Expertly Reviewed By: Serah Waweru, Esq., on April 12, 2023
A staffing agency can be a great way to quickly hire the right people for special projects and fill in gaps in the workforce. However, this recruiting system has its challenges. For instance, some rogue staffing agencies take advantage of hard-working individuals by denying them their hard-earned wages.
To put things into perspective, the US Department of Labor recovered over $3 billion in stolen wages for workers between 2017 and 2020.
Now that brings us to the big question – what happens if the staffing agency doesn’t pay its workers? Before we answer that question, let’s first define a staffing agency.
What Is a Staffing Agency?
A staffing agency, also known as a temp agency, is a type of recruiting agency that acts as a middleman between a job seeker and a potential employer.
The agency usually finds three main employment opportunities for prospective workers, as discussed below.
Temporary Opportunities
As the name suggests, a staffing agency can help you find temporary employment, usually with a set start and end date. This option can be beneficial if you’re looking for something short-term, allowing you to focus on other commitments once the employment period is over. For instance, students may be interested in working a temporary job during their school break.
Temp to Hire
This option allows potential employers to gauge whether a particular worker is an excellent fit for the company. The worker works for the employer temporarily and may secure a long-term contract or full-time employment with the company if the employer sees it fit.
Direct Hire
This system allows employers to hand over the recruitment process to the staffing agency. As a result, the agency usually recruits workers for permanent positions per their client’s requests.
That said, while most staffing agencies are professionally managed, a few bad ones give the good ones a bad name.
There is always the potential for problems to arise, especially when working for a rogue staffing agency. For instance, suppose the staffing agency does not pay you your wages on time or fails to pay you the full amount owed. In that case, you may wonder how to handle such a situation.
The good news is that there are a few things you can do if you ever find yourself in such a situation, as discussed below.
Staffing Company Did Not Pay Me – What Should I Do?
First of all, it’s illegal for a staffing agency or any employer to refuse to pay you if you’re eligible for payment. So if the staffing agency does not pay you for your work, here is what to do:
Review the employment agreement you had with the staffing agency. You may be surprised to realize that you haven’t been paid yet because of valid reasons. For example, bank holidays could defer the payment schedule.
Next, contact the agency directly to find out why you haven’t been paid. Don’t assume they’re acting out of bad faith unless you have a good reason to believe so. It could be a computing error, a problem with your timesheet, or any other genuine mistake. You want to clear these possibilities first before proceeding with the next step.
Suppose the agency is unresponsive or unwilling to help. In that case, you may need to contact the Wage and Hour Division of the US Department of Labor. This department enforces the country’s labor laws and helps hold rogue employers accountable on behalf of workers.
You’ll need to have the following information readily available when you contact the US Department of Labor to report the staffing agency:
- Your exact job title
- Proof of hours worked
- The agreed pay rate
- Any payment information, such as previous payslips
Another option is to contact your state’s Department of Labor. This alternative works best if you want to avoid going the federal route. The DOL will investigate your claim and determine whether the staffing agency violated employment laws.
If found to have violated labor and employment laws, the DOL may:
- Require the staffing agency to pay you the amount owed
- Order the agency to pay a particular fine
- Take legal action against the agency’s management, which could potentially lead to jail time
Keep in mind that penalties for wage theft vary from state to state.
How to Report a Staffing Agency for Not Paying Wages
If talking to your employer to resolve the issue doesn’t work, you can file a complaint with the Equal Employment Opportunity Commission (EEOC) or your state’s labor department.
To do so, you’ll need to gather some relevant information, including the following:
- Your name, address, and phone number
- The name of the staffing agency
- The dates of the pay period(s) in question
- The amount of money owed
- A copy of your pay stubs or other proof of payment (if you have it)
- Any other relevant information (like whether you were promised certain benefits but never received them)
Once you have all that information, reach out to the EEOC or your state’s labor department to file a complaint. They will investigate the matter and take appropriate action if they find that the staffing agency has violated any labor and employment laws.
How to Protect Yourself from Non-Payment by a Staffing Agency
It’s important to know your rights and how to protect yourself from non-payment when working with a staffing agency. Temp agencies are required to pay their workers for all hours worked, including overtime if applicable.
However, as mentioned earlier, some staffing agencies do not follow the law, and you may only realize this months or years after getting hired. Therefore, it’s always advisable to be prepared for the unexpected.
One great way to protect yourself is by keeping accurate records of all the hours worked and the tasks completed while working for a staffing agency. In addition, these records can be used as evidence if you need to file a wage claim or take legal action against a rogue employer.
Secondly, read every agreement your employer asks you to sign. Unfortunately, most employees trust their employers blindly and sign crucial documents without understanding their contents.
You never know – you may waive your rights by signing the dotted lines without reading the content above them.
Remember to review your pay stubs and other relevant documents every payday. This is because wage theft may occur gradually by deducting a few dollars from your paycheck every time you get paid. You must review your pay stubs regularly to notice these violations early enough.
FAQs
Can a Staffing Agency Refuse to Pay You if You Quit?
If you quit your job, your employer is not required to pay you for any unworked hours. However, if you have already worked those hours, then you are entitled to payment for the hours worked. The same applies if you have a contract with your employer that states they will pay you for unused vacation time. If so, they must abide by that contract.
How Long Can an Employer Not Pay You?
If you work for a staffing agency, you may be wondering what happens if the agency doesn’t pay you. Unfortunately, this is a common problem in the industry, even though many staffing agencies abide by the rules.
Most staffing agencies will have a contract stipulating how long they have to pay you. However, if the agency doesn’t pay you within that time frame, there are a few things you can do.
First, you should reach out to the agency and resolve the issue directly with them. If that doesn’t work, you can file a complaint with your state’s labor department or file a lawsuit.
Of course, taking legal action is always a last resort. But it may be your only option if you’ve tried everything else and the agency still hasn’t paid you.
The Bottomline
It is important to understand your rights when working for and receiving payment from a staffing agency. In many cases, the law protects workers and requires that they receive their wages in full and on time. However, suppose you are in a situation where the staffing agency has not paid you or fulfilled its contractual obligations. In that case, you should contact an attorney specializing in labor laws immediately for advice and possible representation.
