Employment agencies and businesses
Fees to hiring companies (transfer fees)
If you run an employment business you can sometimes charge a transfer fee (called a ‘temp-to-perm’ fee) to hirers if they give a permanent job to a worker you’ve provided.
You must include all transfer fees and conditions in your contract with the hirer.
When you can charge a fee
You can only charge a transfer fee if all the following apply:
- your contract with the hirer gives them the option to extend the worker’s assignment
- the hirer does not take the option to extend the assignment
- the hirer gives the worker a permanent job less than 8 weeks after the end of their initial assignment - or less than 14 weeks after it started if that’s later
If the worker had more than one assignment with the hirer, and there were more than 42 days between assignments, the later assignment is treated as if it’s the first one.
Example
You supply a worker to a hirer for 4 weeks. The hirer then wants to offer the worker a permanent job.
Your contract with the hirer says they have to pay a transfer fee unless they hire the worker from you for an extra 6 weeks.
The hirer can pay the transfer fee now or keep hiring the worker from you for the extended period. Alternatively they can stop hiring the worker and wait 10 weeks before recruiting them directly.
The supply terms for the contract extension cannot be worse than for the initial assignment, for example you cannot increase your rates. You must provide the worker for the whole period unless you cannot for reasons that are not your fault.
Other fees
You can also charge the hirer:
- a ‘temp-to-temp’ fee if they change to a different employment business and take the worker with them
- a ‘temp-to-third-party’ fee if they introduce the worker to a third party (for example, they send their CV to another employment business or hirer who employs them directly)
- an introduction fee if you introduce a worker to a hirer but do not supply them
The conditions are the same as for temp-to-perm fees - except you do not have to offer the hirer a choice between the transfer fee and a contract extension with a temp-to-third-party fee.
You cannot try to charge a transfer fee in any other situation. Hirers can recover any money they’ve paid for fees that are against the rules.