What restrictions are there on employment businesses charging "temp to perm" fees in relation to agency workers?
Employment businesses (ie agencies) supplying temporary staff to employers can charge a transfer fee where a temporary worker accepts an offer of employment made by the end-user employer. However, the contract between the employment business and the employer must contain a term giving the employer the option, instead of paying the transfer fee, to choose to continue hiring the worker for a specified period of time, after which the worker will transfer to its employment with no fee payable. There is no limit on this extended period of hire. If the agency fails to supply the agency worker to the end-user employer for the duration of the extended hire period in accordance with the agreement, the transfer fee and extended hire period will be unenforceable and the employer will be free to employ the worker. This rule does not apply where the failure to supply the worker is in no way the fault of the agency.
An end-user employer can also avoid paying a transfer fee once a certain period of time has elapsed after the end of a worker's assignment with it. This period is 14 weeks from the start of the assignment or eight weeks from the end of the assignment, whichever ends later. After this period the employer is free to hire the individual directly. Where a worker works intermittently for an end user, the 14-week period is treated as continuous from the first date of the first assignment, unless the assignments have been separated by more than 42 days, in which case the 14-week period starts again.