Establishing secure connection…Loading editor…Preparing document…

HR Managed Services Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

HR MANAGED SERVICES AGREEMENT

This HR Managed Services Agreement (the Agreement) is made and entered into as of Effective Date: by and between Client Name: , Client Address: , and Service Provider Name: , Provider Address: .

1. Definitions and Interpretation

Capitalized terms used in this Agreement have the meanings assigned in this Section unless the context otherwise requires. "Services" means the HR managed services described in Section 2. "Confidential Information" means non-public business, personnel, payroll, benefit, and technical information disclosed by a party that is designated confidential or that reasonably should be understood to be confidential.

2. Scope of Services

The Provider shall perform HR managed services including, but not limited to, payroll administration, benefits administration, employee relations support, recruitment coordination, policy drafting and compliance assistance, HRIS administration, and reporting as described below. Specific deliverables, service windows, and frequencies are set forth in the statement of work and service schedules attached or described in the fields below.

3. Service Levels and Performance

Provider will perform the Services in a professional manner consistent with industry standards. Provider shall meet the service levels identified in the service level schedule. Where service credits are applicable, remedies shall be limited to those credits and exclusive of other remedies except for breaches of confidentiality or data protection.

4. Term and Termination

The initial term of this Agreement shall commence on Start Date: and continue for a period of months, unless earlier terminated as provided herein. Thereafter the Agreement shall renew automatically for successive renewal periods of unless either party provides written notice of nonrenewal at least days prior to the end of the then-current term.

Either party may terminate this Agreement for material breach by the other party if such breach remains uncured for a period of thirty (30) days after receipt of written notice specifying the breach. Either party may terminate for convenience upon providing the notice period stated above and payment of all fees due through the effective date of termination.

5. Fees, Invoicing and Payment

6. Confidentiality and Data Protection

Each party shall use reasonable administrative, physical and technical safeguards to protect Confidential Information. Provider shall implement safeguards appropriate to protect Personally Identifiable Information and payroll data consistent with industry standards. Provider shall not disclose Confidential Information except to employees, contractors, or auditors who have a need to know and who are bound by confidentiality obligations no less restrictive than those set forth herein.

7. Intellectual Property

Each party retains ownership of its pre-existing intellectual property. Materials created by Provider specifically for Client under this Agreement shall be owned by Client upon full payment, except for Provider's underlying tools, methodologies, templates and software, which remain Provider's exclusive property. Provider grants Client a nonexclusive, nontransferable license to use Provider-owned materials solely for Client's internal business purposes.

8. Warranties, Disclaimers and Limitations

Provider warrants that the Services will be performed in a professional and workmanlike manner consistent with generally accepted industry standards. EXCEPT AS EXPRESSLY PROVIDED, THE SERVICES ARE PROVIDED "AS IS" AND PROVIDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY EXCEED THE FEES PAID OR PAYABLE BY CLIENT TO PROVIDER IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM, EXCEPT FOR LIABILITY ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR BREACH OF CONFIDENTIALITY.

9. Indemnification and Insurance

Each party shall indemnify and hold harmless the other party from third-party claims arising from the indemnifying party's breach of this Agreement, negligence or willful misconduct. Provider shall maintain commercial general liability, professional liability, and workers' compensation insurance in amounts appropriate to the Services and shall provide certificates of insurance upon request.

10. Subcontracting and Personnel

Provider may use subcontractors to perform portions of the Services provided that Provider remains responsible for all obligations under this Agreement. Provider warrants that its personnel performing Services have appropriate skill and background. Provider shall ensure that personnel conducting background checks or handling payroll data have undergone appropriate screening.

11. Background Checks and Employee Verification

Provider is authorized to perform employment verification and background checks on Provider personnel assigned to Client, and to facilitate background checks on Client candidates if engaged to do so. Client authorizes Provider to contact Client's prior employers and references as necessary to perform Services where requested by Client. Provider will comply with applicable laws governing background checks and privacy.

12. Compliance with Laws and Equal Opportunity

Each party shall comply with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. Provider affirms it is an equal opportunity provider in its employment practices and will not discriminate in providing Services.

13. Change Orders

Material changes to the Scope of Services or to fees shall be documented in a written change order signed by authorized representatives of both parties. Change orders shall describe the change, any impact on fees or schedule, and the effective date of the change.

14. Notices

All notices required or permitted under this Agreement shall be in writing and delivered to the contacts designated below by hand, certified mail, or email to the address provided.

15. Miscellaneous

This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior understandings. Amendments must be in writing and signed by authorized representatives. If any provision is held invalid, the remainder shall remain effective. This Agreement shall be governed by the laws of the jurisdiction specified below.

16. Client Representations and Authorization

Client represents that it has the authority to engage Provider and to provide employee data and other information required to deliver the Services. Client authorizes Provider to obtain, verify and use information about Client's employees to the extent necessary to perform Services and to comply with applicable law.

17. Acknowledgment

By signing below, the parties acknowledge that they have read, understand and agree to be bound by the terms and conditions of this Agreement and that the individuals signing are authorized to bind their respective parties.

Client Printed Name:

By:

Date:

Title:

Service Provider Printed Name:

By:

Date:

Title:

Enter text✕

What an HR Managed Services Agreement Covers

An HR Managed Services Agreement is a contract where a company engages a third-party provider to deliver defined human resources functions — for example payroll administration, benefits enrollment, recruiting support, compliance monitoring, and employee relations. The agreement sets scope, performance standards, service levels, pricing, data handling rules, confidentiality, termination conditions, and transition obligations so both parties understand responsibilities during the engagement.

Why use a formal HR Managed Services Agreement

A written agreement clarifies roles, reduces regulatory risk, ties vendor performance to remedies, and documents data protection and confidentiality obligations required for payroll and personnel records.

Why use a formal HR Managed Services Agreement

Who typically signs and relies on this agreement

The HR Managed Services Agreement is used by organizations that outsource HR functions and by the service providers who deliver them; it helps align expectations and compliance obligations.

  • CHROs and HR leadership at mid-market and enterprise employers who need centralized SLAs and data controls.
  • Outsourced HR providers, PEOs, and payroll vendors that must define permitted uses of employee data.
  • Legal, compliance, or procurement teams reviewing indemnities, data processing, and termination provisions.

Use the agreement to document data flows, identify subcontractors, and set audit, security, and breach-notification procedures before services begin.

Core sections to include in a professional agreement

A comprehensive HR Managed Services Agreement should address scope, service levels, pricing and payment, data protection, regulatory compliance, and exit/transition arrangements to limit operational and legal exposure.

Scope of Services

Clearly list tasks and deliverables (payroll, benefits admin, recruiting, compliance reporting) and exclude items to avoid ambiguity.

Service Levels

Define response times, accuracy targets, uptime, penalty or remediation steps, and reporting cadence for performance measurement.

Data Protection

Specify handling of PII/PHI, encryption standards, breach notification timelines, and requirement for a Business Associate Agreement if HIPAA applies.

Pricing and Fees

Detail fee structure (per-employee, per-transaction, flat retainer), billing cycle, and chargebacks for errors or missed SLAs.

Subcontracting

Require disclosure and approval of subcontractors, and flow-down of confidentiality and security obligations to any third party.

Termination & Exit

Include termination for convenience and cause, transition assistance, data return/secure deletion, and final reconciliation procedures.

Step-by-step: completing the agreement

Follow these steps to prepare, review, sign, and store the HR Managed Services Agreement with clear responsibilities and compliance checks.

  • 01
    Draft: Populate parties, scope, fees, and data clauses based on selected service modules.
  • 02
    Review: Legal and HR validate indemnities, insurance, and regulatory language.
  • 03
    Negotiate: Agree on SLAs, remediation, and exit costs; log changes in redline.
  • 04
    Execute: Obtain authorized signatures and retain the signed copy in secure records.

Configuring the digital signing workflow

Set up an e-signature workflow that matches signing order, authentication level, and post-sign distribution requirements.

Field Configuration
Signing Order Define sequential or parallel signing per role
Authentication Choose email link, SMS code, or stronger verifier
Attachment Include exhibits and evidence of authorization
Audit Trail Enable timestamps, IP, and certificate capture

Typical e-sign and delivery flow for HR contracts

Understand the linear flow from upload to archival so signatures are attributed and records are reproducible for audits.

  • Upload Document: Place the agreement PDF or DOCX into the signing platform.
  • Place Fields: Add signature, initials, date, and required data fields.
  • Send to Signers: Distribute by email or signing link per workflow settings.
  • Complete & Store: Signed PDF with audit trail is saved to secure storage.

Technical considerations for digital execution

Choose a platform that supports required file types, authentication methods, audit trails, and integrations with HRIS and document storage.

  • File Formats: PDF, DOCX, and versioned exports
  • Integrations: Connect to HRIS, payroll, and cloud storage
  • Security: Support TLS/AES encryption and audit logs

Confirm the vendor's compliance posture (HIPAA BAA if PHI involved, SOC 2, ESIGN/UETA conformance) and retention options before finalizing the workflow.

Supporting documents to bundle with the agreement

Include operational exhibits and compliance attachments so the HR Managed Services Agreement functions as a complete playbook for daily operations and audits.

Service Exhibit

Detailed task list, frequency, and owner assignments that translate contract language into operational steps and measurable outputs.

Security Addendum

Technical and organizational measures, encryption, incident response, and any required Business Associate Agreement if handling PHI.

Pricing Schedule

Fee table with calculation examples for onboarding, per-employee charges, and ad hoc services to avoid billing disputes.

Transition Plan

Steps, timeline, and data export format for winding down services or switching vendors without service interruption.

Required contract and data-security items

Encryption: TLS 1.2/1.3; AES-256 at rest
Audit Trail: Timestamped logs capturing signer identity and IP
BAA Availability: Business Associate Agreement if HIPAA applies
Access Controls: Role-based access and strong authentication
Certifications: SOC 2 Type II and ISO 27001 preferred
Retention Policy: Document retention and secure deletion processes

Practical tips for accurate and efficient completion

Small adjustments during drafting and execution reduce disputes, speed onboarding, and simplify audits.

Standardize Definitions
Use consistent defined terms (e.g., "Confidential Information", "Effective Date") to avoid interpretation gaps across exhibits.
Use Checklists
Require a pre-signing compliance checklist covering data access, subcontractor approval, and insurance certificates.
Limit Boilerplate Risk
Negotiate unilateral indemnities and insurance limits early to prevent late-stage delays.
Document Approvals
Record procurement and legal sign-off to demonstrate authority and reduce execution challenges.

Common mistakes to avoid

  • Vague scope language that leads to scope creep and unexpected charges for additional services.
  • Omitting data-processing obligations or a BAA when handling payroll-linked health information.
  • Failing to require vendor-subcontractor flow-downs for security and confidentiality.
  • Not defining exit assistance, which can cause operational disruption and data access disputes at termination.

Consequences of an incorrect or incomplete agreement

Regulatory Fines: HIPAA penalties or state privacy fines for inadequate safeguards
Tax Exposure: Incorrect payroll handling can trigger IRS adjustments and penalties
Contractual Damages: Liquidated damages or indemnity obligations for SLA failures
Operational Disruption: Service gaps during vendor transition without clear exit terms
Reputational Harm: Data breaches impacting employee trust and brand
Audit Findings: Failed audits requiring corrective actions and oversight

Timeline items and typical processing expectations

Track execution milestones and post-sign deadlines including onboarding, data transfers, and initial service-level measurement windows.

Execution Date:

Effective Date as signed by both parties

Onboarding Window:

30–90 days for data migration and systems integration

Initial SLA Review:

First 30–90 days to validate performance against targets

Billing Commencement:

Specify billing start (e.g., first full payroll cycle after go-live)

Transition Period:

30–120 days post-termination for data transfer and cutover

eSignature pricing and capability comparison

Compare starting prices and select features for common eSignature vendors; signNow is listed first per comparative convention.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by promotion Varies by promotion Varies by promotion Varies by promotion
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Representative use cases and client outcomes

Real-world examples show how organizations use HR Managed Services Agreements to speed processes and ensure compliance.

Optica Ventures

The interface simplified execution for internal teams and customers alike.

  • Rapid adoption across deal teams.
  • As COO Brian Fitzgibbons reported, easier signing reduced turnaround and improved clarity on responsibilities during vendor transitions, helping close deals faster while maintaining documentation for audits.

Fertility Centers of Illinois

Flexible signing supported multiple formats and integrations.

  • Improved workflow reliability.
  • John Butler noted the API and support made it possible to route HR contracts into core systems securely and maintain an auditable history for regulatory review.

FAQs and troubleshooting for common issues

Answers to frequent questions about completing, signing, and enforcing HR Managed Services Agreements electronically.


Need help? Contact support

be ready to get more
Join over 28 million airSlate SignNow users