It depends on the state and the kind of staffing. Many states do not license general temp staffing firms. Several do license employment agencies, especially ones that charge job seekers. A number of states license or register nurse and healthcare staffing agencies. Every state requires the basics. A registered business. An employer ID. Unemployment insurance and workers' comp accounts. State tax registration. Check with your state's labor department. Talk to a lawyer before you take the first order. This post is not legal advice.
What to check, in order
1. Does your state license this kind of staffing? Search your state labor department's site for "employment agency license." If you place nurses or allied health workers, also search "nurse staffing agency license" and "supplemental nursing services agency." Some states require one, some require registration, some require nothing for temp staffing.
2. Do you charge job seekers? If you ever charge the worker a fee, more states require a license. Some ban it. Most staffing firms charge only the client and avoid this entirely.
3. Are you an employer of record? For temp staffing, yes. That means payroll tax registration. A state unemployment insurance account. Workers' comp coverage. And a plan for I-9s and health coverage rules.
4. What insurance will clients require? General liability, workers' comp, and often professional liability and a fidelity bond. Clients in healthcare and manufacturing will ask for certificates before the first order.
5. Local rules. A city business license. In some cities, there are also rules on pay transparency, scheduling and paid leave. They apply to your workers.
The one thing founders forget
Not the license. The checking. In year one, the founder is the recruiter, the salesperson, the payroll clerk and the compliance manager. Every submittal, every confirmation and every worker file gets checked by the same person, usually at night. Some firms plan for that from day one. They keep a written list per client and read every file against it. Those firms grow without the quality dropping. Firms that do not find out at the gate.
Where M-Tracker fits
A small firm can set up two things on day one: the list per client, and the check against it. In M-Tracker, the client's requirements live with the project. Each submittal or worker file is read against them before it goes out, with a plain-words note on what is missing. The founder stops being the only check without hiring a compliance team yet.
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Questions people ask
Do I need a license to recruit for direct-hire placements?
Some states treat fee-charging employment agencies differently from staffing firms. Check your state's rule for "placement" or "employment agency."
Can I start as a sole proprietor?
You can. Most owners form an LLC or corporation instead, for liability reasons and because clients expect it.
How long does setup take?
Usually a few weeks for registrations and insurance, longer where a state license is required. Start before you sign the first client.
Work you can trust, without redoing it.
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