Employment Services Industry Licensing Guide
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Alabama Employment Agency

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Licensing requirements for Alabama employment, staffing and talent agencies.

This page provides an overview of employment services licensing in Alabama for individuals and agencies. You will find state requirements, application fees, filing instructions, and more. For assistance with licensing, please contact us to learn about our software and managed license services.

Companies that provide employment services in Alabama must apply for a license prior to doing business. Depending on the services offered, businesses may need to apply for more than one license type, and in some cases, an individual license will be required as well.

Company Licenses

Alabama Employment Services Company Licenses

Companies acting as employment agencies in Alabama must obtain the following licenses before offering employment services. Applications usually require proof of incorporation or a certificate of authority.

Alabama Employment Agency License

Not required



Employment Agency licensure is not required on the State level in Alabama.

Alabama Professional Employer Organization Limited Registration

Agency:Alabama Department of Labor - Workers’ Compensation Division
Law:

AL Admin Code 480-5-7-.01

Foreign Qualification is Prerequisite:No
Financial Requirements:

A registrant must have and maintain, at all times, a net worth of not less than $100,000, as shown on the submitted audited or reviewed financial statements.

Insurance Requirements:

Proof of workers’ compensation insurance for each covered employee in Alabama from a carrier properly licensed by the Alabama Department of Insurance, from a self-insured group fund properly approved by the Alabama Department of Industrial Relations, or by individual self-insurance authority granted by the Alabama Department of Industrial Relations is required.

Notes:

Limited registrations are available to entities that:

  • Are domiciled outside the State of Alabama and registered or licensed as a
    professional employer organization in another state with substantially the same or similar
    requirements of those in Alabama;
  • Do not maintain an office in this state or solicit clients located or domiciled
    in Alabama; and
  • Do not have more than fifty (50) covered employees employed or domiciled
    in Alabama on any given day.
Registered Agent (Special Agency) Required?Yes
Fact Checked:6/1/21

Initial Registration

Filing Method:

Online

Agency Fee:

$500

Required Attachments:
  • A financial statement setting forth the financial condition of the professional employer organization as of a date not earlier than 180 days prior to the date submitted to the department and audited or reviewed by an independent certified public accountant licensed to practice in the jurisdiction in which such accountant is located, prepared in accordance with generally accepted accounting principles.
  • A complete and current listing of all client employers located in Alabama or who have worksite employees that work in Alabama or are residents of Alabama
  • A list, by jurisdiction, of each name under which the registrant has operated in the preceding five (5) years
  • An organizational chart of the registrant if part of a group/multiple professional employer organization majority owned by the same parent, entity or persons
Fact Checked:6/1/21

Registration Renewal

Filing Method:

Online

Agency Fee:

$250

Due:

Annually by the date of issuance.

Fact Checked:6/1/21

Alabama Professional Employer Organization Registration

Agency:Alabama Department of Labor - Workers’ Compensation Division
Law:

AL Admin Code 480-5-7-.01

Financial Requirements:

A registrant must have and maintain, at all times, a net worth of not less than $100,000, as shown on the submitted audited or reviewed financial statements.

Insurance Requirements:

Proof of workers’ compensation insurance for each covered employee in Alabama from a carrier properly licensed by the Alabama Department of Insurance, from a self-insured group fund properly approved by the Alabama Department of Industrial Relations, or by individual self-insurance authority granted by the Alabama Department of Industrial Relations is required.

Registered Agent (Special Agency) Required?Yes
Qualifying Individual Requirements:

Registrants must list a controlling person who is: "An officer or director of a corporation operating as a professional employer organization, a shareholder holding 25 percent or more of the voting stock of a corporation operating as a professional employer organization, a partner of a partnership operating as a professional employer organization, an individual who possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of a company operating as a professional employer organization through the ownership of voting securities, by contract or otherwise, and who is actively involved in the day-to-day management of the company."

Fact Checked:6/1/21

Initial Registration

Filing Method:

Online

Agency Fee:

$1,000

Notes:
  •  In the event a Professional Employee Organization does not meet the $100,000 net worth requirement as demonstrated by audited financials, the Director may require a registrant to post a security amount in the form of a cash deposit with the Alabama State Treasury, or other security subject to the approval of the Director, to secure the payment of all unemployment taxes and workers’ compensation claims payments due to or with respect to covered employees.
  • Financial statements
    • A registrant must have and maintain, at all times, a net worth of not less than $100,000, as shown on the submitted audited or reviewed financial statements.
    • Must provide a certified GAAP audit dated within 180 days of the application date.
    • Waivers:  Any new PEO in business for less than one year may request a waiver of the audit or review procedures for financial statements. The Department of Labor will have discretion whether to allow or disallow the waiver.There are absolutely no waivers after the orgaization’s first year of existence
    • If you do not meet the financial requirements, a cash deposit or other security may be used at the state’s discretion.
  • Qualified individuals - The state may review the application and request additional documents, forms, materials, and information as are reasonably necessary to confirm the qualifications of the controlling persons.
Required Attachments:
  • A financial statement setting forth the financial condition of the professional employer organization as of a date not earlier than 180 days prior to the date submitted to the department and audited or reviewed by an independent certified public accountant licensed to practice in the jurisdiction in which such accountant is located, prepared in accordance with generally accepted accounting principles.
  • A complete and current listing of all client employers located in Alabama or who have worksite employees that work in Alabama or are residents of Alabama
  • A list, by jurisdiction, of each name under which the registrant has operated in the preceding five (5) years
  • An organizational chart of the registrant if part of a group/multiple professional employer organization majority owned by the same parent, entity or persons
Fact Checked:6/1/21

Registration Renewal

Filing Method:

Online

Agency Fee:

$500

Due:

Annually by the date of issuance.

Fact Checked:6/1/21

Alabama Talent Agency License

Not required



Talent Agency licensure is not required on the State level in Alabama.

Employee Leasing Company - Enter into leasing contracts with other businesses that require labor. The leasing company loans its workers to the lessee while still providing specified responsibilities, such as workers compensation insurance, to the employees. This includes long term (6 months or more) temporary arrangements but often excludes temporary help arrangements. Unlike professional employer organizations, employee leasing companies are contracted when an employer needs to hire staff and does not want to handle human resources responsibilities.

Employment Agency - An entity that, for compensation, procures or attempts to procure employment for a person.

Professional Employer Organization - PEOs take on the human resources role for businesses and act as a co-employer in the sense that the client company's workers are administratively employees of the PEO but functionally these employees are controlled by the client company. Unlike employee leasing companies, PEOs are contracted when an employer already has staff and does not want to handle human resources responsibilities.

Staffing Agency - An entity that procures temporary or part-time employment for a person who then works under the supervision of a worksite employer.

Talent Agency - An entity that, for compensation, procures or attempts to procure employment or placement for an artist. (Certain art forms are excluded)

American Staffing Association
Staffing, recruiting, and workforce solution industry advocacy group.

National Association of Personnel Services (NAPS)
Education and training oriented association for personnel services providers.

National Association of Professional Employer Organizations (NAPEO)
Provides advocacy efforts, information, and other services to members of the employment industry.

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