Staffing agency license in Wisconsin: chapter 105 licenses and registrations

Wisconsin still regulates employment agents under chapter 105 of the Wisconsin Statutes, administered by the Department of Workforce Development. It uses two tiers: an agent that charges job seekers, including a modeling agency, needs a license, a $5,000 bond and an approved fee schedule, while an agent paid only by employers registers annually for $5. Temporary help services that meet the statute's conditions are excluded entirely. Professional employer organizations register separately with the Department of Financial Institutions.

The $5 registration sounds trivial, but skipping it has a real cost: a Wisconsin appeals court has held that a contract made by an unregistered employer-paid agent is void. This page covers both tiers, the temp exclusion, the fee caps for applicant-paid placements, penalties, PEO registration and the employer accounts a staffing firm needs. For other states, see employment agency license requirements.

License or registration: who needs which

The Department of Workforce Development's employment agency page confirms that agencies charging both employers and applicants must be licensed and registered, and that regulation "does NOT extend to temporary help agencies."

The temporary help exclusion and its conditions

Section 105.01(1) excludes temporary help services from the definition of an employment agent, but only if the firm:

• pays the workers' wages and payroll taxes;
• carries workers' compensation and liability insurance; and
• does not, in its contracts with workers, require "forfeiture or payment of any amount by the employee as liquidated damages upon the acceptance of permanent employment" with the client.

That third condition matters. A conversion fee the client pays you does not break the exclusion; a clause making the worker pay if they take a permanent job with the client does, and would pull the firm into chapter 105. I found no Wisconsin rule limiting conversion fees charged to clients. See temp-to-perm conversion fee for how those clauses are usually structured, and keep them on the client side of the contract.

Union hiring halls, theatrical and booking agents, and employment counselors are also excluded.

The employer-paid registration

Under § 105.06(2), an agent paid only by employers registers annually for $5. Under DWD 277.015, the registration runs July 1 to June 30 and covers all of the agent's locations. This is the filing most contingency and retained search firms working Wisconsin roles need, and it is easy to miss because it costs almost nothing.

The reason not to miss it: in Kleewood, Inc. v. Hart Design & Mfg., 2006 WI App 264, annotated under § 105.01, the court held a contract made by an unregistered employer-paid agent void. A firm that has not registered may be unable to enforce its fee agreement if the client refuses to pay. Register before you sign the client, and keep the registration current each July. A written agreement still does the commercial work; see the contingency recruiting agreement template.

The license for agents that charge job seekers

• Bond. A $5,000 surety bond (§ 105.06(1)).
• Fee. 1 percent of fees received, minimum $50 and maximum $300, plus $150 for each branch office (§ 105.07). A veterans fee waiver applies.
• Process. Application, bond and the minimum fee; the department may hold a public hearing on the applicant's character and premises (DWD 277.02).
• Term. Licenses expire June 30 each year (DWD 277).
• Individuals. The current definitions exclude employment counselors from "employment agent," and DWD 277 has no separate counselor license. An older Attorney General opinion read the law as requiring counselor licenses; I could not confirm that any individual license is still required.

Fee caps and rules for applicant-paid placements

Under § 105.11, an agent files a fee schedule and may change it only with department approval, may not charge a registration fee without permission, and may not charge applicants counseling fees. DWD 277.09 sets maximum applicant fees by class:

Under DWD 277.09 and 277.10, no fee is due until placement, refunds are paid within 10 days, no more than 60 percent of first-month earnings may be collected in the first 30 days, and confessions of judgment, promissory notes and wage assignments are banned. A contract may make the applicant liable if hired by a referred employer within six months, but not for any portion the employer agreed to pay.

Penalties

• Forfeitures of $10 to $100 per offense (§ 105.15).
• A department order to refund all fees collected while unlicensed (§ 105.16).
• Up to $5 per day for late filings, and suspension or revocation of the license.
• For employer-paid agents, the risk that matters most is the void contract described above.

PEO registration with DFI

The Wisconsin Professional Employer Organizations Act, chapter 202, subchapter III, requires registration with the Department of Financial Institutions to operate or advertise as a PEO or professional employer group. Temporary help companies are excluded.

• Fees. $75 application and $107 renewal, with a $25 late fee, per the DFI fee page. Registrations expire July 31; renewal opens June 1.
• Financials. An audited GAAP statement no older than 13 months, and working capital of at least $100,000 or a bond of at least $100,000 plus any negative working capital (§ 202.23).
• Small operations. Out-of-state PEOs with no Wisconsin office or solicitation and 50 or fewer Wisconsin employees register under a lighter tier without the financial test.
• Penalties. Up to $1,000 per violation (§ 202.06).

Employer accounts and other categories

• Workers' compensation. Required at three or more employees, or fewer with $500 in wages in a quarter (§ 102.04). A temporary help agency is the employer of its assigned workers, and its workers cannot sue the client in tort (§§ 102.04(2m), 102.29(6)). Uninsured employers face penalties starting at the greater of $1,000 or the premium for a first violation. See staffing agency insurance requirements.
• Unemployment insurance. Liability starts at $1,500 in a quarter or one worker in 20 weeks. The temporary help company is the employer (§ 108.065). Under § 108.04(2)(i), a claimant last employed by a temp firm who was told in writing at hire to contact the firm about assignments, and did not, is presumed not to have searched for work that week, if the firm notifies the department within 10 business days. Put that notice in the onboarding packet and calendar the reporting window.
• Home care placement agencies. Must give written notices on who the employer is and who handles taxes and insurance, and keep signed copies four years (§ 105.115).
• Migrant labor contractors. Need an annual DWD certificate (§ 103.91); I could not confirm the current fee.
• Registration. Entities register with DFI, and the Department of Revenue business tax registration is $20 initially and $10 to renew.

I found no Wisconsin registration for nurse staffing agencies other than the old nurses registry class in DWD 277. For the neighboring regime that repealed its license, see Minnesota.

A Wisconsin checklist

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

Model:
  [ ] Employer-paid search/contingency: $5 DWD registration each July
  [ ] Candidate-paid fees: license, $5,000 bond, fee schedule (DWD 277.09)
  [ ] Temp help: meets all 105.01 conditions; no worker liquidated damages
  [ ] Co-employment of client workforce: DFI PEO registration

Employer accounts:
  Workers' comp (3+ employees or $500/quarter)         [ ]
  UI account; written check-in notice at hire          [ ]
  DOR business tax registration                        [ ]
Next review: [date]