Employment Agency Fees

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.



comments powered by Disqus
Hot Definitions
  1. Federal Reserve Note

    The most accurate term used to describe the paper currency (dollar bills) circulated in the United States. These Federal Reserve Notes are printed by the U.S. Treasury at the instruction of the Federal Reserve member banks, who also act as the clearinghouse for local banks that need to increase or reduce their supply of cash on hand.
  2. Benchmark Bond

    A bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds. Also referred to as "benchmark issue" or "bellwether issue".
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
  4. Oil Reserves

    An estimate of the amount of crude oil located in a particular economic region. Oil reserves must have the potential of being extracted under current technological constraints. For example, if oil pools are located at unattainable depths, they would not be considered part of the nation's reserves.
  5. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
  6. Aggregate Risk

    The exposure of a bank, financial institution, or any type of major investor to foreign exchange contracts - both spot and forward - from a single counterparty or client. Aggregate risk in forex may also be defined as the total exposure of an entity to changes or fluctuations in currency rates.
Trading Center