Staffing agency license in Minnesota: what survived the 2015 repeal

Minnesota does not license employment agencies, staffing firms or search firms as of October 2026. The license, fee and bond sections of Minnesota Statutes chapter 184 were repealed in 2015. What is left is a set of conduct rules for agencies that charge job seekers, a conditional carve-out for employer-paid search firms, a 2024 law that voids no-hire clauses in staffing contracts, and separate registrations for employee leasing companies and supplemental nursing agencies. Each matters more than the missing license.

This page covers what the 2015 repeal removed, which chapter 184 rules still bind you, the search firm conditions, the 2024 restriction on stopping clients from hiring your workers, and the employer registrations a staffing firm still needs. For how Minnesota compares with states that do license agencies, see employment agency license requirements.

The license that no longer exists

Minnesota used to license fee-charging employment agencies through the Department of Labor and Industry, with a surety bond for each location. The 2015 omnibus law, 2015 Minnesota Laws chapter 54, repealed those sections under the heading "fee employment agencies." On the current chapter 184, § 184.22, subd. 1 (the license requirement) and §§ 184.25 to 184.36 (the application, fee and bond sections) are marked repealed. The same law removed "without first procuring a license" from the penalty section, so operating without a license is no longer an offense in itself.

Two leftovers can confuse a compliance review. The search firm subdivision still refers to a "licensed employment agency," and Minnesota Rules part 5200.0560 still says a temporary help service that charges a permanent placement fee, other than liquidated damages, "shall be licensed" as a fee employment agency. Both refer to a license the statute no longer provides. Read them as telling you which conduct rules apply, not as a filing you can make.

Who chapter 184 still covers

Under § 184.21, subd. 2, an employment agency is a business engaged for hire or compensation in furnishing job seekers with information about jobs, or employers with help finding workers. The definition excludes services that are peripheral to a business's primary activity where the job seeker pays nothing, and it excludes several categories outright: placement services exclusively for teachers, nurses or medical doctors; theatrical, booking, modeling and babysitting agencies; educational and labor organizations; resume services; and publications.

In practice the remaining rules bite on agencies that charge candidates. Most corporate recruiting and contract staffing firms charge only the employer, which puts them either outside the definition's practical reach or inside the search firm carve-out described next.

The search firm conditions

Section 184.22, subd. 6, says chapter 184 does not apply to a search firm that meets all of these conditions:

• It is paid only by the employer, under an agreement that names the position being filled.
• No candidate pays any fee, directly or indirectly.
• It does not solicit people it has placed to leave their jobs.
• It does no other employment agency activity.

A firm that fails a condition "shall be considered an employment agency" and takes on the chapter 184 conduct rules. Subdivision 7 adds that an employer may not make a placed candidate pay any part of the search fee, so a client that tries to claw back your fee from the new hire's pay creates a problem for itself, not a loophole for you. The solicitation condition is the one firms trip over: recruiting a person you placed back out of the client is inconsistent with the carve-out.

Fee rules for agencies that charge job seekers

Section 184.38 sets the rules for any agency that does charge applicants. There is no percentage cap, but there are firm limits on timing and refunds:

Violations of chapter 184 are misdemeanors under § 184.41, and the department may seek an injunction. If you never charge candidates and meet the search firm conditions, none of this table applies to you.

The 2024 ban on no-hire clauses

The Minnesota rule most likely to change a staffing contract is not in chapter 184. Minn. Stat. § 181.9881, enacted in 2024, says no service provider "may restrict, restrain, or prohibit in any way a customer" from soliciting or hiring the service provider's employee. "Service provider" is defined broadly as a business acting directly or indirectly as an employer or manager for work a customer contracts for, which covers staffing firms. Existing contract terms that violate the section are void and unenforceable, and the service provider must notify its employees of the section and of the offending clause. There is an exemption for workers providing professional business consulting for computer software development who seek permanent employment with the customer through the arrangement.

The statute does not say whether a reasonable conversion fee, as opposed to an outright no-hire clause, is a "restriction." That question was not resolved in the text as of October 2026. If your Minnesota client agreements carry a no-hire clause, remove it; if they carry a conversion fee, have counsel review it against this section. Temp-to-perm conversion fee covers how these clauses are usually drafted elsewhere.

Employee leasing and PEO registration

Minnesota has no general PEO licensing act. Instead, Minn. Stat. § 79.255 requires an employee leasing business to register with the Commissioner of Commerce before it can obtain workers' compensation coverage. The fee is $100 for a registration or exemption certificate. A firm that supplies temporary workers and does no lease-back of a client's own employees can apply for an exemption certificate instead. A firm whose coverage was terminated within the last five years for premium avoidance is ineligible, and registrants may not mention the registration in advertising. The statute does not set a renewal period that I could confirm.

For unemployment insurance, § 268.046 assigns a PEO the client's tax account and requires it to notify the Department of Employment and Economic Development within 30 days when a contract starts or ends.

Employer registrations every staffing firm still needs

• Workers' compensation. Required of every Minnesota employer. The Department of Labor and Industry's fact sheet on temporary and leased employment says the temporary agency and its client are jointly responsible for coverage, and lists penalties of up to $1,000 per employee per week for going uninsured. See staffing agency insurance requirements.
• Unemployment insurance. Register with DEED under § 268.042. Minnesota defines a "staffing service" in § 268.035, and under § 268.095 a temporary worker who does not ask for a new assignment within five days of finishing one can be treated as having quit, but only if the worker signed a written notice of that rule at hire. Put that notice in your onboarding packet.
• Business registration. Register your entity, or a foreign entity, with the Secretary of State and open withholding tax with the Department of Revenue. The order of operations is in how to start a staffing agency.

Supplemental nursing services agencies

Health care staffing is the one area where Minnesota still requires a registration before you place anyone. Agencies that supply nurses, nursing assistants, aides or orderlies to health care facilities register annually with the Department of Health under §§ 144A.70 to 144A.74, separately for each location. As of October 2026 the statute lists a nonrefundable registration fee of $2,442, and the application must show a $10,000 employee dishonesty bond, malpractice insurance and workers' compensation coverage. These agencies may not restrict their workers from taking employment with a facility or charge liquidated damages or employment fees when a facility hires a worker permanently, with fines of up to $3,000, and rates charged to nursing homes are capped at 150 percent of a weighted average wage.

A Minnesota checklist

MINNESOTA CHECK — [date] — owner: [name]

Model:
  [ ] Employer-paid search: meets all four 184.22 subd. 6 conditions
  [ ] Any fee charged to candidates: 184.38 fee rules, fee schedule filed
  [ ] Temp/contract staffing, we employ the worker
  [ ] Nurses or aides to health care facilities: MDH registration (144A.71)

Contracts:
  No-hire clauses removed (181.9881)                 [ ]
  Conversion fee reviewed by counsel                  [ ]
  Employee notice sent if old clause existed          [ ]

Employer accounts:
  Workers' comp in force                              [ ]
  Commerce registration or exemption (79.255)         [ ]
  DEED UI account; 5-day assignment notice signed     [ ]
  Revenue withholding account                         [ ]
Next review: [date]

Re-check if you start charging candidates, add health care staffing, or begin recruiting people you previously placed, since each can change which of these rules apply.