understand I "accept" a position for purposes of this contract when I agree with an employer, either orally or in writing, to begin work."
2. Include information about your fees:
   
   "The following terms shall govern the fee that I will be obligated to pay for a permanent position. A permanent position is one which the employer, [name of employment agency] and I intend at the time of acceptance, to last longer than 60 days.
   1. The following schedule shall apply, subject to the limitations provided elsewhere in this contract:
      

      Monthly salary (For example)	Range of agency's fee Expressed in dollars (See WAC 308-33-030)	Agency's fee as a percent of Expected monthly compensation
      Less than $300.00	Up to $90.00	30%
      $300.00 to $349.99	$120.00 to $139.99	40%
      $350.00 to $399.99	$175.00 to $199.99	50%
      Etc.	Etc.	Etc.

      (A month is considered to be 4-1/3 weeks.)
   2. The fee for a temporary position shall be [percentage]% (not to exceed 20%) of gross earnings: Provided however, that in no case shall the fee exceed that specified in the fee schedule for a permanent position. A temporary position is a position, which at the time of acceptance, is intended by the employer, [name of employment agency] and I, to last less than 60 days. The fee for a temporary position which becomes permanent, will be charged in accordance with the permanent rate, with credit given for any fee previously paid.
   3. I understand that if I accept permanent employment with an employer to whom I am referred, I am obligated to pay the full fee in accordance with the fee schedule above.
   4. I understand that if I accept employment with an employer to whom I am referred and regardless of reason, such employment is terminated by either party within 60 days after reporting for work, I will be obligated to pay [name of employment agency] [percentage]% (not to exceed 20%) of the gross wages salary or commission actually received by me in such employment or the full fee computed in accordance with the fee schedule, whichever is less.
   5. I understand that if I accept employment with an employer to whom I am referred and thereafter never report for work, I am obligated to pay [name of employment agency] ten percent (10%) of what my first month's wages, salary or drawing account would have been, if known. However, if the employment was to have been on a commission basis without any drawing account, then no placement fee may be charged by the agency."
3. Include a clause for re-evaluating the fee required:
   
   "I further understand that I may submit payroll information to the [name of employment agency] within 70 days after acceptance of employment for re-evaluation to reflect a fee based on actual earnings for the first 60 days of employment."
4. Include clauses which state when the fee is due the agency and specify that your agency can't require an applicant to make payments in any 1-month period in an amount that exceeds the applicant's anticipated gross earnings for 1 month (see WAC 308-33-011).
   • If you offer a discount for cash, deferred payments, or other credit arrangements, you must describe these provisions, including details as to the amount of discount, time and method of payment, etc.
   • If the credit arrangements are such that the transaction falls within the definition of a "retail installment transaction" as described in RCW 63.14.010(5), the contract must comply with the requirements in RCW 63.14 for retail installment contracts.
5. Provide a place for the applicant's initials to designate or acknowledge whether he is applying for only a position for which he will pay the fee (applicant paid), or for only a position for which the employer will pay the fee (employer paid), or both.
6. Following all contract clauses and directly above the space reserved in the contract for the applicant's signature, the caption "Notice to applicant - Read before signing", shall be printed in 10-point bold-face type or larger. Immediately under this caption, the body of the notice, printed in 8-point bold-face type or larger, will state:
   
   "This is a contract. If you accept employment with any employer through [name of employment agency] you will be liable for payment of the fee as set out above. Do not sign this contract before you read it or if any spaces intended for the agreed terms are left blank. You must be given a copy of this contract at the time you sign it."
7. As required by RCW 19.31.040, RCW 19.31.170 limitations on fee amounts, refunds, or exceptions must be either printed on or attached to the contract (a copy is enclosed for your use).

Additional clauses

You may include these clauses if applicable or desired.

• "I agree that if I accept employment on a commission basis without any drawing account, then the gross fee charged shall be a percentage of commissions actually earned during the first 60 days of employment."
• "If my earnings are based in full or in part on a commission, bonus, drawing account or guarantee, or any combination thereof, I agree that the fee shall be based on estimated earnings to be determined by [name of employment agency], my employer and me."
• "I agree to pay the full fee provided in this contract if, within 6 months of the date of this contract, I am offered and accept a position as a result of my prior referral to that employer by [name of employment agency]."
• "If it is necessary that [name of employment agency] employ a collection agency or attorney to collect this fee, I agree to pay reasonable collection costs, attorney fees and court costs."
• "Placement counselors are not authorized to enter into any agreement that is contrary to the terms of this contract."