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How do staffing companies work legally?

Staffing companies work to successfully link job seekers with positions with a client company. Because of the nature of their type of work, staffing companies run into a variety of potential legal issues. In order to function properly (and legally), staffing companies must understand the laws that they must follow.

Here are a few common legal issues that staffing companies may run into:


Contracts are a critical part of the routine businesses conducted by staffing companies. The staffing company must have airtight contracts with employing company and should include clauses that cover:

  • Number of hours worked before the employer will hire a temporary employee
  • Terms of employment
  • Options for dispute resolution
  • NDA
  • Comply with Federal Laws

There are several federal statutes that outline exactly how a staffing company must function. For example, a staffing agency cannot discriminate against gender, age or race.

Properly Classify Workers

Many staffing agencies prefer to classify employees as independent contractors. However, this may not be the most appropriate classification. The federal government is especially interested in proper classification because statistics prove that independent contractors are less likely to report self-employment taxes.

Legal Assistance

Staffing companies can be a great resource for individuals who are looking for work. However, this type of businesses requires a bit more legal leg work.

If you’re looking for some help, check us out. We offer a marketplace of fully vetted attorneys that can help you with all stages of business development.

Best of luck!