Kinds of Employment Covered by this Report
There are different provisions in the New York State
law which affect different types of employment. The laws described in
this report apply only to what is known as "Class B" employment --
commercial, clerical, executive, administrative and professional
employment, and all employment outside the continental United States.
This report does not cover domestic and household
employees, unskilled and untrained manual workers, non-professional
trained or skilled industrial workers and mechanics, and theatrical or
nursing employment.
What is an Employment Agency?
The New York State law regulating employment agencies
applies to any person who, for a fee, renders vocational guidance or
counseling service and who, directly or indirectly, procures or
attempts to procure employment; or represents that he/she has access
to, or the capacity to gain access to, jobs not otherwise available to
job seekers not purchasing the service.
Different laws pertain to those agencies which charge a
fee to the job applicant, and possibly also the employer, than to
agencies which make ONLY employer fee paid placements. These
distinction concern requirements for licensing, fees that may be
charged, and other provisions of the law as described in this report.
Licensing
Class B agencies which charge a fee to the applicant
must be licensed by the NYS Department of Labor (in New York City, by
the Commissioner of the NYC Department of Consumer Affairs). As a
condition of obtaining a license to do business in New York, employment
agencies must deposit a bond in the amount of $5,000 with two or more
sureties or with a surety company approved by the Commissioner.
Consumers who are damaged by practices of licensed employment agencies
in violation of the law may bring action against this bond. The
Commissioner also may institute a suit against the bond on behalf of
the damaged consumer. An employment agency must post a copy of its
license in a conspicuous place in the agency.
Agencies which charge a fee only to the employer need do not need to be licensed.
Contracts and Receipts
Licensed employment agencies must provide the applicant with:
- A copy of the contract which includes statements of the law
regarding conditions under which the employment agency is entitled to a
fee, and the circumstances under which any fees collected must be
rendered.
- A receipt stating the amount and purpose of any fee, deposit or payment that the agency collects.
- Information as to the name and address of the person to whom
an applicant is to apply for employment, the anticipated rate of wages,
the agency's fee, whether such employment is temporary or permanent,
the name and address of the person authorizing the hiring of an
applicant, and the cost of transportation if the services are required
outside the city where the agency is located.
Fees
Licensed employment agencies cannot accept a fee in
advance from an applicant and cannot charge or accept a fee for the
registration of applicants for employment.
Generally, after an applicant has been placed in a
position, the licensed employment agency is entitled to no more than
the following percentages of the first full month's salary or wages:
| First Month Salary |
Percentage |
| less than $750 |
25% |
| from $750 to $949 |
35% |
| from $959 to $1,149 |
40% |
| from $1,150 to $1,349 |
45% |
| from $1,350 to $1,499 |
50% |
| from $1,500 to $1,649 |
55% |
| $1,650 or more |
60% |
A fee up to 1 1/2 times the fee charged to the job
applicant may also be charged to the employer. By agreement with an
employment agency, the employer may voluntarily assume payment of the
applicant's fee.
If the employment states that the job is temporary
(less than four months) the employment agency's fees cannot be more
than 50% of that given above, or 10% of the total wages whichever is
less.
The fee may be paid in installments, based on the consumer's pay schedule.
If the applicant is hired on a commission basis, the
fee for the employment agency will be based on the employer's estimate
of yearly wages.
Return of Fees
Any licensed employment agency which has received
payment contrary to or in excess of the above schedule must return it
or the excess portion of it within seven days of a request for it.
If an applicant accepts employment, but fails to report
for work, the agency is entitled to 25% of the fee permitted by the
above schedule. If the applicant accepts employment, fails to report to
work AND remains with his/her former employer, the agency is entitled
to 50% of the fee allowed by the schedule. In either case, no fee may
be charged to the employer.
If an applicant accepts employment, reports to work,
and the job is terminated through no fault of his/her own, the fee
charged to the employee and the employer each shall not exceed 10% of
the salary or wages received (andnothing in excess of the fee schedule).
Under any circumstances, if an applicant accepted a
job, reported to work and the employment was terminated, the fee
charged to the applicant and the employer must not exceed 50% of the
salary or wages received (and nothing in excess of the fee schedule).
Additional Provisions of the Law
The law also prohibits both licensed employment agencies and unlicensed fee-paid agencies from:
- directing an applicant to an employer in order to obtain employment
without first having obtained a bona fide order for the job. One
exception to this is that an agency may direct an applicant to an
employer who has previously requested that qualified applicants be
sent. In the event that an applicant is referred to an employer who
neither had a bona fide order for the job nor had requested that
qualified applicants be sent, and the applicant does not obtain
employment, the applicant is entitled to reimbursement for the travel
expenses incurred within 24 hours of demanding it.
- sending an applicant to an employer where the agency knows or
reasonably should have known that the employment is in violation of
minimum wage or child labor laws or known that a labor dispute is in
progress without having notified the applicant of the existence of the
dispute.
- requiring an applicant to subscribe to any publication or incidental service or contribute to the cost of advertising.
- making or using any name, sign or advertising device which
bears a name similar to or which could be confused with that of any
government agency.
The law also prohibits any licensed agency from:
- inducing an applicant to terminate current employment in order to obtain other employment from the employment agency.
- publishing any false, fraudulent or misleading information, representation, promise, notice or advertisement.
- advertising in newspapers, or otherwise, or using letterheads
or other written material, unless such advertising or other matter
contains the name and address of the employment agency and the word
"agency".
- charging an applicant a fee for a job placement which the agency advertised as fee-paid.
The law prohibits an employer from:
- requiring, requesting or permitting an employee to reimburse him
for the cost of a fee paid by the employer to an employment agency or
an employer fee-paid agency.
Complaints
Complaints against licensed employment agencies in New
York City are also handled by the NYC Department of Consumer Affairs,
42 Broadway, New York, NY 10004. (212) 487-4444.
Complaints against licensed employment agencies in the
rest of New Complaints against licensed employment agencies in the rest
of New York State are handled by the New York State Department of
Labor, 1 Main Street, Fulton Landing, Brooklyn, NY 11201. (718)
797-7499.
Consumers can obtain information about an employment
agency before they do business with them, or file a complaint against
one, by contacting the BBB at 1-900-CALL-BBB for $1.50 per minute.
Consumers can also charge the call to a credit card by calling (212)
533-6200, or obtain free information, by writing to the Bureau at 257
Park Avenue South, New York, NY 10010. The Better Business Bureau
serving Metropolitan New York is a private not-for-profit corporation
which receives no government funding and is supported by responsible
businesses and consumers.
