Staffing fees refer to the agency’s charges when it sends a temporary employee to its client. In this case, the agency is the employer, it pays the employee and it charges the client.
Placement fees refer to the agency’s charges when it refers a permanent employee that the client hires. Here, the client is the employer and owes the agency a referral fee.
In my book, The Staffing & Placement Firm’s Guide to Getting Paid (Quickly) in New Jersey, I discuss several industry-specific fee disputes that agencies often face. I’ve classified them into 4 main categories I call Timecard, Contract, Causation and Compliance Challenges.
In a Timecard Challenge, the client contests the amount of time billed for a temporary worker. This applies specifically to staffing and not placement fees.
In a Contract Challenge, the client says there’s no enforceable agreement entitling you to a fee (for example, it hires your candidate for a different position and says the fee agreement doesn’t apply), and in a Causation Challenge, it says someone else’s efforts (like a different agency’s referral) caused the hiring. These apply to placement but not staffing fees.
And in a Compliance Challenge, the client says you violated some statute which precludes you from enforcing your fee. Specifically, New Jersey requires all agencies to comply with statutory license or registration requirements. Any agency that doesn’t is barred from suing. This can occur in either placement or staffing fees.
Finally, like other contracts for services, staffing and placement fees in New Jersey are governed by the 6-year statute of limitations.
To learn more about staffing agency collections, download your free copy of The Staffing & Placement Firm’s Guide to Getting Paid (Quickly) in New Jersey
I practice throughout New Jersey (all counties), and also accept cases in Southeastern Pennsylvania.