Staffing agency license in the District of Columbia: even employer-paid recruiters need one

Yes, and the District of Columbia reaches further than most states. D.C. Code § 32-402 bars anyone from operating an employment agency, an employment counseling service or an "employer-paid personnel service" in the District without a license, so a contingency recruiter paid only by clients needs one just as much as an agency that charges job seekers. The Department of Licensing and Consumer Protection (DLCP) issues it as the Employment Services category of the basic business license. Temporary staffing firms that never place workers permanently are exempt; executive search firms are not.

This page covers who needs the license, what DLCP asks for, the operating rules, limits on fees charged to job seekers, the separate DC Health license for nurse staffing agencies, PEOs, and District laws aimed at staffing firms. For other jurisdictions, see employment agency license requirements.

Who needs a DC employment services license

The chapter dates from 1985 (D.C. Law 5-136) and is still in force. Section 32-401 covers three kinds of business "in the District": an employment agency, which procures jobs or workers for a fee charged at least partly to job seekers; an employment counseling service, which charges job seekers for career advice but does not procure jobs; and an employer-paid personnel service, which procures job seekers for employers for a fee and "is compensated solely by employers."

Executive search gets only a partial carve-out. Section 32-401(3) says an employer-paid executive search firm recruiting for executive, managerial or professional positions is not an employer-paid personnel service "except for the purposes of" § 32-402(a), § 32-406(e)(6), § 32-408 and § 32-414(a): the license requirement, a consumer-protection cross-reference, the anti-discrimination rule and the penalty for operating unlicensed. A retained search firm still needs the license but skips the record-keeping and advertising rules.

The staffing exemption, § 32-416(1), covers an employer "who directly hires and compensates employees for the exclusive purpose of furnishing part-time or temporary help to others and does not in any way offer or attempt to place the employees in permanent jobs with any other employer." Other exemptions cover resume writers, nonprofits that charge no fee, labor organizations and government agencies.

One open question: I found no DLCP guidance on whether a recruiter based in Maryland or Virginia that fills District jobs remotely needs the license, and DLCP ties licenses to premises. If that is you, ask DLCP in writing.

What DLCP asks for

Section 32-402(e) makes the license an Employment Services endorsement to a basic business license. DLCP's page lists three activities (Employer-Paid Personnel Service, Employment Agency, Employment Counseling Service), applications through its BOSS portal, and these requirements: a certificate of occupancy or home occupation permit, corporate registration if applicable, tax registration and a Clean Hands certificate, plus a contract and a surety bond, both marked not required for an employer-paid personnel service.

Fees. DLCP lists $49 for six months, $99 for two years and $198 for four years, the flat fees it now charges across license categories under the BEST Act, which DLCP says was funded from October 1, 2024. The statute has not caught up: § 32-402(a)(5) still reads "an annual license fee of $500," and the section shows no amendment since 2005. I could not confirm how DLCP reconciles the two; its published schedule is what it lists.

The statute calls for a notarized application listing every District office and its manager, the owners or officers, and 10 years of business experience, and requires rejection for a fraud or deceptive-practice conviction within 10 years. The license must be posted where clients can see it.

Employment counselor licenses. Section 32-402(b) also requires each individual who interviews or advises job seekers for a covered firm to hold a personal license and pass an examination. DLCP's page does not mention it, and I could not confirm whether DLCP issues it today. Ask before assuming your recruiters are covered by the firm's license.

Operating rules for licensed firms

Section 32-406 applies to employer-paid personnel services (not to carved-out executive search):

• Advertising file: keep every ad, dated, showing the licensed business name.
• No ghost postings: advertise an opening only with a bona fide employer order on file.
• Records for four years: job seekers interviewed, job orders, referrals and placements.
• No poaching your placements: do not induce a worker to leave a job you placed them in.

Section 32-409 changes how submittals work: a licensed firm needs a job seeker's "express written authorization" before disclosing their name, home address or phone number to anyone other than the Mayor. Get written consent before sending a profile to a client. Section 32-408 bars refusing service on grounds including race, sex, age, sexual orientation, gender identity, personal appearance and family responsibilities.

Under § 32-414, operating unlicensed is a misdemeanor: up to $1,000 for each day, up to a year in jail, or both. After a hearing, the Mayor may fine a firm $100 to $1,000 per violation, order restitution, or suspend or revoke the license. I could not find implementing regulations for the chapter in the DC Municipal Regulations.

Limits on fees charged to job seekers

If anyone other than an employer pays you, you are an employment agency, and §§ 32-403 and 32-404 apply:

• Bond: $100,000 if your average job-seeker fee is $2,000 or more and you sign 100 or more contracts a year; otherwise $50,000.
• Filed fee schedule, changed on 30 days' notice, and a plain-language written contract with a three-day right to cancel.
• No registration fee or advance payment, and no fee unless you arranged an interview.
• Refunds: if the job ends within 12 weeks through no fault of the worker, you keep 1/12 of the fee per week worked; if the worker is fired for cause or quits without just cause, the cap is 75% of the fee.

Nurse staffing agencies: a DC Health license

The Nurse Staffing Agency Act of 2003, D.C. Code § 44-1051.01 et seq., requires a DC Health license before an agency provides registered or practical nurses, certified nurse aides, home health aides or personal care aides to a health care facility or agency for temporary work in the District. D.C. Law 22-110 (2018) clarified that a business offering only a registry of nursing personnel needs no license, and D.C. Law 23-238 (effective March 16, 2021) limits agencies to supplying facilities and agencies, not individuals.

• Term: one year; if you fail to renew, you must stop supplying staff on the expiration date.
• Fees: under 22-B DCMR § 4902, as compiled by DC Health, $1,000 initial, $500 renewal, $100 late fee.
• Timing: apply 90 days before you start and renew 90 days before expiration.
• Insurance: malpractice and general liability of at least $1 million per occurrence and $3 million aggregate each. See staffing agency insurance requirements.
• Procedures: § 44-1051.15 requires written procedures for credentials, references, competency, complaints, health testing, drug screens and background checks.

The DC Health license does not replace DLCP's. A nurse staffing firm that also makes permanent placements loses the § 32-416(1) exemption.

PEOs: no DC registration law found

The Council held hearings on B24-0305, the Professional Employer Organization Registration Act of 2021, which would have had PEOs register with the Department of Insurance, Securities and Banking. I found no enacted PEO registration law in the D.C. Code as of October 2026.

Other DC rules for staffing firms

• Assignment notices. § 32-1008.01 requires a signed notice at hire and a written notice for each assignment: payday, pay rate, overtime rate, the client's name and location, expected length, safety equipment and who carries workers' compensation.
• Joint liability. § 32-1303(6) makes the staffing firm and its client jointly liable for wage, living wage and sick leave violations.
• Noncompetes. Since October 1, 2022, § 32-581.02 bars noncompetes for employees below the highly compensated threshold ($150,000 initially, indexed from 2024). Keep conversion terms in the client contract, not the worker's.
• Criminal records. Employers with more than 10 District employees may ask about convictions only after a conditional offer (§ 32-1342), and "employment" includes work through a temporary agency.
• Pay ranges. See DC pay transparency law.

Employer accounts

Register for unemployment insurance and paid family leave with the Department of Employment Services, carry workers' compensation, and register with the Office of Tax and Revenue. The full sequence is in how to start a staffing agency. The District is the outlier in its region: Maryland ended employment agency licensing, the last of it in 2013 (see staffing agency license in Maryland), and Virginia in 1996 (see staffing agency license in Virginia).

A District of Columbia checklist

DISTRICT OF COLUMBIA CHECK — [date] — owner: [name]

Model:
  [ ] Employer-paid search or direct hire: DLCP Employment
      Services license (Employer-Paid Personnel Service)
  [ ] Retained executive search: same license
  [ ] Temp staffing, never places permanently: § 32-416(1)
  [ ] Temp-to-hire or conversion fees: license
  [ ] Any job-seeker fee: Employment Agency license, bond,
      filed fee schedule, 3-day cancel contract
  [ ] Recruiters: employment counselor license? (ask DLCP)

Licensed firms:
  [ ] Written consent before sharing candidate contact info
  [ ] Ad file; no ad without a job order; records 4 years

Health care:
  [ ] DC Health nurse staffing license; $1M/$3M insurance

Temps:
  [ ] Hire and assignment notices (§ 32-1008.01)

Employer accounts:
  DOES UI and paid leave; workers' comp; OTR; DLCP     [ ]
Next review: [date]

Re-check whenever your model changes: the first permanent placement takes a temp firm out of the § 32-416(1) exemption and into the license, the records and the consent rule.