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Employment Agency

Starting an employment agency depends on the type of services you offer and on what types of employees you will be placing. Access our registration guide to find out what you need to start your business.

If you're thinking about setting up an employment agency, start here for a checklist of items to consider and permits that you may need to obtain to get your business off the ground. Please note that this guide does not substitute for legal or professional advice, and additional permits may be required depending on the circumstances of your business.

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The state Division of Consumer Affairs regulates employment and personnel services. Licenses are issued based on a number of criteria including what are the type of services being offered and what type of people will the business be placing (Home Health Aids, Nurses, Clerical, etc.).

The regulated services are divided into several categories. They are:

You can find more information about licensing for each type of employment or personnel service at the Division of Consumer Affairs website: https://www.njconsumeraffairs.gov/epservices.

The first step in starting a business is writing a well-considered, comprehensive business plan. There are resources to provide technical assistance to entrepreneurs to guide them in the writing process. The New Jersey Small Business Development Centers have regional offices that cover every county in New Jersey and provide free, taxpayer-supported assistance to entrepreneurs (see www.njsbdc.com).

Other organizations that provide technical assistance include:

Zoning Requirements: Every municipality (City, Township, Borough, etc.) has a Land Use/Zoning Ordinance which regulates the kinds of business activities that are permitted within a designated zone and places restrictions on building on land parcels including building setbacks, building heights, signage, and various other aspects of the land usage.  When evaluating a location for your business you should consult with the Zoning Officer to determine the suitability of the site for your purposes and what obligations you will have, including possible Planning/Zoning board approvals. Check with your local or municipal government office to find the relevant contact information.

Building Permits: construction covered under the New Jersey Uniform Construction Code will require a Construction Permit and inspections to ensure that all construction conforms to the relevant construction codes.  In many cases architectural plans prepared by a licensed Architect may be required when making an application for a  Construction Permit.  Business owners should be diligent in preparing a budget for construction costs that includes the necessary professional costs and permit fees.  

Prior Approvals: is it vital that due diligence is used in evaluating any location for a business.  Some locations may require additional “prior approvals” before permits or zoning approvals can be obtained due to environmental or other land use concerns. You may require professional assistance in evaluating a site.

Contact your municipality for information on local regulations. General steps required include:

New Jersey Division of Revenue & Enterprise Services (DORES): if you choose to form a limited liability company (LLC) a corporation (Inc.), a Professional Corporation (PC), you must record that new entity with DORES.  This is not required for Sole Proprietorships or General Partnerships.  

Tax Registration: all businesses (including proprietorships and partnerships) must register for Tax purposes with DORES. Every business that has employees, more than a single owner, or is organized as a corporation must obtain a Federal Employer Identification Number (EIN), commonly referred to as a Federal Tax ID #, from the Internal Revenue Service (IRS).

Trade Names, Alternate (Fictitious) Business Names, Doing Business As (DBA): businesses may operate using a name other than their legal name, if that name has been properly registered. Sole Proprietorships and General Partnerships must register a “Tradename” in each of the County Clerk’s Offices in the Counties where they wish to conduct business. LLCs, Corporations, and other legal entities may register an Alternate Name with DORES.  Fictitious names for foreign entities (companies formed outside of New Jersey) are sometimes referred to as a DBA.

Mercantile Licenses: many towns require certain businesses to obtain Mercantile or other local business licenses.  Check with the Municipal Clerk’s Office to determine your obligation under the Municipal Ordinances. Your Municipal Clerk can be found by contacting your Municipal Government offices.

Sales & Use Tax: Businesses may be required to collect sales tax during a qualified transaction and submit those proceeds to the Division of Taxation. You may also qualify for a Resale Certificate that can be used when purchasing items for resale.

Taxpayer Workshops: The Treasury Department’s “Taxation University” offers a workshop series to assist small businesses learn more about their state tax obligations.

Business with employees have certain obligations. Be aware of the following before you hire anyone else to work with you:

  • Wage and Hour Compliance: the New Jersey Department of Labor and Workforce Development’s  office of Wage and Hour Compliance has requirements for wages, working hours, earned sick leave and other regulations that employers must follow, for more information visit  www.nj.gov/labor/wagehour/wagehour_index.html.
  • Workers’ Compensation: All employees must be covered by Workers’ Compensation. In addition, any stockholder (owner) of a corporation that works in the business, even if compensation is deferred, must also be covered by Worker’s Comp.  This does not apply to the members (owners) of LLCs. See your business insurance agent for information on state-approved workers compensation policies.

Although great efforts are made to keep these guides as accurate as possible, they are primarily for informational purposes. Specific details about your business may require additional or more specialized assistance. You are encouraged to consult with an attorney and accountant for legal and tax advice.

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