Staffing agency license in Illinois: state and Chicago rules

Illinois licenses private employment agencies statewide under the Private Employment Agency Act, 225 ILCS 515, through the Illinois Department of Labor, and regulates temporary staffing separately under the Day and Temporary Labor Services Act, 820 ILCS 175. On top of both state laws, Chicago requires its own day labor agency license for firms operating in that category inside city limits, and domestic worker and home care placement can trigger a third license from the Illinois Department of Public Health. A firm that only checks one of these against its business model is likely to miss at least one requirement that actually applies to it.

This page goes deeper than the general hub on Illinois specifically: the counselor license alongside the agency license, the separate temp-staffing registration, Chicago's day labor overlay, and the IDPH dual-licensing rule for domestic placement. It complements employment agency license requirements, which covers Illinois at a higher level alongside four other states.

The Private Employment Agency Act: who needs it, who is exempt

The Private Employment Agency Act, 225 ILCS 515, requires a license from the Illinois Department of Labor for agencies that place candidates for a fee, and a separate license for the individual counselors who work in them. The Department's own FAQ states the key exemption: consulting or recruiting firms compensated solely by an employer to identify, appraise or recommend an individual are excluded, except theatrical and domestic service agencies, which stay covered regardless of who pays.

As of September 2026, the FAQ lists a $5,000 bond, annual agency license fees from $250 to $500 depending on counselor headcount, and counselor licenses requiring a written exam on the Act, a $50 application fee and a $25 annual renewal. Only placement fees and commissions may be charged, and a fee schedule is filed with the application. Call the Private Employment Agencies Information Hotline, 312.793.1804, if your model does not clearly fit the exemption.

Temporary staffing is a separate registration

The Day and Temporary Labor Services Act, 820 ILCS 175, requires day and temporary labor service agencies to register with the Department, and bars clients from using an unregistered agency. As of September 2026, the Department lists a $3,000 annual registration fee per agency plus $750 per branch office. This registration runs alongside, not instead of, the Private Employment Agency Act license if your firm's model also includes fee-based direct placement; check the Act's definition of day or temporary labor to see whether your specific placements fall within it before assuming one registration covers your whole business.

Chicago layers its own day labor agency license on top

Inside Chicago, a day labor agency needs a city license from the Department of Business Affairs and Consumer Protection in addition to the state registration. The application for that regulated business license requires a copy of the applicant's license issued under the state's Day and Temporary Labor Services Act, so the city step is built to confirm the state step is already done rather than to replace it. Chicago's municipal code also defines "day labor agency" to exclude not-for-profit organizations, a carve-out worth checking if your placement work runs through a nonprofit entity. If you open a Chicago location for any other category, direct placement, contract staffing outside the day-labor definition, or domestic placement, confirm separately whether the city requires its own business license for that activity, since day labor is the category with the clearest, specifically named city overlay.

Domestic worker and home care placement: two licenses, not one

Illinois treats agencies that place household and home care workers as a dual-licensing case. The Illinois Department of Public Health licenses two categories: Home Services Agencies, which directly provide non-medical home care, and Home Services Placement Agencies, which place workers who become the client's own employees. A Home Services Placement Agency must also be dually licensed by the Illinois Department of Labor as a Private Employment Agency. In practice, an agency placing housekeepers, companions or home health aides into private homes in Illinois should expect to hold both the IDPH license and the state employment agency license, not one or the other, and should confirm both directly rather than treating either license as sufficient on its own.

Penalties for operating without the right license

Placing candidates through an unlicensed private employment agency, or assigning day or temporary labor through an unregistered agency, exposes both the agency and, under the Day and Temporary Labor Services Act, the client that used it, since the Act specifically bars clients from using an unregistered agency. Chicago's municipal licensing framework carries its own separate penalty structure for operating a regulated business, including a day labor agency, without the required city license. Confirm every layer, state agency license, state temp-labor registration, and city license where one applies, before your first Illinois placement rather than after a client asks to see your credentials.

Fees you can charge candidates

Under the Private Employment Agency Act, only placement fees and commissions may be charged to a candidate, and the fee schedule is filed with the state as part of the license application, so an Illinois agency cannot set candidate-side pricing unilaterally the way it might negotiate an employer-side fee. Employer-side terms are covered separately in how to negotiate recruitment fees.

A checklist before you place candidates into Illinois

ILLINOIS LICENSING CHECK — [date] — owner: [name]

Our model:
  [ ] Direct hire, employer-paid only, not theatrical/domestic (check PEAA exemption)
  [ ] Direct hire or contingency, we hold or charge candidate fees (PEAA license required)
  [ ] Day or temporary labor staffing (Day and Temporary Labor Services Act registration)
  [ ] Domestic worker / home care placement (IDPH + PEAA dual license)

Private Employment Agency Act, if applicable:
  Agency license fee paid ($250-$500 by counselor count)  [ ]
  Bond: $5,000 filed                                      [ ]
  Counselor license(s): exam passed, $50 + $25/yr renewal  [ ]
  Fee schedule filed                                       [ ]

Day and Temporary Labor Services Act, if applicable:
  Agency registration: $3,000/year                         [ ]
  Branch office registration: $750/year each                [ ]

Chicago, if operating inside city limits:
  Day labor agency city license (requires state license copy)  [ ]
  Confirmed any other city licensing for our specific model     [ ]

IDPH, if placing domestic/home care workers:
  Home Services Placement Agency license                    [ ]
  Confirmed dual PEAA license also filed                     [ ]

Next review: [date]

Re-run this whenever you add a service line, opening a Chicago branch, starting a temp desk alongside direct hire, or adding domestic placement, since each of those moves can add a license Illinois did not previously require of your firm.

Why firms miss a layer in Illinois specifically

Illinois is unusual among the states in this series for stacking three separate regulatory tracks, the Private Employment Agency Act, the Day and Temporary Labor Services Act, and, for domestic and home care placement, IDPH licensure, on top of a fourth: Chicago's own day labor agency license. A firm that checked its licensing position once, when it was purely a direct-hire desk, and never revisited the question after adding a temp-staffing division or opening a Chicago branch is the most common pattern behind a missed requirement here. The Illinois Department of Labor's own FAQ and hotline exist partly because so many firms call with a business model that sits across two or three of these categories at once, rather than cleanly inside one. Treat each new service line or new office as its own licensing question in Illinois, rather than assuming your existing Private Employment Agency Act license already covers it.