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Private Employment Agency FAQ

To assist the public in understanding the Department’s enforcement policies with respect to the Private Employment Agency Act, the Department has developed the following questions and answers.

The Frequently Asked Questions (FAQs) provided below highlight topics and specific questions that are often asked of the Illinois Department of Labor (IDOL). The information provided in the FAQs is intended to enhance public access and understanding of IDOL laws, regulations and compliance information. 

The FAQs should not be considered a substitute for the appropriate official documents (i.e. statute and/or administrative rules.) Individuals are urged to consult legal counsel of their choice. Court decisions may affect the interpretation and constitutionality of statutes. The Department cannot offer individuals legal advice or offer advisory opinions. If you need a legal opinion, we suggest you consult your own legal counsel. These FAQs are not to be considered complete and do not relieve employers from complying with applicable IDOL laws and regulations.

1. What Agencies are covered under the Private Employment Agency Act?​

An "employment agency" under the Act means any person engaged for gain or profit in the business of securing or attempting to secure employment for persons seeking employment or employees for employers but excluding any person engaged in the business of consulting or recruiting, and who in the course of such business is compensated solely by any employer to identify, appraise, or recommend an individual or individuals who are at least 18 years of age or who hold a high school diploma for consideration for a position. This exclusion is not applicable to theatrical employment agencies or domestic service employment agencies.

2. What is domestic service for purposes of the Act?​

The term domestic service means household work in the home of the employer and includes and is not limited to a maid, cook, butler, chauffeur, housekeeper, or baby sitter. The Department considers persons who provide Home Services Workers, such as companionship services, to assist the client employer with such activities as daily living support, personal care, medication reminding, personal laundry, cooking, shopping and assistance in getting to and from appointments, to fall within the domestic service definition.

3. What are the requirements to be licensed as a Private Employment Placement Agency?​

The Application, instructions and required documents for licensing can be found under the Private Employment Agency Laws and Regulations contained in the Department’s Web Site.

4. If my agency is licensed under the Private Employment Agency Act, are there any additional licenses that may be required?​

Agencies that secure or attempt to secure work for hire for persons seeking work or workers for employers which provide home services (those who assist the client employer with such activities as daily living support, personal care, medication reminding, housekeeping, personal laundry, cooking, shopping and assistance in getting to and from appointments) are also required to be licensed by Department of Public Health. By definition a Home Services Placement Agency cannot be the employer of the employee. A licensing by the Illinois Department of Labor under the Private Employment Placement Act does not resolve the licensing issue before the Illinois Department of Health in determining whether an Agency is a Home Services Agency or Home Services Placement Agency under the Illinois Department of Public Health’s regulations. However, if the Department of Health determines that an Agency is a Home Services Agency under its regulations, then the Agency is not subject to the registration and licensing requirements under the Private Employment Agency Act.

5. After an Agency completes the initial registration, does an Agency have any obligations between the initial and renewal registration periods?​

Yes. All Placement Agencies must file with the Department a schedule of fees, charges and commissions, which the Agency intends to charge and collect for the Agency’s services pursuant to Section 1 of the Act. The schedule of fees, charges and commissions may not be changed unless an amended or supplemental schedule of fees is submitted to the Department of Labor at least 15 days before the change is to be effective. It is unlawful for any agency to charge collect or receive a greater fee than what is specified in such schedule filed with the Department of Labor. Additionally, no fees shall be charged for any service not specified in the schedule of fees on file with the Department.


All Placement Agencies in addition to the submission of the schedule of fees must submit to IDOL all forms and contracts to be used in the operation of the agency. Any change in forms or contracts must be filed with IDOL at least 15 days before any change is to be effective.

6. Are there any additional prohibitions on the conduct of a Licensee while operating?​

Yes. Section 10 of the Act sets forth prohibited conduct, including that no licensee shall publish or cause to be published any fraudulent or misleading notice of advertisement of its employment agency and in addition no licensee or his employees shall knowingly give any false or misleading information. The requirement with respect to false or misleading information extends to the client, the employee to be placed or and public at large. All representations must be supported in fact.


Examples of false or misleading information includes but is not limited to making representations regarding market rates without supporting studies and making statements about the independent contractor/employee status of persons being placed or tax ramifications. If the Placement Agency desires to make such statements, the agency must clearly inform the worker, as well as the client who is seeking to employ the worker for hire, that the Client - Consumer is the responsible Employer for all payroll purposes, including registration for any payment of workers’ compensation and unemployment compensation consistent with the laws of the State of Illinois (See IDES web site on Domestic Workers) as well as other payroll taxes, including social security consistent with the rules of the Internal Revenue Service and Illinois Department of Labor (See IRS publication 926 and Illinois law – Publication 12). Where the Placement agency does not exercise control over the employee being placed, the Agency may inform the Client-Consumer that the worker is not an employee of the Placement Agency and/or there is not an employer/employee relationship between the worker and the Placement Agency provided this representation is factually accurate.

7. What can occur if a licensee violates the Act?​

Based upon the nature of the violation the Department has the authority to refuse to issue, suspend, or revoke a license or to issue a fine of up to $1000. There are also criminal sanctions under the Act. It is unlawful for an Agency to charge fees in excess of those specified in the fee schedule filed with the Department and the Department may seek reimbursement for all such excess fees.

8. What is an Agency’s obligation with respect to keeping records?​

The Private Employment Placement Act requires certain records to be maintained and provided to the Department if requested. For example, an Agency must keep a complete record of all orders for employees which are received from prospective employers, a complete record of each applicant to whom employment is offered or promised and who is sent out by the agency for the job or interview, as well as a record of all payments to it of any and all placement fees received and refunded.

9. Do Agencies registered with the Illinois Department of Public Health as Home Services Agencies have to register with the Illinois Department of Labor under the Private Employment Agency Act?​

No. However, if an agency registers with the Department of Labor under the Act and the Department of Health determines that agency to be a Home Services Agency rather than a Home Services Placement Agency, this determination removes any requirements to be registered with the Department of Labor as a Placement Agency under the Act.

10. Is there a fee to become licensed as a Private Employment Agency?​

Yes. The application fee is $250 annually for agencies with less than 3 employment counselors; $350 annually for 3 to 5 employment counselors; $400 annually for 6 to 10 employment counselors and $500 annually for agencies with more than 10 employment counselors. The application fee is nonrefundable.

11. How long will it take to process my private employment application?​

The review process may take from 30 - 60 days from the date of filing with the Department. Applications that are submitted with all the required information will be processed sooner.

12. How long is the license valid?​

The license shall run for one year from date of issue, unless sooner revoked by the Department of Labor.

13. How do I renew my private employment agency license?​

Private employment agency licenses must be renewed annually. The Department will mail a renewal notice to the agency 60 days prior to expiration of the license. A completed renewal application along with the requisite fee, bond, annual report, agency contracts, fee schedule and refund policy must be submitted to the Department for review.

14. What are the requirements for an additional agency location?​

Each location requires a separate license and the requisite fee and bond.

15. What are the insurance requirements?​

Applicants for license are required to file a bond in due form, to the People of the State of Illinois, for the penal sum of $5,000 with one or more sureties, to be approved by the Department and conditioned that the obligor will conform to and not violate any of the duties, terms, conditions, provisions or requirements of the Private Employment Agency Act.

16. Is an annual physical necessary for employees who will be placed for domestic service?​

Every employment agency licensed under the Private Employment Agency Act that provides employees for domestic service shall require that all such employees receive an annual physical examination, which complies with the rules of the Department, to safeguard the health of employers and their families from communicable diseases.

17. How can I verify if an agency is licensed?​

Click here for a list of licensed agencies that is routinely updated. Or call (312) 793-2810 and provide the name and address of the agency.

18. How much can an agency charge for finding a job?​

The placement fee that is charged is determined by the private employment agency. Each applicant for a license must file with the Department a schedule of fees, charges and commissions, which will be charged and collected. If an agency changes its fees after having filed with the Department, an amended or supplemental schedule showing such changes must be submitted to the Department at least 15 days before such change is to become effective.

19. Can an agency charge an upfront fee for placement services?​

No. The agency shall not receive a placement fee until the applicant has accepted a position tendered by the employer. Acceptance means a mutual agreement, verbal or written, between the employee and employer as to starting salary position, time and place of employment.

20. If an employee is terminated by an employer after paying a placement fee, is he or she entitled to a refund of the fee?​

If the employee pays the fee and is discharged at any time within 30 days for any reason other than intoxication, dishonesty, unexcused tardiness, unexcused absenteeism or insubordination, or otherwise fails to remain in the position for a period of 30 days, thru no fault of his own, such licensee shall refund to the employee all fees less an amount equal to 25% of the total salary or wages paid such employee during the period of such employment within 3 days of the time such licensee has been notified of the employee's failure to remain in the employment.

21. How do I file a complaint against a Private Employment Agency?​

Complaints may be initiated at any time by anyone in either oral or written form and shall contain the name and address of the private employment agency or counselor involved and a concise statement of the violation alleged. The name, address, and telephone number of the person initiating the complaint must also be included.

22. What is an employment counselor?​

An employee of any employment agency who interviews, counsels, or advises applicants or employers or both on employment problems, or who makes or arranges contracts or contacts between employers and employees. The term "employment counselor" includes an employee who solicits orders for employees from prospective employers.

23. What are the requirements of an employment counselor?​

An individual who wishes to obtain a license as an employment counselor under the Private Employment Agency Act must submit a written application to the Department and successfully complete a written exam based upon the Act. There is a $50 application fee.

24. How do I renew my employment counselor’s license?​​

Private employment counselor licenses must be renewed annually. Employment counselor’s renewal applications may be downloaded from the Department’s website and must be submitted with the $25 renewal fee prior to expiration of the counselor license.

25. How many counselors can an agency employ?​

There is no limit on the number of counselors an agency may employ.

26. If a counselor terminates employment with an agency, what kind of notice must the agency provide to the Department?​​

If any employment counselor is discharged or terminates his employment with an agency, such agency shall immediately deliver, or forward by mail, the employment counselor’s license to the Department of Labor, together with the reasons for the counselor’s discharge, if the counselor was discharged.​​​​​​