Opinion No. 76-189 (1976) Ag ( 1976 )

EMPLOYMENT AGENCIES — ASSIGNMENT OF CONTRACT TO FINANCE COMPANY First, an employment contract can be assigned at any time after its making to a finance agency; however, the finance agency cannot become a holder in due course until such time as the temporary employment period shall have run and permanent employment is established. Second, in the event an employment contract is assigned to a finance agency, the applicant for employment is liable to the finance agency only for an amount not greater than the statutorily established placement fee. The Attorney General is in receipt of your request for an opinion wherein you ask, in effect, the following questions: 1. Under the provisions of 40 O.S. 54 [40-54](b) (1971), when may an employment contract made between an employment agency and an individual, be assigned to a finance company? 2. Under the provisions of the same statute, what rate of interest, if any, may be charged by the finance agency? The statute in question provides, in pertinent part, as follows: "No finance company or other purchaser of employment contracts shall be considered a holder in due course of such paper until after the temporary employment period shall have run and permanent employment shall have been established, and in no event shall the applicant for employment be liable for any charge to a finance company in addition to the legal placement fee as hereinabove set forth." In answer to your first question, the statute does not prohibit the assignment of employment contracts to finance agencies at any particular time. Rather, the statute only prohibits the finance agency from assuming the status of a holder in due course until such time as the temporary employment period (40 O.S. Section 52h[40-52h] [40-52h]) shall have run and permanent employment is established. The answer to the second question is apparent from a plain reading of the statute. Under the terms of the statute, the applicant for employment is not liable to a finance agency for any charge in addition to the legal placement fee, which is defined in 40 O.S. 54 [40-54](a). It is obvious from a plain reading of this statute that the applicant for employment is liable to the finance agency for the statutorily established placement fee. It is, therefore, the opinion of the Attorney General that your questions be answered as follows: First, an employment contract can be assigned at any time after its making to a finance agency; however, the finance agency cannot become a holder in due course until such time as the temporary employment period shall have run and permanent employment is established. Second, in the event an employment contract is assigned to a finance agency, the applicant for employment is liable to the finance agency only for an amount not greater than the statutorily established placement fee. (JAMES C. PECK) (ksg) ** SEE: OPINION NO. 77-123 (1977) **