Staffing Compliance Checklist: Essential Steps for HR

A staffing compliance checklist is a list of the legal steps you must get right when you hire or use temporary, contract and staffing-agency workers: classifying workers correctly, paying wages and overtime, verifying work authorization, screening fairly, running background checks lawfully, keeping workers safe and keeping records. Use the checklist below whether you are a staffing firm or a company that brings in staffing-agency workers.

Who is responsible: staffing firm or client?

The answer is often “both.” The EEOC’s enforcement guidance on staffing firm workers (December 1997, still posted) says that if both the staffing firm and its client have the right to control the worker, they can be joint employers, as long as each meets the law’s employee-count threshold. It also says a staffing firm’s discriminatory assignment is not excused because the client asked for it, and the client can be liable too.

In practice, duties split like this in a typical temporary or contract arrangement where the staffing firm is the employer of record. Your contract can assign them differently, so write it down.

For how shared control can create legal exposure, see our guide to co-employment risks.

Checklist: contract and setup

• Written agreement names the employer of record and lists who handles pay, I-9, background checks, training, equipment, timekeeping and complaints.
• Agreement states that requests and referrals will be based only on job-related qualifications.
• Indemnity and insurance terms are reviewed by counsel, including workers’ compensation and liability coverage.
• Conversion terms are clear if the client later hires the worker directly (see our temp-to-hire conversion fee guide).
• A named contact on each side owns compliance questions.

Checklist: worker classification

• Decide employee vs. independent contractor before work starts, and document why.
• For tax purposes, apply the IRS common-law test, which weighs behavioral control, financial control and the relationship of the parties.
• For wage and hour law, follow the Department of Labor’s current rule. The DOL’s 2024 independent contractor rule took effect March 11, 2024, and the department published a new proposed rule on February 27, 2026. Check that page for the current status before relying on any test.
• Check state tests, which can be stricter than federal ones.
• Classify exempt vs. nonexempt correctly. As of October 2026, DOL lists the standard salary level for the white-collar exemption at $684 a week ($35,568 a year) and $107,432 a year for highly compensated employees. Salary alone isn’t enough: the job duties must also qualify, and some states set higher thresholds.
• Review classification again when a worker’s duties, hours or length of engagement change.

More detail: W-2 vs. 1099 for staffing firms and independent contractor compliance.

Checklist: hiring and onboarding

• Job requirements and screening criteria are written, job-related and applied the same way to every candidate.
• Postings include pay ranges where state or local law requires them (see pay transparency laws by state).
• Form I-9 is completed for every new employee. DOL’s I-9 page notes the requirement covers every employer that recruits, refers for a fee or hires someone for employment in the U.S.; follow USCIS’s Form I-9 instructions for deadlines and acceptable documents.
• E-Verify is used where your state or a federal contract requires it (see E-Verify requirements by state).
• Background checks follow the FCRA. The FTC’s employer guide requires a written disclosure in a stand-alone format, written permission, a pre-adverse action notice with a copy of the report and a summary of rights, then an adverse action notice. Check state and local fair-chance rules too.
• Required federal and state workplace notices are posted or delivered. DOL’s poster page points to its elaws Poster Advisor for federal requirements; state labor departments cover state posters.
• New workers get the client’s site rules, safety training and a contact for complaints on day one.

Checklist: wages, hours and overtime

• Pay at least the federal minimum wage of $7.25 an hour, or the higher state or local rate; when both apply, the employee is entitled to the higher one.
• Pay nonexempt workers at least 1.5 times their regular rate for hours over 40 in a workweek, plus any daily overtime your state requires.
• Count all hours worked, including required pre-shift meetings, training and time spent at a client site.
• When a worker has hours at more than one client in a week, check how your contracts and payroll handle combined hours for overtime.
• Bill rates and markups leave room for overtime, payroll taxes and required benefits (our staffing markup guide shows the math).
• Pay on the schedule your state requires and issue final pay on time.

Checklist: safety

• Under the OSH Act, employers have a general duty to provide a workplace free from recognized, serious hazards. Treat staffing-agency workers as part of your workforce for safety purposes.
• The contract states who provides site-specific training, protective equipment and medical surveillance.
• The staffing firm visits or reviews each new worksite and job before placing workers.
• Injuries are reported to both parties immediately, with one agreed owner for injury records.
• Workers know how to raise safety concerns without retaliation.

Checklist: records, data and AI tools

• Keep FLSA payroll records for at least three years and the timecards and rate tables used to compute wages for two years, per DOL’s recordkeeping fact sheet.
• Keep personnel and employment records for at least one year, as the EEOC requires, and one year from the date of any involuntary termination.
• Keep I-9 forms in their own file and follow USCIS retention rules.
• Limit access to background reports and personal data, and dispose of them securely.
• If you use automated screening or ranking tools, check local rules. New York City’s Local Law 144 requires a bias audit within one year before use, public audit information and notice to candidates 10 business days before use; the city began enforcing it on July 5, 2023. Illinois requires employers to give notice when they use AI in employment decisions under Public Act 103-0804, with implementing rules proposed in 2026.

How often to audit staffing compliance

These intervals are good practice, not legal deadlines. Use the DOL’s minimum wage pages and your state labor department to confirm current rates.

This is general information, not legal advice. Check with employment counsel for your situation.

How Careerscape can help

Careerscape is a U.S. staffing and recruiting firm. When you use our contract or temporary staffing services, we act as the employer of record for the workers we place and agree the split of compliance duties with you in writing.

Frequently asked questions