Staffing agency license in Virginia: repealed in 1996, what applies now

Virginia does not license employment agencies, staffing firms or executive search firms. The employment agency chapter of the Code of Virginia was repealed in 1996, and nothing replaced it with a general license. If a checklist or vendor tells you Virginia requires an employment agency license and bond, that information is about thirty years out of date.

What does apply is mostly employer law: professional employer organizations register with the Virginia Workers' Compensation Commission, every staffing firm with more than two employees needs workers' compensation, and unemployment insurance runs through the Virginia Employment Commission. This page covers what was repealed, what survives, and what a staffing firm still has to set up. For states that do license agencies, see employment agency license requirements.

What was repealed

Virginia regulated employment agencies twice and repealed both regimes. The labor title's employment agency chapter, Title 40.1, Chapter 2, was repealed by Acts 1978, chapter 840. Licensing then moved to the professional and occupational regulation title, Title 54.1, Chapter 13, which was itself repealed by Acts 1996, chapters 61 and 179. The implementing regulations, 18VAC120-20, were repealed effective July 1, 1996.

The practical result as of October 2026:

I found no current Virginia statute capping fees charged to job seekers, requiring refunds, or limiting temp-to-perm conversion fees. Those terms are governed by your contracts and by general law. Virginia's ban on non-compete agreements with low-wage employees, Va. Code § 40.1-28.7:8, is not specific to staffing, and I could not confirm whether it reaches clauses that restrict temps from joining a client. Have counsel review any clause that limits where your workers can take a job.

PEO registration with the Workers' Compensation Commission

The one registration in this area is for professional employer organizations. Under Va. Code § 65.2-803.1, any business entity that wants to provide professional employer services "shall register with the Commission before any such services may be provided." The Commission's PEO FAQ and its regulations at 16VAC30-100 fill in the details:

• No flat fee. There is no filing or registration fee. PEOs instead pay an annual assessment, apportioned by the aggregate payroll of their co-employees, to fund registration and supervision.
• Annual report. Due by January 31 each year.
• Client notices. The PEO must notify the Commission and the Bureau of Insurance within 30 calendar days of new or terminated client companies.
• Coverage. The PEO must hold workers' compensation coverage in its own name and keep a Virginia designated representative; no bond or financial statement is required.
• Penalties. Civil penalties of $500 to $5,000 per instance of noncompliance under § 65.2-805, plus suspension, revocation or a cease-and-desist order.

A conventional temporary staffing firm, which recruits its own workers and assigns them to clients, is not a PEO. The registration matters if you also co-employ a client's existing workforce.

Workers' compensation: the requirement that does bite

Virginia employers with more than two regular employees must carry workers' compensation, and a staffing firm counts every temp on its payroll. The Code of Virginia, § 65.2-101, defines a "staffing service," and § 65.2-803.1 makes workers' compensation the exclusive remedy against both the client company and the staffing service where the staffing service has obtained the coverage. That protects your clients only if your policy is actually in force, which is why client contracts ask for certificates.

Failing to insure carries penalties of up to $250 per day, capped at $50,000, under § 65.2-805. See staffing agency insurance requirements for the policies clients usually ask for beyond workers' compensation, and joint employer liability for staffing agencies for how responsibility is split with clients more generally.

Unemployment insurance and other employer accounts

• Virginia Employment Commission. Open an unemployment insurance account. Under § 60.2-210, liability generally starts once you pay $1,500 in wages in a calendar quarter or employ someone in 20 different weeks of a year.
• Department of Taxation. Register for income tax withholding for the temps and staff you pay.
• State Corporation Commission. Form a Virginia entity or register a foreign one, and check for a local business license (BPOL) in the city or county where you operate.
• New hire reporting and I-9s. As the employer of record, these are yours, not the client's. The order of setup steps is in how to start a staffing agency.

Special categories to check separately

Some states regulate nurse staffing agencies, farm labor contractors or talent agencies even when they do not license general recruiters. For Virginia, as of October 2026:

• Health care staffing. I could not find a Virginia registration requirement for temporary nurse staffing agencies. A 2023 bill to study regulating them, SB 1458, failed. Check for newer legislation before staffing Virginia facilities, and expect facility contracts to carry their own credentialing requirements.
• Farm labor. I found no state farm labor contractor registration. The federal Migrant and Seasonal Agricultural Worker Protection Act still applies, and migrant labor camps need a Virginia Department of Health permit.
• Talent agencies. I found no talent agency license in Title 54.1.

If you expand into Virginia from a licensed state

Firms that already hold a license in a neighboring state with a live regime tend to carry that state's habits into Virginia. Some of those habits are worth keeping even though Virginia does not require them:

• Written candidate terms. If you ever charge a candidate anything, a written agreement with clear refund terms is the best protection in a state that sets no statutory refund rule, because a dispute will be decided on the contract and general consumer law.
• Signed consent to submission. Not a licensing rule anywhere, but the record that settles who introduced a candidate. The right to represent template covers it.
• Separate entity accounting by state. Your VEC experience rating and workers' compensation classifications are Virginia-specific, so keep Virginia payroll reportable on its own from the first week.

The reverse also matters. A Virginia-based firm that places candidates with employers in a licensing state, such as an employer-paid search desk working New York roles, should check that state's rules; Virginia's lack of a license does not travel with you.

Why firms still get asked for a Virginia license

Procurement teams and staffing vendor portals sometimes carry a field for a state agency license number across every state. For Virginia, the accurate answer is that no such license exists. Give the client your State Corporation Commission entity ID, your VEC account number, your workers' compensation certificate, and, if you operate as a PEO, your Workers' Compensation Commission registration, and cite the 1996 repeal. That is usually enough to close the question.

A Virginia checklist

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

Model:
  [ ] Employer-paid direct hire: no state license
  [ ] Candidate-paid fees: no license; contract reviewed by counsel
  [ ] Temp/contract, we employ: employer accounts below
  [ ] Co-employment of client workforce: PEO registration (65.2-803.1)

Employer accounts:
  Workers' comp in force (more than two employees)    [ ]
  VEC unemployment account                             [ ]
  Taxation withholding account                         [ ]
  SCC entity and local BPOL license                    [ ]

If a PEO:
  Registered before first client                       [ ]
  Annual report by January 31                          [ ]
  Client changes reported within 30 days               [ ]
Next review: [date]