Staffing and placement fees are governed by the 6-year statute of limitations on services.
In my books, The National Fee Collection Guide for Staffing & Placement Agencies, and The Employment Agency’s Guide to Getting Paid (Quickly) in New Jersey, I refer to 3 main types of fee disputes which are unique to employment agencies. I call them Compliance, Contract, and Causation Challenges.
Compliance Challenges refer to defenses alleging you violated some statute, which therefore bars you from suing for fees. It has nothing to do with whether you’ve earned your fee, just whether you can enforce it.
In New Jersey, all employment agencies – both staffing and placement firms – must comply with statutory license or registration requirements. Any agency which fails to do so is barred from suing.
For a state-by-state summary of statutory requirements, you can download a free copy of my compliance chart.
But beyond compliance issues, placement fees are subject to other unique defenses.
Contract Challenges generally state there’s no agreement entitling you to a fee. For example, the employer might engage you to fill Position A, hire your candidate for Position B, and say your fee agreement doesn’t apply. Or it may hire your candidate a couple of years after the referral and say your right to a fee expired.
Causation Challenges state that despite your referral, someone else’s efforts actually caused the hiring. For example, the employer might say another agent also referred your candidate, or the candidate answered a help-wanted ad, or they already knew each other, etc.
These are just a few examples. Other fact patterns are common. But with proper planning and contracts in place (see the page on Forming and Operating a NJ Employment Agency), you can minimize the opportunities to contest your fees. And when fee challenges do happen, your lawyer should understand the common defense patterns and how courts tend to treat them.
To learn more about employment agency fee disputes (and how to avoid or defeat them), download your free copies of The National Fee Collection Guide for Staffing & Placement Agencies and The Employment Agency’s Guide to Getting Paid (Quickly) in New Jersey.
I practice throughout New Jersey (all counties), and also accept cases in Southeastern Pennsylvania.