Health Care Staffing Agencies, Which States Require a License?

Healthcare staffing agencies have become the cornerstone of how the US healthcare system works. Staffing agencies are increasingly becoming where hospitals look for qualified and professional nurses. 

However, due to the healthcare industry’s increased reliance on staffing agencies, stricter regulations have been introduced for staffing agencies in the US. 

While you may be familiar with the compliance requirements for staffing agencies on a more general level, such as ensuring workers are paid the correct minimum wage or performing onboarding credentialing, healthcare staffing regulations complicate matters. 

Many US states now require health staffing agencies (sometimes called "nurse pools") to have a license and sometimes specify types of insurance they must hold. Moreover, states often have different reporting requirements and methods for auditing your staffing agency. Ultimately, each state’s regulations differ from the next, but compliance is vital. Depending on the state, non-compliance can lead to hefty fines and other penalties.

Knowing the licensing requirements for each state can be intimidating, so here is a list of states with healthcare staffing-specific regulations. Please note that regulations are updated constantly, so be sure to check with your state or legal counsel when expanding into a new state.

Colorado

Supplemental Healthcare Staffing Agencies Law (2022, Amended 2023)

• Applicability: Applies to agencies employing healthcare workers for temporary placements.
• Licensure: No licensure is required unless classified as an “employee leasing company.”
• Reporting: Biannual reporting is required.
• Insurance: Agencies must maintain professional liability insurance.

Connecticut

Act Concerning Temporary Nursing Services Agencies (2022)

• Applicability: Applies to agencies providing temporary nursing services, including advanced practice registered nurses.
• Licensure: Annual registration with the Department of Public Health.
• Reporting: Annual reporting required, including detailed financial and operational data.
• Contractual Requirements: Written agreements with healthcare facilities are required.

District of Columbia

Nurse Staffing Agency Act (2003)

• Applicability: Applies to agencies providing nursing personnel to healthcare facilities.
• Licensure: Mandatory licensure by the Department of Health.
• Credentialing: Verification of credentials is required before placement.
• Reporting: Agencies must report any disciplinary actions involving their personnel.

Florida

Health Care Services Pools Law & Nurse Registry Law

• Health Care Services Pools:
  • Licensure: Registration with the Florida Agency for Health Care Administration.
  • Reporting: No specific reporting requirements, but agencies must maintain proper documentation.
  • Credentialing: Background checks and license verification are required.
• Nurse Registry:
  • Licensure: Licensing is required for agencies placing nurses in healthcare facilities or homes.
  • Reporting: Must maintain records and report disciplinary actions.
  • Contractual Requirements: Compliance with extensive operational and documentation requirements.

Illinois

Nurse Agency Licensing Act

• Applicability: Applies to agencies placing nurses, including advanced practice registered nurses.
• Licensure: Required with the Illinois Department of Labor.
• Reporting: Monthly and quarterly reporting requirements.
• Contractual Requirements: Prohibits non-compete clauses for temporary placements; full disclosure of charges in contracts.

Indiana

Temporary Health Care Services Agency Law (2023)

• Applicability: Applies to agencies placing healthcare personnel, excluding physicians.
• Licensure: Annual registration with the Department of Health.
• Reporting: Must provide documentation of fees and contracts upon request.
• Insurance: Worker’s compensation and a dishonesty bond are required.

Iowa

Health Care Employment Agency Law (2022, Amended 2023)

• Applicability: Applies to agencies providing nursing services, excluding advanced practice registered nurses.
• Licensure: Registration with the Department of Inspections and Appeals.
• Reporting: Detailed reporting requirements, including submission of contracts and fees.
• Contractual Requirements: Agencies must comply with specific provisions regarding employee placements.

Kentucky

Temporary Staffing Agencies Law

• Applicability: This covers agencies that place healthcare workers on a temporary basis.
• Licensure: No specific licensure is required, but agencies must comply with labor and employment laws.
• Credentialing: Agencies must verify the licensure and credentials of all placed personnel.

Louisiana

Health Care Staffing Agencies Law

• Applicability: Regulates agencies placing healthcare workers, particularly in nursing homes and hospitals.
• Licensure: Required with the Louisiana Department of Health.
• Reporting: Agencies must maintain and submit detailed placements and employee credentials records.
• Contractual Requirements: Agencies are required to have clear contracts outlining terms of employment.

Maine

Temporary Nurse Staffing Agencies Law

• Applicability: Applies to agencies providing temporary nurse staffing services.
• Licensure: Required with the Maine Department of Health and Human Services.
• Reporting: Annual reporting, including detailed financial and operational data.
• Credentialing: Mandatory verification of licenses and ongoing education.

Maryland

Nurse Staffing Agencies Law

• Applicability: Covers agencies placing nurses in healthcare facilities.
• Licensure: Registration with the Maryland Board of Nursing is required.
• Reporting: Agencies must report disciplinary actions and maintain compliance with staffing ratios.
• Contractual Requirements: Contracts must include specific terms regarding employee conversion and fees.

Massachusetts

Healthcare Staffing Agencies Law

• Applicability: Applies to agencies placing healthcare personnel, particularly in long-term care facilities.
• Licensure: Required with the Massachusetts Department of Public Health.
• Reporting: Detailed reporting requirements, including employee work hours and pay rates.
• Contractual Requirements: Agencies must comply with state-specific labor laws and contractual obligations.

Minnesota

Temporary Health Care Services Law

• Applicability: Regulates agencies placing healthcare personnel temporarily.
• Licensure: Registration is required with the Minnesota Department of Health.
• Reporting: Agencies must maintain records of employee placements and compliance with state regulations.
• Credentialing: Verification of credentials and background checks are mandatory.

Missouri

Healthcare Staffing Agencies Law

• Applicability: Applies to agencies providing healthcare staffing services.
• Licensure: No specific licensure is required, but compliance with state labour laws is mandatory.
• Credentialing: Agencies must verify the qualifications and licensure of all placed personnel.

Nevada

Health Care Staffing Agencies Law

• Applicability: Covers agencies placing healthcare workers in hospitals and long-term care facilities.
• Licensure: Required with the Nevada Division of Public and Behavioral Health.
• Reporting: Agencies must submit detailed reports on staffing levels and employee credentials.
• Insurance: Professional liability insurance is mandatory.

New Hampshire

Temporary Nurse Agencies Law

• Applicability: Applies to agencies providing temporary nursing staff.
• Licensure: Required with the New Hampshire Board of Nursing.
• Reporting: Agencies must report on staffing assignments and compliance with state regulations.
• Credentialing: Ongoing verification of licenses and continuing education is required.

New Jersey

Temporary Healthcare Services Law

• Applicability: Regulates agencies placing healthcare workers in various facilities.
• Licensure: Registration is required with the New Jersey Department of Health.
• Reporting: Agencies must maintain detailed records of employee assignments and compliance with state laws.
• Contractual Requirements: Compliance with state labor laws and contractual obligations is mandatory.

New York

Healthcare Staffing Agencies Law

• Applicability: Applies to agencies providing healthcare staffing services.
• Licensure: Registration is required with the New York State Department of Health.
• Reporting: Detailed reporting of employee placements and credentials is required.
• Insurance: Agencies must carry professional liability insurance.

North Carolina

Health Care Staffing Agencies Law

• Applicability: This covers agencies that place healthcare workers, particularly in long-term care facilities.
• Licensure: Required with the North Carolina Department of Health and Human Services.
• Reporting: Annual reporting of employee placements and compliance with state regulations.
• Credentialing: Verification of licenses and ongoing training is mandatory.

Oregon

Temporary Nurse Staffing Agencies Law

• Applicability: Regulates agencies placing nurses temporarily.
• Licensure: Required with the Oregon State Board of Nursing.
• Reporting: Detailed annual reporting of employee credentials and placements.
• Contractual Requirements: Compliance with state labor laws and contractual obligations is required.

Pennsylvania

Healthcare Staffing Agencies Law

• Applicability: Applies to agencies placing healthcare workers in various facilities.
• Licensure: Required with the Pennsylvania Department of Health.
• Reporting: Agencies must maintain records of employee placements and compliance with state laws.
• Credentialing: Verification of licenses and background checks are mandatory.

Rhode Island

Temporary Health Care Services Law

• Applicability: Regulates agencies placing healthcare personnel temporarily.
• Licensure: Registration is required with the Rhode Island Department of Health.
• Reporting: Annual reporting of employee placements and credentials.
• Contractual Requirements: Agencies must comply with state-specific labor laws.

Tennessee

Healthcare Staffing Agencies Law

• Applicability: Applies to agencies providing healthcare staffing services.
• Licensure: Required with the Tennessee Department of Health.
• Reporting: Agencies must report on employee placements and compliance with state regulations.
• Insurance: Agencies must maintain professional liability insurance.

Texas

Temporary Nurse Staffing Agencies Law

• Applicability: Regulates agencies placing nurses temporarily.
• Licensure: Required with the Texas Department of Health and Human Services.
• Reporting: Detailed reporting of employee placements and credentials is required.
• Contractual Requirements: Compliance with state labor laws and contractual obligations is mandatory.

Washington

Health Care Staffing Agencies Law

• Applicability: This covers agencies that place healthcare workers, particularly in hospitals and long-term care facilities.
• Licensure: Required with the Washington State Department of Health.
• Reporting: Agencies must submit detailed reports on staffing levels and employee credentials.
• Insurance: Professional liability insurance is mandatory.

What Can We Learn From the Data?

While this volume of data can seem daunting, there are a few key takeaways that can be useful if you’re looking to expand your staffing agency's operations or are concerned that you may not be compliant currently. Firstly, three states don’t require a license at all: Colorado, Kentucky, and Missouri. Kentucky and Missouri also don’t require any reporting. Florida technically doesn't require reporting, although you do need to keep a record of which nurses are on your roster on AHCA's website.

Is There a Best State To Operate In?

While it may seem like the best state for you to operate in is the one with the least compliance requirements, sometimes the best markets are the most regulated.

For example, while Florida does have strict licensing laws, it’s also well known for its aging population. Consequently, there is always a demand for healthcare workers; in fact, the Florida Medical Association predicts that the state will be short of nearly 6000 healthcare professionals in the next year. 

Therefore, despite having a much stricter set of compliance requirements, you could argue that Florida would be the better state for a healthcare staffing agency to operate in.

How do I Obtain a License?

Obtaining a license in each state can be equally confusing. While some states allow you to obtain a license fairly quickly, in a maximum of 60 days, some require much more diligent auditing. Moreover, it’s common for states to require background checks and fingerprinting tests on each member of staff who you plan to place in a healthcare facility. Do diligent research to ensure that you have all the correct information and procedures in place to ensure your compliance. 

Employer of Record Option

One alternative option for healthcare staffing agencies to ensure compliance is to work with an Employer of Record (EOR). Essentially, an EOR becomes the legal employer of record for your healthcare staffing workers and holds the healthcare staffing licenses.

This means a healthcare staffing firm can operate within a state and rely on the EOR's healthcare staffing license instead of going through the effort yourself. This can be especially useful for operating a staffing agency across multiple states. 

We developed Ascen with this in mind; our EOR platform is purpose-built for staffing agencies and provides coverage for all healthcare requirements across each US state. Not every EOR is set up for healthcare staffing, and many are not licensed to do healthcare staffing, so be sure to do your due diligence when reviewing EORs for your healthcare staffing agency.

If you’d like to see a demo of Ascen, please book it here.