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An escort agency facilitates the provision of sex work services to clients. These services are usually made available through the phone or via a website at premises not made available by the escort agency. The escort and sex work industry is highly regulated. It is therefore crucial that you understand the relevant laws when operating and advertising your services. This article will discuss the legal considerations you should have when starting an escort agency.

Key Legal Considerations

If you are looking to start an escort agency, there are several legal issues to consider, including:

  • business structure;
  • licencing;
  • advertising regulations;
  • employment agreements and a staff handbook;
  • escort agency contract; and
  • website documents.

Business Structure

When starting any business, it is crucial to consider your business structure. This is because your business structure affects your:

  • responsibilities;
  • tax;
  • asset protection;
  • liability; and
  • business costs.

The four main business structures and their advantages and disadvantages are summarised below.

Structure Advantages Disadvantages
Sole trader

You have control over the business and can keep the profits made by the business.

Few tax formalities.

Simple and cost-effective to set up.

While you personally gain all profits, you also incur all losses.

Inflexible and does not accommodate a growing business.

Personal assets are at risk.

Partnership

Simple and relatively inexpensive to set up.

Easy to share responsibility and finances with resources from more than one person.

Partners are both responsible for any debts of the business.

Personal assets are at risk to settle debts.

Company

Ideal if you are looking to scale and grow your business.

Separate legal entity means you have limited liability.

Easy to bring on investors.

Expensive to register and there are ongoing costs involved.

Regulated by legislation and a Company Constitution or Replaceable Rules.

Trust Offers asset protection and tax advantages.

Difficult and expensive to set up.

Challenging to sell and make changes to or change structures.

 

Licencing

The legal regulations and licencing regimes concerning escort agencies vary in different states and territories in Australia. Some states and territories, including Victoria, the Northern Territory and the Australian Capital Territory, require you to apply for a licence before you start operating or managing an escort agency business.

In Victoria, you must apply for a sex work service provider’s licence through the Business Licensing Authority. Your application must specify that you plan on operating an escort agency. You must also include the following supporting documentation:

  • details of your assets and liabilities;
  • a business plan;
  • a cash flow forecast for the first 12 months of the business;
  • a copy of the contract to purchase the business, if you are buying an existing business; and
  • a copy of the lease, or agreement to transfer the lease to you, if you will rent your business premises.

If you plan on operating your escort agency with other business partners or associates, each individual must have their own licence. Trading as an escort agency without the appropriate licences attracts serious penalties and possible imprisonment for up to five years.

Advertising Regulations

Similar to licencing requirements, state laws determine how you are permitted to advertise your escort agency services. Any advertising materials including brochures, business cards and photographs must:

  • be in an approved format;
  • contain the letters SWA (which stands for the Sex Work Act); and
  • your relevant licence number.

In Victoria, the law sets out advertising requirements relating to:

  • photographs or pictures of people. In particular, pictures must only show the head and shoulders of a person;
  • advertising material on the internet. In addition, any advertising must comply with certain content restrictions and you must obtain written consent from the person used in the advertising material;
  • form and size of print advertising; and
  • the text used in the advertising content.

Employment and Contractors Agreements and Staff Handbook

Whether you are engaging escorts as employees or independent contractors, you must have an employment agreement or independent contractors agreement in place. This agreement sets out the terms and conditions on which your escort workers provide services to the escort agency. Your agreement should detail:

  • the rights and obligations of both parties;
  • remuneration;
  • general standards including hours of work; and
  • entitlements and termination conditions as per the National Employment Standards (NES).

As an operator of an escort agency, you also have a number of obligations, regardless of whether you have employees, independent contractors, freelancers or casual staff. You are required to provide a:

  • safe working environment, free from violence and intimidation and without risk to health for employees, sub-contractors and clients; and

For example, this may involve allowing a sex worker to stop working if they feel unsafe and providing safety systems for escort workers.

  • safe environment for your sex workers, office staff and contractors as well as clients and visitors.

You should, therefore, have detailed communication and safety practices in a staff handbook. Such practices could include:

  • confirming arrival and departure times;
  • maintaining regular contact with your employees;
  • ensuring employees have a working mobile phone and are contactable;
  • hygiene practices that must be followed;
  • maintaining client confidentiality; and
  • procedures to report a potentially violent or unsafe situation.

Escort Agency Contract

It is best practice to have terms and conditions in a written escort agency contract between your business and your clients. Your escort agency contract should contain a few key terms.

Description of Services

You should ensure your services are clearly described to minimise potential misunderstandings with clients. This also offers your employees more protection.

Your Client’s Undertakings

Your clients should be over the age of 18, observe safety practices and not use violence.

Legal Responsibility

Ideally, you want to limit your liability, or legal responsibility, as much as you can under the law.

Payment Terms

Your terms and conditions must state:

  • your fees;
  • when a client needs to pay (you may request payment upfront); and
  • how they can pay (for example, cash, credit card or a third party payment gateway like PayPal).

Termination

You should state how an escort or client can terminate the contract. The contract should also detail how termination may affect payment. To ensure the safety of your escorts, you should specify that escorts have the right to refuse any practices or requests from clients.

Dispute Resolution

In the event of a misunderstanding or dispute, your contract should set out the steps to deal with and resolve the dispute.

Website Documents – Terms of Use and Privacy Policy

If you are attracting clients through a website, you should also have a website terms of use and privacy policy available on your website. A website terms of use document details the permissible and prohibited uses of your website. It should also state that anyone browsing your website must be over the age of 18. A website terms of use policy also protects your intellectual property and prevents users of your website from using your content without your permission.

If clients can request your escort services through an online form, they will most likely need to input their personal information such as their name and contact details. For the safety of your escorts, they will most likely need to also provide their health details. A privacy policy informs your website’s users what personal information you intend on collecting from them. It also outlines how you store such information and what you plan on doing with such information.

For example, whether or not you will be disclosing their information to any third parties.

Key Takeaways

Before starting an escort agency, it is important to choose the best business structure for your circumstances and have the essential legal documents drafted. These include employment agreements, an escort agency contract and relevant website documents. You should also be aware of and adhere to your state-specific regulations when operating and managing an escort agency. If necessary, you also need to obtain the appropriate licence. When advertising your services, you must comply with any requirements. If you are looking to start an escort agency and need assistance with the legalities, get in touch with LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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