An employment agency is a company that matches workers to open jobs. The first employment agency in the United States was opened by Fred Winslow who opened Engineering Agency in 1893. It later became part of General Employment Enterprises who also owned Businessmen's Clearing House (est. 1902). Another of the oldest agencies was developed by Katharine Felton as a response to the problems brought on by the 1906 San Francisco earthquake and fire.
In the UK the temporary worker is technically self employed & introduced by the recruitment agency to working on site for the client who pay the bills. The agency is responsible for paying the temporary worker plus paying employers national insurance to the government and setting aside holiday pay (working time directive or WTR (regulations)). This total cost then has a profit margin added and is charged per hour to the client. The temporary worker fills in timesheets (often online) and is paid by BACS on a weekly basis. Some industries in the UK are more heavily regulated by the gangmaster regulations. Many UK manufacturing companies rely heavily on "Temp Staff" during periods of high demand, in recent years U.K agencies hqave responded to the demand for high quantaties of cheap temporary labour by "shipping people in" from within the EU particularaly eastern Europe and former Soviet states. The vast majority of these workers are employed using a contract for services and rarley earn more than the national minimum wage.
Probably inspired by the dissenting judgments in a US Supreme Court case called Adams v. Tanner, the International Labour Organization's first ever Recommendation was targeted at fee charging agencies. The Unemployment Recommendation, 1919 (No.1), Art. 1 called for each member to,
"take measures to prohibit the establishment of employment agencies which charge fees or which carry on their business for profit. Where such agencies already exist, it is further recommended that they be permitted to operate only under government licenses, and that all practicable measures be taken to abolish such agencies as soon as possible."
The Unemployment Convention, 1919, Art. 2 instead required the alternative of,
"a system of free public employment agencies under the control of a central authority. Committees, which shall include representatives of employers and workers, shall be appointed to advise on matters concerning the carrying on of these agencies."
In 1933 the Fee-Charging Employment Agencies Convention (No.34) formally called for abolition. The exception was if the agencies were licensed and a fee scale was agreed in advance. In 1949 a new revised Convention (No.96) was produced. This kept the same scheme, but secured an ‘opt out’ (Art.2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labor market. The United States did not sign up to the Conventions. The latest Convention, the Private Employment Agencies Convention, 1997 (No.181) takes a much softer stance and calls merely for regulation.