If you run an escort service, you will need to engage your employees through an escort agency contract. This agreement will outline the terms of your business arrangement with the escort as either a contractor or employee, which will determine your: 

  • obligations to them; 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 best protect your business.

Confirming the Status of your Escorts

As a first step, you should consider whether your escorts are considered employees or contractors. This will depend on a variety of factors, including whether they:

  • have control over what work they do;
  • set their own hours;
  • are paid by invoice or wage; and
  • are employed on an ad hoc basis or expect ongoing work.

These are not definitive criteria. Instead, whether your escorts are employees or contractors relies on an overall assessment of these considerations.

For example, they can still be contractors if you set their hours but they have control over the work they do and you pay them by invoice.

Determining their legal status is important because tax, superannuation and other obligations vary depending on whether the escort is an employee or contractor. Generally, it is more beneficial to classify your escorts as contractors. This creates lower standards of care over your escorts and reduces your legal responsibility for their actions.

However, the fact that your escort agreement labels the escorts as contractors does not solely determine the true employment relationship under the law. This will depend upon the actual conditions of the relationship concerning the multiple factors outlined above. If you incorrectly classify your escort as an independent contractor when they are an employee (or vice versa), the Fair Work Commission or Federal Court may order you to pay:

  • fines; and
  • superannuation and other entitlements.

It is a good idea to keep records to support your decision if you engage escorts as contractors. This proof can be useful to protect your business if any disputes arise.

Key Terms to Include in Your Escort Agreement

After having determined the legal status of your escorts, you should form a clear and comprehensive escort agreement. This will help establish:

  • the obligations your business owes;
  • expectations you have of your escorts; and
  • your dispute resolution processes, in case any issues arise.

1. Fees and Payment Terms

Your escort agreement should clearly outline: 

  • how much you intend to pay your escorts; and 
  • what the payment terms are. 

These payment terms should outline when and how you intend to pay your escorts. There are a variety of ways you can choose to make payments, including:

  • an hourly or daily rate for their services; or
  • a percentage of the amount you receive from a client for their services.

For example, you might agree to pay your escorts 60% of the price charged to clients, payable on the last day of each month.

Generally, an escort should provide you with an invoice that includes:

  • their ABN; and
  • how much they are charging you.

Once you receive the invoice, you will need to pay it under the payment terms outlined in the escort agreement.

You should also consider whether transport costs will be: 

  • included in the fee you pay your escorts; or
  • paid by the escorts themselves.

This may depend upon how much you are paying your escorts.

2. Warranties and Representations

Your agreement should include a warranties and representations clause.

Warranties and representations refer to the escort’s statements that encourage you to form the contract. Therefore, these are statements on which you rely when engaging their services.

Including a provision in the contract to guarantee these statements will help to protect your business. This is because it makes the escort legally responsible for any losses or issues that 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 your employees. 

If you find out 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 strict regulation within the industry, you should establish rules that you want your escorts to follow. You must outline these guidelines within the escort agency contract. 

Some examples of rules you may want to enforce include:

  • to not be under the influence of alcohol or illicit drugs when performing the services;
  • to undergo regular testing for sexually transmitted infections and provide records of the results; and 
  • not engage in any reckless or foolish behaviour that could create a risk of injury to the escort, other employees or the client.

4. Confidentiality and Privacy

A key concern for many of your clients will be the protection of their confidential and personal information. 

For example, your client is unlikely to be comfortable with other people knowing what services they requested or what their preferences were. 

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. 

You should therefore ask the same of your escorts. They will have access to confidential and personal information relating to your clients. To meet your obligations, you will not want them to disclose this information to any third party.

5.Termination

Your escort agency contract should include a termination clause. This will outline clear parameters for a party to terminate 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, if an escort does not provide the services they agree to or behaves in a way that could cause harm to your clients. 

You may also wish to include a right to terminate for convenience. This means that you can terminate the escort agreement without a party breaching the contract. You would merely need to give notice to the escort that you would like to terminate their contract.

6. Limitation of Legal Responsibility 

You should use your escort agreement to try to limit your legal responsibilities if something goes wrong.

For example, if an escort engages in unprotected sexual intercourse, you do not want to be responsible for any related health consequences.

You should therefore use the escort agreement as an opportunity to exclude your legal responsibility as much as you can. This requires inserting an exclusion of liability clause into your contract, stating that you are not responsible for certain issues that may arise if the escort breaches the contract. This clause must be certain and specific, as it could be invalid if it is too broad and vague.

Key Takeaways

If you are engaging escorts as part of your escort service, you should draft an escort agreement to outline the employment relationship. 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 assistance drafting an escort agency contract for your business, contact LegalVision’s contract lawyers today on 1300 544 755 or fill out the form on this page. 

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