                              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.




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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




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