Massachusetts Agency Requires Licensure of Staffing Firms - From ASA

In a departure from over 40 years of practice, the Massachusetts Division of Occupational Safety has begun requiring staffing firms doing business within the commonwealth to become licensed. Previously, only firms charging candidates a fee for employment had to become licensed. Staffing firms providing temporary services and direct hire firms paid by clients only had to register.

DOS now contends that it misconstrued the licensing statute all along. DOS takes the position that, because the fees charged to clients exceed the wages paid to the temporary employees, staffing firms are indirectly charging temporary employees fees for employment -- thus triggering the licensing requirement.

In ASA’s view, there is no basis in the law for such an interpretation. If a firm is providing temporary help, it is excluded from the definition of “employment agency,” and thus need not be licensed -- regardless of whether it receives fees from candidates. Also, the definition of “fee” in the law does not change the fact that no fees are paid by applicants -- either indirectly or directly. The fact that firms charge clients more than what they pay assigned workers does not support DOS’s assertion that a fee is indirectly charged to assigned workers.

ASA’s lobbyist is working to persuade DOS to abandon its position. If such efforts are unsuccessful, a legal challenge may be warranted.

In the meantime, several staffing firms, faced with the prospect of losing their ability to do business in Massachusetts, have agreed to become licensed while reserving their right to challenge DOS’s interpretation of the law at a later date. Please advise ASA immediately if you are audited or otherwise contacted by the state regarding this issue.

American Staffing Association
277 S. Washington St., Suite 200
Alexandria, VA 22314-3675
703-253-2020
703-253-2053 fax
americanstaffing.net