Employment Agency Fees

AAA

DEFINITION of 'Employment Agency Fees'

An employment agency works to match employers with suitable employees. There are both public organizations and private companies that work as employment agencies. There is usually a fee for the service of matching employers and employees. Employment agencies have different methods of handling the fee issue.


There are two types of employment agency fees: The employer-paid fee and the applicant-paid fee.


Under the employer-paid fee, the employer assumes the total responsibility for the fee. The employee pays nothing. Traditionally, this is the more common type of fee arrangement and is preferred by employment agencies.


Under the applicant-paid (or employee-paid) fee arrangement, the employment agency fees are costs charged to the applicant for the service of finding an employer. This is normally a one-time fee charged to the client-employee for obtaining employment.

INVESTOPEDIA EXPLAINS 'Employment Agency Fees'

With the proliferation of telecommunications and IT companies, there is a different type of employer-paid fee arrangement. Some employment agencies have become the employer and a company can contract for employees from them. The company pays the employment agency a monthly fee for employees instead of to the employee. The employees supplied by the employment agency remain employees of the agency, not the company.

RELATED TERMS
  1. Break In Service

    The loss of use of the contribution or benefit plan of the corporation ...
  2. Employee Savings Plan

    A pooled investment account provided by an employer that allows ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  5. Corporation

    A legal entity that is separate and distinct from its owners. ...
  6. Civil Rights Act of 1964

    Landmark federal legislation that prohibits discrimination on ...
Related Articles
  1. Investing Basics

    Enterprise Resource Planning System: A How To

    An ERP system won’t transform poor management into good management, but the real-time business analytics can help make good management even better.
  2. Investing Basics

    How To Calculate Goodwill

    Goodwill is an intangible, but it is still possible to effectively calculate or estimate goodwill for a company.
  3. How does Outsourcing Work?
    Economics

    How does Outsourcing Work?

    Outsourcing is the business practice of hiring people outside a company to perform services that traditionally were performed within the company, by the business’s own employees. Companies typically ...
  4. Investing Basics

    Using Appreciative Inquiry To Solve Management Problems

    In its purest form, appreciative inquiry is a powerful tool for shifting the focus of an organization to something much greater than its bottom line - although the eventual outcome will often ...
  5. Investing Basics

    The Basics Of Value Chain Analysis

    Value chain analysis establishes an action plan to understand and implement actvities that create values to a firm's clients, resulting in firm profits.
  6. The job market has recovered enough, and people who had to scuffle to find a job can now start thinking about their next career move.
    Professionals

    10 Steps On The Career Ladder

    The job market has recovered enough, and people who had to scuffle to find a job can now start thinking about their next career move.
  7. Investing Basics

    Top Tools for ERP Enterprise Resource Planning

    Top tools used in Enterprise Resource Planning with its characteristics - Explaining the main tools companies use when using Enterprise Resource Planning appraoch
  8. Investing Basics

    Analysis of Companies with high goodwill

    High goodwill as a percentage of market cap can actually be a big red flag--it potentially means the company botched a major acquisition.
  9. Investing News

    Starbucks As An Example Of The Value Chain Model

    Management consulting guru Micahel Porter developed the value chain model in 1985; here's how it works, using a well-known real live case study: Starbucks.
  10. Investing Basics

    How Mergers and Acquisitions Can Affect A Company

    M&A can have a profound effect on a company’s growth prospects and outlook, but with a significant degree of risk.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center