Staffing Agency Contract Template

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A staffing agency agreement is a legally binding contract between an agency and a company or individual looking for fast temporary talent hiring. You may need this paper to hire a sales representative for a conference to generate more product purchases. Fill out the essential details on Lawrina, download the agreement in a few clicks, and sign your ready-to-go document.
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A staffing agency contract template can be used to create a legally binding agreement between a staffing agency and a client company for the provision of staffing services. A standard contract outlines the services the agency will provide to the client, the obligations of each party, and the duration of the contract. 

In addition to staffing, the agency may offer other services that may include payroll management and workers compensation. The agreement may also specify the recruitment process that the agency will follow. Make a printable staffing agency contract to download and use by following a few simple prompts.

What Is a Staffing Agency Contract?

A staffing agency contract template is a document signed by a staffing agency and a client company to agree on providing staffing services. Some advantages of using this type of contract include fast hiring, cost savings, and risk mitigation.

Warning

Note that when you contract staffing agencies, you don’t usually hire individuals as employees. Instead, you enter into a business-to-business (B2B) agreement with the staffing agency.

Parties of the Staffing Agency Contract

There are two main parties in a staffing agency contract: 

  • The Staffing Agency — responsible for providing temporary, permanent, and independent employees or contractors to fill open positions in the client company. The agency is responsible for recruiting, hiring, and managing the workers. 
  • The Client Company — responsible for compensating the staffing agency for its services. They are responsible for supervising workers hired through a staffing agency and providing them with the necessary tools to fulfill their work responsibilities. 

Key Terms

A staffing agency contract example will generally contain the following key terms: 

  • Bill rate — The bill rate is calculated as a markup over direct costs and is the rate at which a staffing agency charges a client company for a worker’s time. The rate is usually higher than what the agency will pay the worker. The rate is negotiated between the agency and the client with the intention of allowing the agency to make a profit and cover expenses within the client’s budget for the engagement. 
  • Contingent worker — Workers brought in for a specific project or need inside an organization are different from temporary workers because temp workers are usually hired to cover for permanent employees who are on leave or to fill in during peak seasons. 
  • Markup — The markup is the difference between the bill rate charged to a client and the actual amount the staffing agency pays to a worker. The markup rate can range from 20 to 70 percent for temporary employees and 15 to 25 percent for permanent employees.
  • Pay rate — This is the actual amount an agency pays to a temporary contractor.
  • Statement of work (SOW) — A statement of work is a document that outlines the tasks, deliverables, and timelines that a contractor hired through a staffing agency will deliver to the client company.
  • Temp-to-perm or temp-to-hire — These terms refer to an arrangement that occurs when a staffing company places a temporary employee in a company with the possibility that the employee will be made permanent after a certain period of time or after meeting certain employer expectations.
  • Master service agreement (MSA) — This is a binding contract between the staffing agency and the client company. The document outlines the rights and responsibilities of each party, including details like the scope of engagement, payment terms, liabilities, and indemnification. The agreement establishes the general framework for the engagement between the two parties and forms the basis for staffing agency contracts.
  • Indemnification — In an indemnification clause, the staffing agency commits to hold the client company harmless in the event of losses, damages, or claims made by contractors while working for the client.
Insight

A staffing agency contract template includes all terms and conditions associated with staffing services for employees in different organizations. This legal document helps protect the basic rights of the employees recruited for short-term employment as well as the clients’ rights. 

What Should Be Included?

The more detailed a PDF talent agency contract example is, the less of a chance for future misunderstandings. For example, including what is meant by “providing technical support” can ensure that the parties get what they want from the agreement. Consider including the following elements in your staffing agency contract to ensure that the parties’ roles and responsibilities are clear. You can also mention these details in a staffing agency sales email template.

Contact Information

The staffing agency contract should have the full contact name and address for both parties. No employee information will be included, only the staffing agency and the client company.

Services Provided

Make sure to include the full list of services available from the staffing agency. This is important because being as specific as possible can prevent potential conflicts. Even details that seem unimportant can sometimes be determined essential.

Time Framework

Include the start and end dates for the contract. If the client company is looking for a more permanent project-based role, make sure the contract explicitly states its ongoing term.

Warning

Staffing contracts usually apply to a relationship of a fixed time period or a specific project. Then the contract terminates. These do not refer to permanent job arrangements as with independent contractors or freelance workers.

Rate Details

Include details about how the staffing agency will be paid, whether a flat rate or a percentage. Also mention the breakdown of any fees or costs.

Insight

Most staffing agencies already have a predetermined pricing model, and they decide if it is fixed-fee, project-based, performance-based, etc.

Invoicing Schedule

Specify while creating a staffing agency contract template how exactly the client company wants to be billed — weekly, monthly, or maybe invoiced at the end of the term. Make sure both parties agree with the chosen payment arrangement.

How To Write a Staffing Agency Contract

The staffing agency and the client company will take different steps when writing a staffing agency contract. 

For the Staffing Agency

The agency offers to supply staffing services to the client company. The offeror, therefore, outlines the scope of the services and the terms and conditions for service delivery. Several steps that the agency will take include the following: 

  • Understand the scope of work and staffing needs — Take time to consider the client’s staffing needs, project requirements, location of the job, deliverables expected, and the qualifications and experience required to fill positions in the client company. 
  • Review candidates — Review the pool of available candidates, checking the suitability of each according to the client’s scope of work and needs. 
  • Determine and negotiate the bill and pay rates — After reviewing the scope of work and assessing the candidates’ experience and expertise, the agency should then determine its bill rate and the worker’s pay rate. It is important to negotiate the appropriate rates with the client before drafting the contract. 
  • Draft the contract — Write a contract that captures the agreements made during your conversations with the client.
  • Review and sign — Review the blank contract form, fill out in any additional required details, such as name and position, and sign. 

For the Client Company

The client company is responsible for reviewing the terms of service that the agency is offering. The steps to take to complete writing the staffing agency contract include the following: 

  • Review the contract — Check the contract prepared by the staffing agency, making sure the document reflects the terms as decided during negotiations. Look closely at the rates, work hours, duties, non-compete clause, restrictive and indemnity clauses, and any other clauses in the contract to ensure that your interests are covered and all points are as agreed. 
  • Sign the contract — Once you are comfortable with the terms of the contract, add any required details, such as your name and position with the company, and sign. Be sure to maintain a copy of the contract for your records. 

When Is a Staffing Agency Contract Essential?

A sample staffing agency contract template can be used to create a mutually beneficial relationship as an alternative to other HR recruitment solutions. The use of staffing agency contract templates has increased steadily over the last few decades. Whatever the reason a company needs help from a staffing agency, they should know how to get contracts for a staffing agency. An employment agency contract is required, especially if:

  • The company needs to fill job requests quickly;

  • The parties want to ensure that the business relationship is legally established;

  • The company needs time to decide whether a temporary or contract employee is a long-term fit. 

Common Use Cases

Some of the common uses for a staffing agency application form include when a client company: 

  • Has fluctuating work demands and, therefore, needs a flexible workforce in response to spikes in demand and economic conditions;
  • Requires freelance employees, temporary workers, or permanent employees;
  • Needs contractors to work 40 hours or less per week;
  • Needs to quickly fill a permanent or temporary position; or
  • Requires the support of a professional staffing agency as it focuses on its core functionsю For example, a healthcare staffing agency contract sample is a perfect asset for healthcare agencies, accordingly, and Lawrina's staffing agency contract template can become one.

When Not To Use a Staffing Agency Contract

There are instances when a temp agency contract template may not be needed. Such instances are when the employer:

  • Wants more control over the employee, such as supervision rights and the ability to give direct instructions;
  • Prefers to pay the employee directly; 
  • Intends to provide benefits and perks to the employee; or
  • Prefers to work directly with an employee for tax or legal reasons.

State Law

All staffing agencies should comply with state law regulations, according to the 2020 US Code, Title 42, Chapter 21 — Civil Rights, Subchapter VI – Equal Employment Opportunities, Sec.2000e quoted below:  

"A staffing agency should comply with various statutes and other laws of each particular State that pertain to hiring workers in a similar manner to private businesses. The staffing agency is not permitted to discriminate based on workers’ gender, age, national origin, religious belief or race. It must also comply with the Americans with Disabilities Act. The staffing agency is also required to comply with all OSHA standards that are related to the job. In many states, staffing agency activity is subject to licensing, and there are certain mandatory requirements to obtain such a license." 

Insight

In most U.S. states, every staffing agency must provide the applicant with a copy of the written staffing agency agreement. It should outline the fee for staffing services, and in no case shall the staffing agency collect more than the agreed fee or the percentage of the first year’s total income.

Also Read

Frequently Asked Questions

Do staff hired through a contract staffing agency receive employee benefits?

Sometimes they might receive them. If the staffing agency hires professionals as employees, then staff are entitled to the same employee benefits. It is usually also mentioned in the staffing agreement template.
 

What to do next after creating my staffing agency contract?

After you’ve created your contract, consider whether you need legal help. Lawyers with backgrounds working on staffing agreements work can help you double-check whether everything is to the point. It is especially useful to ask for professional advice if the project and rate are costly.

What happens if an employer does not notify the staffing agency at the end of a contract?

A staffing agency has all the right to sue an employer using legal documents if the contract has ended before the mentioned date without notice. Once a contract has been signed, an employer is committed to following all the responsibilities mentioned in the clauses as is specified. Make sure to double-check a temp agency contract template before signing anything.