If you operate an escort service, it is essential to have a contractual arrangement in place when engaging your employees. This contract, known as an escort agency contract, will establish the terms and conditions of your business arrangement with the escort, whether they are classified as either a contractor or employee. This classification is crucial as it will determine your:
- obligations towards the escort; and
- your legal responsibility for their actions.
As the escort industry is heavily regulated, you will want to ensure that you and your escorts follow the legal requirements established in your state. This article will assess the legal status of your escorts and determine what you should include in your escort agreement to safeguard your business.
Confirming the Status of Your Escorts
As a first step, you should consider whether your escorts are employees or contractors.
Determining your worker’s legal status is important because tax, superannuation and other obligations and entitlements vary depending on whether the escort is an employee or contractor. Generally, classifying them as contractors tends to be more advantageous, as it entails fewer care standards and reduces your legal responsibility for their actions.
Suppose you incorrectly classify your escort as an independent contractor when they are legally an employee (or vice versa). In this case, the Fair Work Commission or Federal Court may order you to pay:
- fines; and
- superannuation; and
- any other entitlements.
Key Terms to Include in Your Escort Agreement
After determining the legal status of your escorts, you should form a clear and comprehensive escort agreement. This agreement will help establish:
- the responsibilities and commitments that your business must fulfill;
- the expectations and requirements that you have for your escorts; and
- the procedures for resolving any disputes, in case any issues arise.
1. Fees and Payment Terms
Your escort agreement should clearly outline several terms relating to fees and payment. Let us explore these below.
Compensation
Ensure you clearly specify:
- the amount you intend to pay your escorts;
- when the agency will make payment; and
- how the agency will make payment.
Payment options can include:
- an hourly or daily rate for their services; or
- a percentage of the fee received from the client for the services.
For example, you might agree to pay your escorts 60% of the client’s fee, payable on the last day of each month.
Invoicing
Generally, escorts should provide you with an invoice that includes:
- their Australian Business Number (ABN); and
- the amount they are charging you.
Once you receive the invoice, you must adhere to the payment terms outlined in the escort agreement.
Transport Costs
You may reimburse escorts for transport costs. If so, your agency contract should specify whether this is included in the fee you pay the escort. Otherwise, ensure the contract stipulates that escorts must pay for transport themselves.
2. Warranties and Representations
Your agreement should include a warranties and representations clause.
Warranties and representations refer to the escort’s statements that contribute to the formation of the contract. These statements are relied on by your business when engaging their services.
Including a provision in the contract to guarantee these statements will help to protect your business. This provision holds the escort legally responsible for any losses or issues that may arise from false representations.
For example, you will want your escorts to represent, warrant and agree that they are:
- at least 18 years old;
- not legally restricted from entering into the agreement or providing the services; and
- not considered your employees (if they are independent contractors).
If you discover that one of your escorts is not 18 years old, they will have breached the escort agreement.
3. Rules
Given the sensitive nature of escort services and the stringent industry regulations, you should establish clear rules and expectations that you require your escorts to follow. You must outline these guidelines within the escort agency contract.
4. Confidentiality and Privacy
A key concern for many of your clients will be the protection of their confidential and personal information.
Your clients are understandably concerned about the privacy of the services they request and their preferences.
Accordingly, your terms and conditions with the client will likely guarantee that you will keep their personal information confidential and refrain from disclosing the nature of the work.
As your escorts will have access to confidential and personal information relating to your clients, you must emphasise that they are prohibited from disclosing this information to any third party.
Ensure your employees are paid correctly with our free guide on how to prevent wage underpayment.
5. Termination
Including a termination clause in your escort agency contract will outline clear parameters for terminating the agreement if an issue arises. Of course, you will want to be able to terminate the escort agreement immediately if an escort breaches the agreement.
For example, suppose an escort does not provide the agreed-upon services or engages in behaviour that could cause harm to your clients. In that case, you may exercise the right to terminate the agreement promptly.
You may also include a right to terminate for convenience. This allows you to end the escort agreement without any party breaching the contract. In such cases, you simply need to give notice to the escort expressing your intention to terminate their contract.
6. Limitation of Legal Responsibility
You should use your escort agreement to limit your legal responsibilities in the event of something going wrong.
For example, if an escort engages in unprotected sexual intercourse, you want to safeguard your business from potential health-related consequences.
Accordingly, you should use the escort agreement as an opportunity to exclude your legal responsibility as much as possible. You can accomplish this by incorporating an exclusion of liability clause into your contract, stating that you are not responsible for certain issues that may arise in the event of an escort breaching the contract. This clause must be certain and specific, as an overly broad or vague clause may render the term invalid.
Continue reading this article below the formKey Takeaways
If you are engaging escorts as part of your escort service, you should draft an escort agreement to define the employment relationship clearly. The agreement should establish the obligations and responsibilities of each party to avoid the possibility of a dispute. You should include commercial terms such as:
- how much you will pay an escort;
- how long the agreement will last;
- obligations on the escort to behave in a particular way;
- the right to terminate the contract; and
- to limit your legal responsibility for the actions of the escorts.
If you need help with your escort agency contract, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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