The proliferation of agency employment in Pakistan is a serious labour problem (APLC 2004; Khan & Kazmi 2003; Samad & Ali 2000; Zaman 2004), and a public policy concern because of the potentially negative implications for agency workers’ basic statutory rights and ensuing social inequities (Haque 2004; Klennert 1992; NSCL 1992). It is suggested that agency employment takes two distinct forms in Pakistan. The first may be termed pay-rolling agencies – this is potentially an attempt by employers to bypass statutory obligations concerning workers’ statutory benefit entitlements and trade union rights, simply by paying workers through an agency. The second form constitutes agencies which are genuine in nature and perform a traditional agency role. This paper discusses issues surrounding blurring organisational boundaries in relation to the use of agency employment. Moreover, it pulls together pertinent theoretic arguments in explaining the difference between motives behind the adoption of pay-rolling and traditional agency systems.