Staffing client agreements.
Fees, liability, and non-solicitation.
Temp-to-perm fees not documented. Non-solicitation clauses that courts won't enforce. Liability provisions that leave the agency exposed. Kontractually reviews staffing client service agreements against your standard playbook.
No credit card required. First 3 reviews free.
What changes when you review client MSAs consistently.
A new enterprise client sends their standard MSA. The temp-to-perm conversion fee is buried in a schedule and set at 10% - half your standard rate. Nobody catches it until a candidate converts and you invoice the wrong amount.
Kontractually flags the 10% conversion fee against your standard 20% rate before you countersign. You negotiate the fee upfront, not after the placement.
Your agency signs a client agreement with uncapped liability for placed worker conduct. A contractor causes $200K in damage at the client site. The client comes after you for the full amount because the MSA says you accepted that risk.
Kontractually flags uncapped liability clauses and missing indemnity caps before signing. You negotiate a reasonable cap or purchase additional coverage before any workers are placed.
A client MSA includes a 24-month non-solicitation clause covering all agency staff - not just placed workers. Your recruiter moves to a competitor and the client claims breach because the clause was broader than you realised.
Kontractually highlights overbroad non-solicitation scope and flags that it covers staff beyond placed workers. You narrow the clause to placed candidates only before signing.
6 provisions to review in every staffing client service agreement.
A temp-to-perm fee (or introduction fee) applies when a client directly hires a worker who was placed by the staffing agency. The fee is generally enforceable if: the candidate was placed within a defined period (usually 12-24 months), the fee amount is specified in the agreement, and the fee is not unconscionable relative to the placement value. Courts have upheld these fees where they are clearly stated and proportionate. Kontractually flags client service agreements that lack clear temp-to-perm fee provisions.
Exclusive supply arrangements give the staffing agency the client's entire recruitment for a defined period or role category. While this provides revenue certainty, exclusive arrangements have competition law implications (particularly for dominant agencies or large clients) and may limit the client's ability to respond to urgent needs. Most client agreements are now preferred supplier rather than exclusive. Kontractually flags exclusivity provisions for review.
Liability caps in staffing client agreements typically range from one to three times the fees paid under the agreement in the preceding 12 months. Accepting uncapped liability for placed worker conduct is a significant risk - a single workplace incident could exceed the total revenue from the client relationship. Kontractually flags agreements with no liability cap, uncapped indemnity obligations, or caps that exceed your insurance coverage limits. The right cap depends on your insurance, the placement type (office vs industrial), and the client's risk profile.
Staffing agencies carry significant payroll obligations - you pay the worker weekly but may not receive payment from the client for 30-60 days. Key payment provisions to review: invoice cycle (weekly or fortnightly aligned with pay runs), payment terms (14-30 days is standard, anything beyond 45 days creates cash flow stress), timesheet approval process and dispute mechanism, and what happens if the client disputes a timesheet after the worker has already been paid. Kontractually flags payment terms that exceed your standard and identifies missing timesheet dispute provisions.
Clients often require specific pre-employment screening - reference checks, police checks, working with children checks, qualification verification, and drug and alcohol testing. The key question is not whether to screen, but what happens when screening is adequate but not perfect. If the MSA makes the agency liable for any placed worker conduct regardless of screening quality, that is an open-ended risk. Kontractually flags screening clauses that create absolute liability rather than a reasonable endeavours obligation, and identifies where screening obligations exceed what is commercially practical for the role type.
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