Employment Agencies Frequently Asked Questions

1. Does an employment agency have to be licensed?

Yes.  An employment agency is any person or business that charges a fee to find a job. The law requires all employment agencies to be licensed by the New York State Commissioner of Labor, or if the employment agency is located in New York City, by the New York City Department of Consumer Affairs. NY General Business Law sec. 172  Employment agencies are required to prominently display their license.

2. Does the law limit the fees an employment agency may charge?

Yes.  First of all, the agency is only allowed to charge or accept a fee (or anything else) to a job applicant (1) in accordance with a written contract – except for “Class A” or “Class A1” workers (see table below), and (2) after the agency refers the applicant to an opportunity that results in the person being hired. The agency must give the applicant a copy of the contract, and it is not allowed to charge just to register an applicant.  For “Class A” or “Class A1” workers only, the agency is allowed to require a deposit or advance fee, but it must return that deposit or advance fee immediately on demand if the job applicant has not yet found a job, and must refund any excess above the maximum legal fee immediately when a job is found.  The agency must give the job applicant a receipt for any fee, deposit or other payment.  NY General Business Law secs. 181 and 185    

The maximum fee the agency may legally charge if it follows these rules depends on the job.  In general, New York General Business Law section 185 provides:

If the job is as a:

Then the maximum fee allowed is:

“Class A” - domestic, household employee, unskilled or untrained manual worker

10% of the first full month’s wages if no meals or lodging are provided (12%, 14% or 18% if the employer provides one meal, two meals or three meals and lodging each day)

“Class A1” – non-professional trained or skilled industrial worker or mechanic

one week’s wages, if the job is for at least ten weeks; otherwise, 10% of the wages actually received

“Class B” – most other jobs, except theatrical and nursing jobs which have special rules

a sliding scale, depending on the wage – 25% of the first full month’s wages if those are less than $750, up to 60% of the first full month’s wages if those are more than $1650

 

 

3. Is an employment agency required to provide receipts for fees?

Yes.  Employment agencies must provide applicants with a receipt for any fee or deposit The receipt must be signed by the person who received the payment, and must show:

  • the name of the applicant,
  • the name and address of the employment agency,
  • the date and amount of the fee or deposit, and
  • the purpose of the fee or deposit.

NY General Business Law sec.181

4.  Is an employment agency required to provide copies of contracts?

Yes.  Employment agencies must provide applicants with a copy of any contract entered between the employment agency and the applicant. NY General Business Law sec.181

5.  Is it illegal for an employment agency to refer an applicant to a job that pays less than the minimum wage or does not pay overtime?

Yes.  It is illegal for an employment agency to refer an applicant to a job that the agency knows or reasonably should have known pays less than the minimum wage (see Part I above - the current minimum wage for most New York workers, is $8.00 per hour) or is violating other state or federal wage or child labor laws, including overtime laws. NY General Business Law sec. 187(5) and New York Labor Law sec. 664.

6.  Do anti-discrimination laws apply to employment agencies?

Yes.  The New York State Human Rights Law (see Part IV above) applies to employment agencies and prohibits discrimination based on age, race, religion, national origin, sexual orientation, military status, sex, disability or marital status.

  • Protection against Retaliation: It is against the law to discharge or in any other way discriminate against an employee for making a complaint to the Attorney General's Office or other appropriate government agencies.  For more information, contact the New York Attorney General’s Labor Bureau at (212) 416-8700, or the New York State Department of Labor at http://www.labor.state.ny.us or call 1 (800) 662-1220.

 

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