​Imagine this: it’s a gorgeous, sunny Friday afternoon in late July. It’s approaching five o’clock, and you’ve just finalized a press release announcing your staffing firm’s expansion into new states. You’re excited about the weekend, and even more stoked about the potential PR buzz.

Right before you’re about to close your laptop and head out, Caroline from accounting bursts through the door, panicked. She presents a certified letter from the U.S. Department of Labor (DOL) stating that your agency faces a multi-million-dollar fine for payroll non-compliance.

There goes your weekend plans and positive PR buzz.

While compliance isn’t the sexiest part of running a staffing agency, it’s undoubtedly one of the most crucial. Non-compliance with local, state, and federal laws can result in hefty fines, lawsuits, and reputational damage.

As such, it’s essential to ensure you dot all your Is and cross all your Ts. The first step in doing so is knowing how to manage compliance burdens before they escalate into full-blown crises.

Here’s how to avoid non-compliance and reclaim your weekends.

The Unique Compliance Challenges Facing Staffing Firms

Staffing agencies operate in some of the most highly regulated employment environments, including healthcare and finance. You don’t just have to comply with laws affecting your own firm. You also inherit compliance responsibilities related to your clients’ operations.

Some of the high-risk areas agencies face are:

Multi-Jurisdictional Labor Laws

Your temp workers might be spread across multiple cities or states, each with their own labor laws. Minimum wage, paid sick leave, and overtime rules all vary. Keeping up is a full-time job in itself.

For example, New Jersey recently increased its minimum wage and implemented its Data Protection Act.  

Co-Employment Risks

Even when your clients supervise daily tasks, you’re still the employer of record. That makes you legally liable for wage and hour violations, misclassification, and timekeeping inaccuracies, even if they occur on-site at a client location.

Time Tracking Across Worksites

Many staffing agencies still rely on manual timesheets or client-reported hours. That’s a significant risk. Inaccurate time records, missed breaks, and unapproved overtime can easily lead to wage disputes or lawsuits under the Fair Labor Standards Act (FLSA).

ACA Compliance and Benefits Eligibility

If you’re managing a large volume of part-time or seasonal employees, tracking hours for Affordable Care Act (ACA) eligibility is crucial and can be incredibly complex without automation.

Payroll Taxes 

Keeping up with changing payroll tax regulations can be a challenging task. Staffing agencies with multiple branches are at higher risk of payroll tax non-compliance. Misclassifying workers, failing to deposit withheld taxes, and not complying with state and local laws can result in penalties and even criminal charges. 

The Rise of Gig Workers 

By 2027, half of the U.S. workforce is expected to comprise gig workers, presenting new compliance challenges for staffing firms. 

What’s the Cost of Non-Compliance?

In staffing, one small compliance error can spiral into a massive problem:

The takeaway? Compliance is crucial. 

Compliance Automation Built for Staffing Agencies

Timerack understands the unique demands of staffing operations. That’s why we’ve built a time and labor management platform that goes beyond just clock-ins and payroll. We help staffing firms automate compliance, reduce liability, and scale with complete confidence. 

Accurate, Real-Time Time Tracking Across Multiple Sites

Your placed employees can clock in and out using mobile apps, mobile kiosks, biometric scanners, and more. GPS and geofencing ensure that employees, even remote gig workers, are where they claim to be, when they claim to be there.

Our system captures exact hours worked, eliminating guesswork and making your time records airtight in the event of an audit or dispute. 

Custom Rule Configuration by Client

Our tools enable you to configure custom pay rules, rounding, breaks, and overtime policies on a per-client, per-job-site, or per-contract basis. That means you can comply with each client’s expectations without risking payroll or compliance errors. 

Overtime and ACA Monitoring

With built-in alerts, you’ll always know when an employee is nearing overtime or ACA eligibility. This allows you to take action in real-time, whether that’s adjusting schedules or reviewing hours with clients, and avoid unplanned labor costs or compliance penalties. 

Payroll Integration and Error Reduction

Our software integrates with leading systems, automatically transferring clean, verified time data. No more manual entry. No more mismatches between time and pay.

This not only speeds up payroll, but it also helps you avoid one of the top causes of wage disputes in staffing: inaccurate paychecks.

Audit-Ready Reporting and Documentation

Need to respond to a client inquiry, wage claim, or DOL audit? Timerack provides detailed, time-stamped records you can pull instantly. You’ll have a complete audit trail, including employee hours, break compliance, approvals, and location data. 

Ready to Stop Stressing Over Non-Compliance? 

Stop letting non-compliance concerns ruin your weekend or good publicity.

Hundreds of staffing firms are already utilizing Timerack to manage time tracking, payroll, and compliance.

Book your demo today and discover how we can help you mitigate compliance risks and grow your staffing agency, smartly and securely.