Liquidated Damages

Compensation fee paid to a temporary staffing firm for the loss of an employee when the staffing firm’s customer hires the temporary employee on a direct-hire basis. This is more typically known as a Conversion fee in Europe. Some full-service firms prefer to charge a “placement fee” rather than liquidated damages when this occurs. Many firms allow the liquidated damages or placement fee to be negotiated over a period of 30 to 180 days on the temporary assignment. (See also: Conversion Fee, Temporary-to-Permanent.)

Source: Staffing Industry Analysts

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