October 9. 1975
The Honorable Joe Lassiter Opinion No. H- 712
Chairman, Texas Private Employment
Agency Regulatory Board Re: Whether certain temporary
P. 0. Box 12157 employment agencies are subject
Austin, Texas 78757 to regulation under article 522la-6,
V. T. C. S.
Dear Chairman Lassiter:
You have requested our opinion regarding whether certain temporary
employment agencies are subject to regulation under article 5221a-6, V. T. C. S.
That statute is applicable to every “private employment agency!’ as defined in
section l(e), “except as . . . exempted from [its] provisions. . . . ” Section
2 provides, however, that:
. . .~the provisions of this Act shall not apply to
any person conducting a business which consists
of employing individuals directly for the purpose
of furnishing part-time or~temporary help to others.
You state that persons who are assigned to work by a temporary
employment agency are, in the typical instance, directly employed and paid
by the agency. In most cases, however, the terms of the agency’s contract
with the contracting employer state that, if it should retain the employee on a
permanent basis, the contracting employer, or in some cases the employee,
is liable to the agency for a “liquidation fee. ” You inquire whether this
procedure brings thee temporary employment agency within the regulatory
purview of article 5221a-6.
In our opinion, a temporary employment agency which occasionally
offers other services, but whose overriding business activity is that stated
in the exception, does not thereby fall outside the exception. Where the
employee is on the agency’s payroll and subsequently accepts a position with
the contracting employer, payment to the agency would appear to be a kind of
liquidated damages given in consideration of the agency’s loss of its employee
rather than the kind of “fee” contemplated by section l(b) of the statute.
p. 3064
The Honorable Joe Lassiter - page 2 (H-712)
You have not provided us with any specific instances, and we believe
that each such situation must be judged on its particular facts. In doing so,
the Board should keep in mind the purposes of the Act, as expressed in
Attorney General Opinion M-750 (1970). It should be vigilant to insure
that no business which is in fact a “private employment agency” as
defined in section l(e) is permitted to utilize the exception as a sub-
terfuge by which to avoid regulation.
SUMMARY
In general, a temporary employment agency, whose
business “consists of employing individuals directly
for the purpose of furnishing part-time or temporary help to
others, ” is excepted from regulation under article 5221a-6,
V. T. C. S., but each case must be judged on its particular
facts.
Very truly yours,
Attorney General of Texas
p. 3065