Staffing Agency Requirements
A staffing agency is subject to the same legal requirements as any other business operating in the United States. Individual states and cities may have their own requirements that vary from the federal requirements in regard to taxes and licensing. Due to the nature of the business, staffing agencies are often under the scrutiny of the Equal Employment Opportunity Commission and must take care to always work within the EEOC guidelines.
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Licensing and Insurance Requirements
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The local state or municipality in which a staffing company operates will have its own requirements for obtaining appropriate business licensing. Some areas also have minimum amounts of insurance that must be maintained for any commercial location.
In addition to required commercial insurance, staffing companies must maintain appropriate levels of workman's compensation insurance and general liability insurance.
Tax Requirements
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Staffing companies must pay federal and state taxes on their earnings. The majority of businesses will be responsible for paying taxes throughout the year based on estimated taxes owed. As a general rule, most companies will be required to pay estimated tax if they will owe more than $1,000 in taxes when they file the business tax form at the end of the year.
Some states require a tax similar to a sales tax on services provided by a business. In states with these requirements, staffing services typically fall under these rules.
In addition to business taxes, all employers must report and pay employment taxes. These include Social Security and Medicare taxes, federal income tax withholding, and federal unemployment taxes.
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Equal Employment Opportunity Commission Requirements
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A staffing company, like any other business with over fifteen employees, may not discriminate on the basis of race, color, religion, gender, national origin, age, disability or genetic information.
The relationship between a staffing agency and its client creates a bit of confusion in regard to who is responsible for meeting the requirements of the Americans with Disabilities Act. In 1997, the EEOC issued a report titled "Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms" that clarifies the reasonable accommodations that must be met for temporary or leased workers with disabilities. The nature of temporary staffing in particular requires many urgent positions to be filled, which often do not allow the time for making reasonable accommodations for workers with disabilities. In these cases, undue hardship can be cited, which allows reprieve from the ADA laws.
Fulfilling a last minute request from a client is the only exception in which a staffing company or temporary agency may opt to place an employee that does not have a disability over one that does. Meeting reasonable accommodations for those with disabilities is a joint responsibility between the staffing firm and the client company, and both parties can be held legally responsible if found in violation of ADA requirements.
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References
- Photo Credit tax time image by Tom Oliveira from Fotolia.com
