Employment agencies and employment businesses

Definition of an employment agency

An employment agency finds work for work-seekers who are then employed and paid by employers. This is often referred to as 'permanent employment' as once the worker has been recruited they become an employee of the business they are working for.

Definition of an employment business

An employment business employs or engages a work-seeker who then works under the supervision of another person. This is known as 'temporary agency work' or 'temping'. The workers under these arrangements are usually paid by the employment business rather than by the hirer (company) they are supplied to.

If your business engages in both activities then it is both an employment agency and an employment business.

The term employment agency is commonly used interchangeably for employment agency and employment business but the correct usage of the terminology is set out as above.

Exemptions to the legislation

The legislation does not apply to a number of specific organisations and services, including:

• university appointment boards or services and certain other educational institutions
• trade unions, employers' organisations, and certain professional members bodies
• certain services provided exclusively for ex-members of HM forces or for persons released from prisons and other institutions

If you publish a newspaper or other publication wholly or mainly for the purpose of providing work-finding services then it is likely that you would be acting as an employment agency or business. However, if job advertisements only account for a small proportion of a wider publication then it is unlikely that this would apply to you.