CSP Contract Staffing & Billing Practices 3

Question 1

Which contract clause protects a staffing firm from damages claims that far exceed the fees earned on an assignment?

Accepted Answer

Limitation of liability clause

Answer

A limitation of liability clause caps the staffing firm's financial exposure—typically to total fees earned—protecting it from claims that would far exceed the value of the contract.

Question 2

A 'pay-when-paid' clause in a staffing subcontract arrangement means:

Accepted Answer

The subcontracting staffing firm is paid only after the prime contractor receives client payment

Answer

A pay-when-paid clause makes the subcontracting firm's payment contingent on the prime contractor receiving funds from the end client, shifting cash-flow risk down the supply chain.

Question 3

A staffing agency charges $32/hr and pays workers $22/hr with an employer burden rate of 18% of pay rate. What is the approximate gross profit per hour?

Accepted Answer

$6.04

Answer

Employer burden = 18% x $22 = $3.96; Gross profit = $32 - $22 - $3.96 = $6.04.

Question 4

Which of the following is a common contractual requirement a staffing firm must fulfill before a temporary worker begins an assignment?

Accepted Answer

Providing certificates of insurance to the client

Answer

Most client service agreements require the staffing firm to provide certificates of insurance (workers' compensation, general liability, professional liability) before placement commencement.

Question 5

What is the typical purpose of an 'exclusivity' clause in a staffing services contract?

Accepted Answer

It requires the client to use only one staffing firm for specified job categories

Answer

An exclusivity clause obligates the client to use only the named staffing firm for certain roles or departments, giving the staffing firm guaranteed revenue in exchange for preferred pricing.

(CSP) Certified Staffing Professional Practice Test

(CSP) Certified Staffing Professional Practice Test

CSP Contract Staffing & Billing Practices 3