Facts for Consumers from the Federal Trade Commission

Job-Hunting: Should You Pay? -- July 1992

If you are looking for a job in the U.S. or overseas, you may come across ads that promise results placed by employment assistance businesses. Although many of these firms may be legitimate and helpful, others may misrepresent their services, promote fictitious and out-dated job offerings, or charge large upfront fees for services that often may not lead to a job. Some ads may direct you to call a '900' telephone number for job information. You will be charged either a flat fee or a per-minute charge for each '900' call, and the charge usually is much greater than the toll for an ordinary long-distance call. Other ads may ask you to visit the company's place of business for assistance in resume preparation, letter writing, and interviewing skills.

Before you contact any employment service firm, follow the suggestions at the end of this brochure for choosing a firm that is right for you. Also, before you pay or commit to pay for domestic or overseas job information or placement -- whether by calling a '900' number or by signing an employment services contract -- know what you will get for your money. This brochure explains how different types of employment firms operate and what questions you should ask when considering their services.

Types of Employment Service Firms

Do not judge an employment firm by its name. Classified advertising and telephone book listings do not always make clear the differences among employment services. Many names are used loosely and interchangeably, such as "employment agency," "personnel placement service," "executive search firm," or "executive counseling service." What is important to find out is what services the firm offers, how much those services cost, and who pays. If you, rather than an employer, are required to pay the fee, find out if you must pay even if the employment service does not find you a job.

This publication discusses six basic types of service companies/agencies that offer assistance in obtaining employment. They include: public employment services; employment agencies; executive search services; temporary help services; executive counseling services; and job listing services. Here are some descriptions to help you identify each type.

The federally-funded and state-operated public Employment Service, also known as the Job Service, operates in all fifty states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. There are some 2,300 points of service nationwide, of which approximately, 1,700 are considered full-time, full service offices. The Employment Service provides its services free of charge to both employers and job seekers. Openings range from entry level positions to technical and professional positions. The Employment Service provides access to the Interstate Job Bank -- a nationwide source of job opportunities. It also provides links to numerous employment and training programs in each state, including programs for the disabled, minorities, older workers, veterans, welfare recipients, and young people.

Employment agencies or personnel placement services work to fill specific positions available within companies. Their purpose is to bring applicants and employers together. In many cases, the placement fee is paid by the hiring company, but in some instances, where state law permits, the fee may be shared by you and your employer are billed to you, usually after a job is secured. Employment agencies are commonly licensed in the state in which they do business.

Executive search firms or executive recruiters are hired by businesses to find the "right" person for a particular job within a company. (These recruiters are sometimes referred to as "headhunters.") The executive who is hired does not pay the fee; fee payment is part of the agreement between the hiring business and the search firm. Executive search firms usually subscribe to a code of ethics established by industry members, and some are licensed by the states in which they do business, as required by state law.

Temporary help services are companies who provide workers to businesses on a temporary basis. Businesses pay an agreed upon wage to the temporary service for work performed by its employees. Workers are then paid by the temporary service firm, not by the temporary employer.

Executive counseling services or career counseling services assist job seekers with career decisions more than job placement. They may provide such services as skill identification and self evaluation, resume preparation and letter writing, and general information about companies in a particular geographical area or job field. Fees can range up to $4,000, and payment is often required before services are provided. You probably will have to pay this fee even if you do not find a job. Placement is not guaranteed. Executive counseling firms may or may not be licensed, depending on state law.

Job listing services or advisory services sell information, sometimes through '900' telephone numbers, about obtaining employment in the U.S. or abroad. Information may include lists of job openings, general tips on conducting a successful job search or interview, and broad guidance in resume writing. Advisory firms often require an upfront fee, which usually is charged even if you do not find a job through the firm. Be aware that some listing services and advisory firms may place ads that appear to offer jobs when, in fact, the firms are selling only employment information.

Choosing the Right Employment Service Firm

Consider your needs carefully. What type of employment assistance do you want and what will it cost?

Know what a '900' number call to an employment listing service will cost before you make the call. Reputable companies will state these costs upfront. If you have fraudulent '900' number charges on your telephone bill, ask your phone company to delete them, although the company is not legally obligated to do so.

Ask any employment assistance company you contact who pays for its services, you or the employer, before you sign a contract.

When you are required to pay, ask the company if payment must be made before services are given and if you are required to pay even though you do not find a job.

Look for an employment service that regularly fills the sort of position you are seeking. If you are a writer, look for a firm that hires people with that skill. Classified ads in newspapers or trade magazines are a good source for finding specialized employment agencies as well as positions.

Realize that employment service firms only can promise to help you find a job; they cannot guarantee that they will find you a suitable one.

Check with your local consumer protection agency and the state Attorney General's Office to find if they have received any complaints about an employment company with whom you intend to sign a contract. You also can ask these agencies about any state laws concerning employment.

Most important, read the contract carefully before you sign it. If the sales representative makes claims that are not in the contract, remember the contract is what counts.

Free Resources

There are a number of free sources of employment information, in addition to the newspaper classified ad section.

Job Service offices post job vacancies. They also provide some counseling and referrals to other job resources.

Local and county human resources offices and information referral services offer some placement assistance. They can give you the names of other groups that can help, such as labor unions or federally-funded vocational programs.

University and college career service offices usually limit their assistance to students and alumni, but some may let you look at their job listings. They may be a good reference for free job information.

Local libraries also can be a good source of information. Ask the librarian to direct you to material that can help you write a resume, conduct an interview, or compile a list of companies whom you might contact about job openings.

For More Information

To learn more about employment service firms, write to your local Better Business Bureau. You also can send for the free FTC brochure '900' Numbers by writing to: Public Reference, Federal Trade Commission, Washington, D.C. 20580.

If you have a problem with a firm, contact your local consumer protection office, Better Business Bureau, the appropriate state licensing board, or your state Attorney General. Although the FTC cannot intervene in individual cases, the staff monitors job placement practices and would appreciate copies of your correspondence. Write to: "Job Scams", Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580.


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