What Is a Temp-to-Perm Fee?
A temp-to-perm fee is charged when a hirer takes on an agency temp directly. When the Conduct Regulations let an agency charge one.
A temp-to-perm fee, which the law calls a transfer fee, is a payment an employment business asks a hirer to make when a temporary worker it supplied takes up employment with that hirer, or starts working for the hirer through another employment business. In England, Wales and Scotland these fees are controlled by regulation 10 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
Two conditions decide whether the fee can be enforced.
The hirer must be offered an extended period of hire instead. The contract with the hirer must let the hirer choose, by giving notice, to keep the worker supplied for a hire period of a length set out in the contract, instead of paying the fee. Once the worker has been supplied, the extended hire must be on terms no less favourable to the hirer than those that applied immediately before the notice. If the contract does not offer this choice, the fee term cannot be enforced.
The move must happen within the relevant period. That period is whichever of these ends later:
- 14 weeks from the first day the worker worked for the hirer under the agency's supply; or
- 8 weeks from the day after the worker last worked for the hirer under that supply.
If there is a gap of more than 42 days in which the worker did not work for the hirer through that agency, supply before the gap is ignored when finding the first day. A move after the relevant period ends cannot trigger a fee.
The Fair Work Agency's overview of the Conduct Regulations explains the same rules in plain English, including the separate position where an agency introduced a work-seeker but never supplied them as a temp. Because the extended-hire choice has to be in the contract itself, the time to get this right is when the hirer signs your terms of business, not when the hirer announces it wants to keep the worker.