Payroll funded Friday. It always does. Your people worked, the hours were approved, the money left the account. Now the oldest invoice on that client is past forty-five days, their AP line goes to voicemail before the second ring, and your account manager does not want to blow up a relationship that still has people on assignment. Somebody over there has already said the check run moved.
Here is the short answer. Two different files hide inside “our client won’t pay.” Unpaid temp invoices land in the strongest category Texas gives a commercial creditor — “personal service rendered” and “labor done” are named in both the sworn-account rule and the attorney’s-fee statute. A backdoor hire is a different animal: no statute creates a placement fee, so that claim rises or falls on your contract and your evidence of the introduction. Both reward moving in weeks.
The reason to move fast is not moral. It is arithmetic.
Why this is a solvency problem, not a receivable problem
Every other vendor your client stiffs extended credit on paper. You extended it in cash. You fund gross wages, employer taxes, and comp premium weekly, and you bill net-30 or net-60. You are carrying their labor cost out of your own bank, and the balance grows every Friday the assignment keeps running.
So the first decision is not legal. It is whether you keep lending. Read what your service agreement says about suspension and about your right to stop placing while the account is past due — that clause, not a demand letter, is the fastest brake you have. If the agreement is silent, stopping work carries contract risk — a conversation with counsel before it is a conversation with the client.
Fact pattern one — the client stops paying temp invoices
You are in the strongest category Texas recognizes
Texas has a procedure built for claims like yours: the suit on sworn account. Rule 185 reaches an action founded on an open account or other claim for goods, wares and merchandise, “or is for personal service rendered, or labor done or labor or materials furnished, on which a systematic record has been kept.” Personal service rendered. Labor done. Systematic record. That is a description of your business.
When the claim is supported by the affidavit the rule describes — that the claim is, within the affiant’s knowledge, just and true, that it is due, and that all just and lawful offsets, payments and credits have been allowed — the account “shall be taken as prima facie evidence thereof, unless the party resisting such claim shall file a written denial, under oath.” Rule 185 adds that a defendant who does not timely file that sworn denial “shall not be permitted to deny the claim, or any item therein.”
That is the point of the device. A client who has spent weeks not returning calls has to put a signature and an oath behind the objection, on the court’s schedule. What was vague on the phone has to become specific, in writing, under oath.
The catch is the systematic record — and that is where staffing agencies do better than almost anyone, if the files are clean. Approved timesheets naming the worker, the week, and the approver. Rate confirmations. Invoices that tie line by line to those weeks. If your timesheet approvals live only in a portal, export them now, while you still have a live login to the client’s account.
Attorney’s fees, and the 30-day clock most creditors never start
Texas lets a person recover reasonable attorney’s fees, in addition to a valid claim and costs, when the claim is for rendered services, performed labor, furnished material, a sworn account, or an oral or written contract, among other listed categories (Tex. Civ. Prac. & Rem. Code § 38.001(b)). A staffing claim usually qualifies under several of those at once. The statute excludes a quasi-governmental entity authorized to perform a function by state law, a religious organization, a charitable organization, and a charitable trust — worth checking on healthcare, education, and social-services accounts.
Section 38.002 is the part that gets skipped. Three things must be true: the claimant is represented by an attorney, the claim was presented to the opposing party or a duly authorized agent, and payment for the just amount owed was not tendered before the expiration of the 30th day after the claim is presented.
Presentment costs nothing and starts a clock. A dated written demand that states the amount and identifies the invoices does the job — the wording is worked through clause by clause in who pays the lawyer on a Texas unpaid invoice. Send it, keep proof of delivery, and diary the thirtieth day. Waiting until a lawyer is retained to present the claim spends a month of leverage on nothing.
Interest, stated carefully
If your agreement says nothing about interest, Tex. Fin. Code § 302.002 provides that a creditor who has not agreed with the obligor to charge interest “may charge and receive from the obligor legal interest at the rate of six percent a year on the principal amount of the credit extended beginning on the 30th day after the date on which the amount is due.”
Six percent is not a windfall. It is a number that makes waiting cost something. If your credit application sets a higher rate, note that Texas fixes a general maximum of 10 percent a year “except as otherwise provided by law” (Tex. Fin. Code § 302.001(b)), with other ceilings for commercial transactions. Confirm the rate with counsel, not with your invoice template.
What to pull before you call anyone
| Document | What it does for the file |
|---|---|
| Signed service agreement, credit application, POs | Establishes terms, rates, interest, venue, and any suspension right |
| Approved timesheets, week by week | The “systematic record” Rule 185 contemplates |
| Rate confirmations and assignment confirmations | Answers the “we never agreed to that bill rate” objection |
| Invoices with aging and payment history | Shows the account, and shows partial payments as acknowledgment |
| The full email thread with AP and the hiring manager | Where the excuses were made, dated |
| Your dated written demand | Presentment for § 38.002 |
Fact pattern two — the backdoor hire
The pattern is familiar. You submit a candidate. The client interviews, passes, goes quiet. Weeks later the candidate turns up on the client’s payroll — hired through a “referral,” into a different req, by an affiliate entity, or through another agency that mysteriously surfaced the same person.
Be clear-eyed here: no Texas statute entitles a staffing agency to a placement fee. This is a contract claim, start to finish. The upside is that a contract claim still carries attorney’s fees under § 38.001(b)(8), which covers an oral or written contract. The downside is that everything depends on your paper.
What these clauses usually address
Agreements differ, and yours governs. But fee-earning, candidate-ownership, and conversion terms usually turn on the same handful of questions. Know which ones your contract actually answers:
- What counts as an introduction or a submission, and whether it has to be in writing.
- How long the ownership window runs — from submission, from the last interview, or from the end of an assignment.
- How the conversion fee is calculated, and whether it pro-rates as the temp’s tenure builds.
- Whether the term reaches hires by parents, subsidiaries, affiliates, or a competing agency the candidate is routed through.
- Whether the obligation survives termination, and whether you have any notice or audit right that would let you learn about a hire at all.
Evidence is what decides these files
Where these claims run into trouble, it is usually on proof of the introduction rather than on the wording of the clause. Build that proof out of what already exists: the dated submission email, the resume transmittal, the terms attached to or referenced in it, the client’s reply, the interview scheduling. A candidate submitted verbally at a job fair, or hand-carried by a hiring manager who has since left, is the hard version of this file.
Then there is proving the hire happened. The candidate can often confirm it, and public announcements and start-date details fill in the rest. When the hiring entity is an affiliate rather than the client you contracted with, the corporate-relationship question becomes the whole case — investigative work, the same skip tracing and asset investigation used when a client dissolves and reopens under a new name.
One honest distinction: a one-time conversion fee is not usually the kind of account “on which a systematic record has been kept,” so a backdoor-hire claim is generally pleaded as breach of contract, even when your temp invoices to the same client would support a sworn account. Whether both routes are open on your facts is a question for counsel.
The four-year clock, and why it is not comfort
A suit on a debt must generally be brought not later than four years after the day the cause of action accrues (Tex. Civ. Prac. & Rem. Code § 16.004(a)(3)). A separate subsection sets the same four years for an action on an open or stated account, or on a mutual and current account concerning the trade of merchandise between merchants, and fixes accrual on the day the dealings in which the parties were interested together cease (§ 16.004(c)). Which subsection governs a services account changes when the clock starts, not how long it runs.
Either way, four years is a deadline, not a plan. What ends most staffing files is not limitations. It is that the client’s cash went to the creditor who pushed hardest, or that the entity you billed was wound down while the business keeps operating under a new name. Neither waits four years to happen.
One rule that runs in your favor
The federal Fair Debt Collection Practices Act defines the debt it governs as a consumer’s obligation arising out of a transaction primarily for personal, family, or household purposes (15 U.S.C. § 1692a(5)). Tex. Fin. Code § 392.001(2) draws the same line, defining “consumer debt” as an obligation primarily for personal, family, or household purposes arising from a transaction. An invoice one business owes another for staffing services is not that, which is why business-to-business collection works differently — direct contact with principals rather than scripted consumer notices, and a field visit to the debtor’s place of business where that is warranted.
That is not a license. Fraud, defamation, and ordinary business-tort exposure have no business-to-business exemption. If an owner personally guaranteed the account, ask counsel which rules apply before anyone contacts that individual.
What to do this week
- Date the file. When was the last service performed, and the last dollar received? Every clock here runs from something, and partial payments matter.
- Assemble the record in the table above, and export anything that lives only in the client’s portal.
- Force the dispute into daylight. Ask AP, in writing, to confirm invoice by invoice which are approved and which are disputed. Silence is a useful fact. A named dispute is one you can work on — see how to collect unpaid invoices for the sequence.
- Present the claim in writing and diary the thirtieth day (§ 38.002).
- Set the escalation date now and keep it. The expensive habit is granting one more cycle to a client that has used up several.
Staffing collections reward treating the second missed cycle as a decision point, not an inconvenience. If that point has passed, ASA handles commercial staffing files on contingency, with the fee agreed before you place anything — and when it makes sense to hand an account over is worth reading first.
General information for commercial creditors, not legal advice. Laws and deadlines change and depend on the facts — confirm specifics with qualified counsel.