Staffing Contract Agreement | Employment Contract Agreement | Recruitment Contract Agreement:
The information about the agreements like Right to Represent Form, Non-Solicitation Agreement, Non-Disclosure Agreement, Master Service Agreement, and Statement of Work, provided below is brief and not a detailed one, which will help most of the recruiter trainees, resume sourcing personals, junior recruiters, bench sales manager (junior) to get the hang of recruitment contracts or staffing contracts. In this section we are not explaining about the agreements in hiring a full time employee and we are focusing on the corp-corp contracts between a vendor and a client. For a detailed description about each agreement, you can search in search engines and find out.
1. What are the agreements that a client or a vendor send to candidate's (contractor or consultant) employer before the candidate’s interview?
Right to Represent (RTR) form, Non Solicitation Agreement, Non-Compete Agreement, Non-Disclosure Agreement, MSA (Master Service Agreement). These contracts are sent separately or the MSA may contain all the information.
2. What is the agreement that a client or a vendor send to candidate's employer after the candidate is selected?
Statement of Work (SOW) which is also known as Purchase Order (PO) or Work Order (WO).
3. What are the details required for the client from the candidate's employer for signing MSA and SOW?
Candidate Details: Consultant Full Name, Date of Birth, Full Social Security Number (SSN), Technology.
Candidate's Employer Details: Name of the Company, Address, Phone Numbers, Fax # ,Federal Tax ID # , Authorized Signatory, Designation, Phone #, and Email ID.
4. What is Right to Represent (RTR) Form?
RTR is a document between a client and a candidate. Sometimes the candidate signs it and sometime the candidate and representing firm (may be employer also) sign the agreement. For a requirement, End Clients receive the resume of a candidate from different vendors, which leads to multiple submissions. So the end client is not able to find the employer or the firm representing that candidate. To overcome this difficulty, the end client requests the candidate to sign the ROR form. Nowadays, without
the signed ROR, client doesn't accept the resume.
Example of a RTR form: I <Candidate Name> hereby request that I give the exclusive right to the <vendor name or employer name> to submit my resume to <Client Name>, <Location>. This exclusive authorization will be effective for 90 days and I will only represent <Vendor name> for this project.
After taking the interview, I also agree that <Vendor Name> will get an exclusivity for 24 hours after the interview has taken place and if selected, I will positively and unconditionally join the assignment for which <Vendor Name> has presented me at its <client's> location.
5. What is Non Solicitation, Non-Compete Agreement?
Scenario: Assume that a candidate works with a company called Vendor2 and Vendor2 submits the resume to another company called Vendor1. Then Vendor1 submits the resume to the Client.
When a candidate joins as a contractor with client through some vendors, following problems may occur.
- Vendor2 may approach the client without knowledge of Vendor1 and get some business during the contract period or after the contract period.
- Candidate may approach the client and get some business for Vendor2.
- During that contract period, Vendor2 may approach the client through another company VendorX.
- Candidate may approach the client and get a full time permanent job.
- Vendor2 may try to get the actual billing rate of the consultant to the client.
To overcome the above mentioned problems, Vendor1 sends Non Solicitation Agreement to Vendor2. After Vendor2 signs the agreement, then Vendor1 submits the resume to the client.
<Vendor2 Name> agrees that <Vendor1 Name> has developed and continue to develop at great expense, a business relationship with the client.
Therefore from the signing of this agreement and one year thereafter, neither <Vendor2 Name> nor its personnel will provide or attempt to provide directly or indirectly any services to <Client> other than through <Vendor1 Name>.
<Vendor2 Name> and <Vendor2 employees> agree not to compete either directly or indirectly with <Client> for any contract/consulting, or temporary/permanent employment position without the written consent of <Vendor1>.
<Vendor2> agrees to represent <Vendor1> throughout the tenure project of the client.
6. What is Non-Disclosure Agreement or Confidentiality?
The following explanation provided below is between a client, a vendor (who submits candidate's resume to the client) and the candidate's employer.
When a candidate (contractor) is working with the client through a vendor, the candidate or the candidate's employer will get to know technical information, business information, salary information, any information not known to public about the client and the vendor. This information should be kept confidential and should not be disclosed to anyone. So the vendor sends an agreement to candidate's employer, which is called as Non-Disclosure Agreement or Confidentiality.
Technical Information: Concept, Development, Client's products, trade secrets, service, product data, specification, business process, original works of authorship, patent, copy rights, tools, Diagrams, Flow Charts, Drawing, invention, research projects.
Business Information: Business methods, business strategies, cost information, profit, sales, accounting, business plans, marketing methods, customer lists, supplier list, pricing etc.
7. What is MSA?
- MSA means Master Service Agreement. In staffing world, it is also known as Prime Provider Agreement, Contractor Agreement, Professional Services Agreement, Independent Contractor Agreement, and Sub Contractor Agreement etc.
- It is an agreement between two parties. Example: Client and a vendor. Usually the client sends the MSA to the vendor and the vendor has to accept all the clauses mentioned, sign it and send it to the Client.
- MSA usually contains the following clauses: Scope, Terms of Agreement, Fees, Payments, Other Costs, Confidentiality, Liability, Ownership of Intellectual Property, Insurance, Indemnification, and Breach etc.
- Most of the clients accept resumes or submit resumes to other clients when MSA is signed by the vendor.
Even though MSA contains lot of covenants (promises), from the recruiter perspective, you have to make sure of the following: The following explanation provided below is between a client, a vendor (who submits candidate's resume to the client) and the candidate's employer.
- Payment Terms: For example, Net30days means the employer will get the payment from the vendor within 30 days from the date of invoice. Other possibilities: Net 10, Net 15 days or 45 days or 60 days or once they(vendor) have received payment from the client, they will pay the Candidate's employer.
- Invoicing: Weekly, Biweekly, Semi Monthly, or Monthly Invoicing
- Weekly: Once in a week, invoice has to be raised
- Biweekly: Once in two weeks, invoice has to be raised
- Semimonthly: once in 15 days
- Monthly: once in 30 days
Example: Net 45 monthly invoicing: If a candidate works from Jan 1 to Jan31, on February 1st , candidate’s employer will send invoice to the vendor and the vendor will pay it on or before 15th of March. The next invoice from the candidate’s employer will be sent on March 1st.
- Notice Period: 15 days or 30 days or 2 weeks: You have to accept if it is 15 days or 2 weeks, since that is the USA standard. At times the vendor will mention that the candidate has to work for the entire project duration.
- Hiring Clause by the client: Whether the client will hire the candidate. If the client desires to convert a consultant to its direct employee and Vendor negotiates with client and receives a liquidation fee for such conversion, then what is the percentage the candidate&339;s employee will be getting.
- Overtime: Whether overtime is paid? If paid, then on what basis. Actual billing rate or 25% more than the actual billing rate.
- Non-Solicitation of Employer Consultants: Vendor will not try to hire employer's consultant. Is there a possibility that vendor will hire the consultant after a certain time?
- Termination: If the client or vendor terminates, is that immediate?
- Expenses: Are expenses (air fare, cab, hotel, food) provided for this project?
- Unsatisfactory Service: Is there any clause which states that the client will be evaluating the candidate for 1 week or 2 weeks.
8. What information does SOW contain?
SOW is sent by the client to the candidate's employer or from a vendor to Candidate's employer.
- Agreement between two company names and Date
- Candidate Full Name, Social Security Number
- Description of Service
- Client Name and Location
- Project Start Date and Project Duration
The candidate's employer has to sign and send the SOW to the client or the vendor.
Contracts Department Roles