How to Start a Staffing Agency in Washington: No Temp License, but 2025 Sales Tax on Staffing and a $2,000 Placement Agency Bond

Good news first: if you plan to start a staffing agency in Washington that places temporary workers, you do not need a state license for that work. RCW 19.31, the state's employment agency law, excludes temporary service contractors. The rest of the picture is less simple. Since October 1, 2025, temporary staffing is subject to retail sales tax under ESSB 5814. And if your agency earns fees from job applicants for placing them, you need a Department of Licensing (DOL) employment agency license, a $2,000 surety bond and a manager who passes the DOL exam.

This guide covers how to start a staffing agency business in Washington in the order you should do it, with the fees and deadlines we could verify as of October 2026. Where a figure needs confirming with an agency, we say so.

Informational content, not legal or tax advice. Staffing touches licensing, sales and business taxes, workers' compensation and worker safety, and the right answer depends on how your business is structured and paid. Talk with a Washington business attorney and a CPA before you sign client agreements or register for taxes.

What you need before you start

Gather these items first. Most delays come from a missing piece of one of them.

• A business name that meets Washington's naming rules and is not already on record with the Secretary of State
• A physical Washington street address for your registered agent, since PO boxes and private mailbox addresses are not accepted
• A budget that covers the $180 LLC filing fee, the $50 business license processing fee and any DOL fees if you place workers for a fee
• If you place workers for fees: a $2,000 surety bond, a general manager who can pass the $150 DOL exam, and a budget of $823 for a new main office license or $580 for a branch
• A written worksite hazard assessment process and an industry-hazard safety training plan that costs the worker nothing
• Client agreements that separate temporary placements, direct hires and any outsourced work, since each may be taxed differently
• Bookkeeping that tracks gross receipts by activity, because Washington's business and occupation (B&O) tax is measured on gross receipts

Step 1: Decide which kind of agency you are

This choice shapes every later step. A temporary staffing firm hires its own workers and supplies them to client businesses, which direct the day-to-day work. That model does not require a DOL employment agency license. A placement agency finds candidates for jobs and collects fees from those candidates. That model needs the DOL license under RCW 19.31.090 and 19.31.110.

Many owners run both. If you do, keep the two models separate in your contracts, invoices and books. A single client agreement that mixes temp placements with fee-based placements is harder to audit and easier to misclassify.

Step 2: Form your entity and check the name

Most owners form a limited liability company (LLC). File through the Corporations and Charities Filing System (CCFS) at https://ccfs.sos.wa.gov/. The LLC formation document is the Certificate of Formation with Initial Report, and the filing fee is $180. Before you file, search the Secretary of State's business records at https://ccfs.sos.wa.gov/#/BusinessSearch to check availability.

Under RCW 23.95.305, the name must include Limited Liability Company, Limited Liability Co., L.L.C. or LLC. It must be distinguishable from every other business name on record. It cannot contain bank, banking, banker, trust, cooperative, any combination of industrial and loan, or any combination of two or more of building, savings, loan, home, association and society. If you need time to decide, a name reservation lasts 180 days and costs $30.

Expedited service costs $100 per entity and is generally processed within three business days. The fee schedule lists same-day service at $150, but the Corporations Division currently charges front-counter same-day transactions received before 3:30 p.m. at the $100 expedited rate. It says it will post 30 days' notice on its website before the $150 fee takes effect. Confirm the current rate on the Secretary of State's site on the day you file.

Sole proprietors and general partnerships do not file with the Secretary of State. If you operate under your own name as a sole proprietor, skip this step and move on to the business license. You should still get advice on personal liability before you take on client work.

Step 3: Appoint a registered agent

Washington uses the term registered agent, and under RCW 23.95.415 every business must designate one. The agent may be commercial, registered with the Secretary of State, or noncommercial. The agent must consent to serve, supply an email address and have a physical street address in Washington State. PO boxes and private mailbox addresses do not qualify. You can change your registered agent or registered office later at no fee.

Step 4: Get your Unified Business Identifier through the Business License Application

The Business Licensing Service (BLS), inside the Department of Revenue, runs one statewide Business License Application. It issues the nine-digit Unified Business Identifier (UBI) and handles state and city endorsements in a single filing. Corporations, LLCs, LLPs and partnerships must file with the Secretary of State first, then submit the Business License Application.

A staffing firm usually needs this license. You need it if you plan to hire employees within 90 days, sell anything subject to sales tax, earn $12,000 or more in gross income per year, owe a tax or fee to the Department of Revenue, or operate under a name other than your full legal name. The processing fee is $50 to open a business, plus separate endorsement fees. Online applications take about 10 business days, and two to three weeks longer when city or state endorsements need approval. Mailed applications can take up to six weeks. File at https://dor.wa.gov/open-business/apply-business-license.

Step 5: Register a trade name if you use a brand

If your marketing name differs from your LLC name, register it as a trade name. The Department of Revenue's BLS handles trade names. The Secretary of State and your county do not. Expect $5 for each trade name, plus the Business License Application processing fee: $50 to open or reopen a business, or $10 when the filing is for another purpose, such as adding a trade name to an existing business. Details are at https://dor.wa.gov/manage-business/grow-business/register-trade-names.

Step 6: Plan for the sales tax on temporary staffing

Since October 1, 2025, temporary staffing is subject to retail sales tax under ESSB 5814. The state rate is 6.5%, and local rates are added on top. Confirm the combined rate for each location where you deliver services with the Department of Revenue at https://dor.wa.gov/.

The law exempts several arrangements. The Department of Revenue's temporary staffing guidance lists these as not taxable:

• Staff supplied to hospitals licensed under chapter 70.41 or 71.12 RCW
• Direct hires
• Independent contractors
• Paymaster arrangements
• Outsourcing to third-party contractors

Paymaster and outsourcing arrangements deserve a closer look because the facts of each deal decide the answer. Get a written answer from the Department of Revenue or your CPA before you adopt either model.

If you have been operating since October 2025 without collecting or reporting this tax, review the penalty relief program. For periods through December 31, 2026, the Department of Revenue waives penalties, but not tax or interest, for agencies that voluntarily report ESSB 5814 tax. Applications are due by September 30, 2027. Confirm the program details on the Department of Revenue site before you rely on them.

Step 7: Register for B&O tax and check city licenses

Washington has no corporate income tax, no personal income tax on wages and no franchise tax. Instead, almost every business pays the state B&O tax, a gross receipts tax with more than 50 activity classifications and no deduction for labor, materials or other costs. That means a wage-heavy business like a staffing firm can owe tax on the full amount billed to clients. Confirm which B&O classification and rate apply to your staffing activity with the Department of Revenue before you send your first invoice.

About 54 cities also levy their own B&O tax, which the Department of Revenue does not administer. Washington has 39 counties and 281 incorporated places, which are cities and towns. Check the cities where you have an office and where you place workers. Each city sets its own local B&O and license rules, so confirm them directly with each city's finance or licensing office.

Step 8: Get the DOL license and bond if you place workers for a fee

Skip this step if your agency only supplies temporary workers to clients and never charges job applicants. If you do charge applicants, apply for a DOL employment agency license. The current fees are:

Item	Fee or requirement
Main office license, new	$823
Main office license, renewal	$688
Branch office license	$580
General manager exam	$150
Surety bond	$2,000, issued by a surety company

The license expires June 30, so plan your renewal date and your bond renewal together. The general manager must pass the DOL exam, so schedule it before your target launch date. The fee schedule above does not include the application method, forms or exam scheduling, so confirm those with the Department of Licensing.

Step 9: Meet your safety and workers' compensation obligations

Under RCW 49.17, as added by 2021 c 37, a staffing agency must assess worksite hazards, provide industry-hazard safety training at no cost to the worker and pull workers from any hazard that has not been mitigated. Write your hazard assessment process before your first placement, and document each training session and each hazard decision. Those records are what you will rely on if a placement goes wrong.

Register with the Department of Labor and Industries (L&I) for industrial insurance, and with the Employment Security Department (ESD) for unemployment insurance. Confirm your registration requirements with each agency, since they depend on your entity type and payroll. If you supply farm labor, you also need an L&I farm labor contractor license and a bond of at least $5,000 under RCW 19.30.

Common mistakes to avoid

• Assuming temporary staffing needs a DOL license. It does not. Charging job applicants placement fees does.
• Skipping the sales tax analysis. The tax has applied since October 1, 2025. If you started before you checked, review the penalty relief program now.
• Using a PO box for your registered agent. The rule requires a physical Washington street address, so no mailbox service will satisfy it.
• Waiting on the UBI. If you plan to hire employees within 90 days, you need the license, and endorsements can add two to three weeks.
• Treating every arrangement the same for tax. Direct hires, paymaster arrangements and temp placements can be treated differently, so document which model each client uses.
• Forgetting city B&O. Cities where you operate may impose their own tax on top of the state B&O tax.
• Operating under an unregistered brand. A name other than your full legal name requires a Business License Application, so register it before you market under it.
• Paying for same-day service without checking the fee. The Corporations Division has announced a future $150 rate for same-day service, so confirm what you will pay on filing day.

What to expect after you start

Your results depend on your market, client mix and execution, so none of the timelines below is a promise. Based on the published processing times, you may expect the following:

• Entity formation: The Secretary of State does not publish a standard turnaround. Expedited filings are generally processed within three business days.
• UBI: About 10 business days online, and possibly two to three weeks longer with city or state endorsements. Mailed applications can take up to six weeks.
• DOL license: The timing is not part of the fee schedule above, so ask DOL before you set a launch date.
• Sales tax and B&O: Expect to spend several weeks setting up accounts and invoice templates, and make sure each invoice shows the right tax treatment.

Once you are open, put the annual cycle on your calendar. The LLC annual report costs $70 and is due by the last day of the month in which the LLC was originally formed, every year. It may be filed up to 180 days early. A late filing carries a delinquency fee, for a total of $95.

Next steps and resources

• Washington Secretary of State, Corporations and Charities Division: https://www.sos.wa.gov/corporations-charities
• Washington Department of Revenue: https://dor.wa.gov/
• Washington Small Business Development Center: https://wsbdc.org/
• SBA Seattle district office: https://www.sba.gov/district/seattle

Before you launch, schedule time with a Washington business attorney to review your client agreements and worker classification, and with a CPA to map your sales tax and B&O setup. Those conversations are worth having before your first client contract, not after your first audit. This article is informational only and does not replace advice from either professional.