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September 2026 jobs report graphic for staffing firms with a professional reviewing employment charts.

September 2026 Jobs Report: Hiring Cools, Temp Help Dips

The September 2026 jobs report points to a labor market that is cooling rather than collapsing. The U.S. added just 29,000 jobs in September, well below expectations, and the unemployment rate edged up to 4.2%. For staffing firms, the most important number was temporary help, which declined for the first time this year.

Key Takeaways

  • The economy added just 29,000 jobs in September, well below expectations.
  • July and August were revised down by a combined 60,000 jobs: July to a loss of 10,000 and August to a gain of 133,000.
  • Health care led job creation with 17,000 new positions, while construction added 11,000 and manufacturing added 9,000.
  • Temporary help services lost 10,900 jobs, ending an eight-month streak of gains.
  • Wage growth slowed: average hourly earnings rose just 5 cents for the month and 3.0% over the past year.
  • The August JOLTS report showed 7.1 million job openings, but employers remain slow to fill them.

September 2026 Jobs Report: A Cooling, Not Collapsing, Labor Market

September’s 29,000 new jobs were well short of forecasts, and revisions took another 60,000 jobs off July and August. July now shows a small loss of 10,000 jobs, and August’s strong first estimate of 162,000 was trimmed to 133,000.

Health care, construction and manufacturing kept adding jobs. Information (down 10,000), financial activities (down 7,000) and professional and business services (down 9,000) all edged lower. Wage growth also moderated, with average hourly earnings up 3.0% over the past year.

Overall, the report reinforces the idea of a “low-hire, low-fire” labor market. Employers aren’t laying people off aggressively, but they are much more cautious about adding headcount.

Temporary Help Declines for the First Time in 2026

For the staffing industry, one number deserves particular attention: temporary help services fell by 10,900 jobs in September. That’s the first monthly decline after eight straight months of growth, a streak we tracked in our August 2026 jobs report. August’s temporary help gain was also revised down to roughly flat.

That’s a change worth watching, but I wouldn’t call one month’s decline a trend yet. The drop came as professional and business services, the sector that includes temporary help, lost 9,000 jobs overall. BLS doesn’t identify a specific cause for the temporary help decline, so it would be speculation to pin it on one factor.

The broader picture is that companies are hesitant to commit to permanent hires. For staffing firms, that makes business development, client diversification and staying close to existing customers especially important heading into the fourth quarter. Strong staffing client relationships and accounts receivable diversification help protect your revenue if one or two clients pull back.

August JOLTS Shows Continued Caution

The JOLTS report released September 29 showed 7.1 million job openings in August, essentially unchanged from July. Hires were 5.2 million, quits were 3.1 million and layoffs and discharges were 1.6 million.

The key takeaway: demand for workers is still substantial, but employers aren’t hiring aggressively. With quits flat at 3.1 million, workers aren’t changing jobs much either, which keeps the pool of available candidates tight for recruiters.

A Deeper Look at the September 2026 Jobs Report

  • The broader U-6 unemployment rate, which includes discouraged workers and people working part-time for economic reasons, fell 0.1 percentage point to 7.6%. (Why U-6 matters for staffing: temporary staffing growth and U-6 unemployment.)
  • The prime-age labor force participation rate (ages 25–54) rose to 83.7%.
  • The overall labor force participation rate rose 0.2 percentage points to 61.8%, still 1.4 points below its February 2020 level.
  • Average hourly earnings for all private nonfarm employees rose 5 cents, or 0.1%, to $37.81, up 3.0% over the past 12 months. Earnings for private-sector production and nonsupervisory employees rose 7 cents, or 0.2%, to $32.60.
  • The average workweek for all private nonfarm employees held at 34.4 hours. In manufacturing, the workweek was unchanged at 40.6 hours, and overtime held at 3.0 hours. The workweek for production and nonsupervisory employees stayed at 33.8 hours.
  • ADP reported that private employers added 90,000 jobs in September, above expectations and up from a revised 36,000 in August.

What the September 2026 Jobs Report Means for Staffing Firms

A softer month for temporary help doesn’t change the bigger picture: employers want flexibility and are slow to make permanent hires, which keeps temporary staffing relevant. But it’s a reminder to keep your sales pipeline full and avoid depending on a few large accounts.

Slower months are also when cash flow discipline matters most. Clients that slow hiring can also slow payments, and that gap between weekly payroll and client invoices is one of the most common staffing agency cash flow traps.

Since 1992, Madison Resources has helped independent staffing firms through every kind of labor market. Payroll funding keeps your workers paid on time while you wait on client invoices, so you’re ready to take on new orders when demand picks back up. Talk to our team to learn more.

Ready to start your funding journey? Partner with Madison Resources today [apply here]

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About the September 2026 Jobs Report

Below are answers to some of the most common questions about the September 2026 jobs Report.

What Did the September 2026 Jobs Report Show?

The September 2026 jobs report showed the economy added just 29,000 jobs, well below expectations, and the unemployment rate edged up to 4.2%. July and August were revised down by a combined 60,000 jobs. Health care, construction and manufacturing added jobs, while information, financial activities and professional and business services edged lower.

Yes. Temporary help services lost 10,900 jobs in September 2026, the first decline after eight straight months of gains, and August’s gain was revised to roughly flat. One month doesn’t make a trend, so staffing firms should watch whether October and November show a rebound or continued softness.

BLS revises the previous two months as more employer surveys come in. In the September 2026 jobs report, July was revised from a 21,000-job gain to a 10,000-job loss, and August from 162,000 to 133,000. Together that’s 60,000 fewer jobs than first reported, which suggests the labor market was cooling more than the early numbers showed.

ADP reported 90,000 private-sector jobs in September, while BLS counted 29,000 total jobs. ADP uses payroll data from its own clients, while BLS surveys employers and includes government jobs. The two often differ month to month, and in August the gap ran the other way, so the trend over several months is more reliable than any single report.

Keep business development active, broaden your client base so one account slowing down doesn’t hurt you, and stay close to existing customers to spot changes early. With employers cautious about permanent hires, flexible staffing remains valuable, but firms that also manage cash flow and receivables carefully will be best positioned for the fourth quarter.

Related Articles

August 2026 Jobs Report for Staffing.

August 2026 Jobs Report: 162K Jobs, Temp Help Up Again

September 8, 2026 No Comments

The August 2026 jobs report showed the labor market regaining its footing, with 162,000 new jobs, unemployment steady at 4.1% and temporary help employment rising for the eighth straight month. Here’s what the numbers, and July’s cautious hiring data, mean for staffing firms heading into the fall.

Read More »
Staffing company reviewing staffing agency cash flow

Growing Into a Cash Crunch: 7 Staffing Agency Cash Flow Mistakes to Avoid

Landing a big new contract feels like the finish line. But for staffing agency cash flow, it’s usually the starting gun.

The day your new placements start, you owe them wages. Every week, like clockwork. The client that signed the deal may not pay its first invoice for 45, 60 or 90 days. Multiply that gap across a growing roster and a firm that looks healthy on paper can struggle to fund Friday’s payroll.

Here are seven funding mistakes we see again and again as staffing firms grow, and what to do about each one.

1. Assuming More Revenue Means More Cash

In most businesses, selling more puts more money in the bank. Staffing works in reverse. Every new placement adds to your weekly payroll right away, while the matching revenue sits in receivables for weeks.

Here’s a simple example. Say you add 25 light industrial workers at $20/hour, 40 hours a week. That’s $20,000 in new gross wages every week, before taxes and workers’ comp. On Net 60 terms, you’ll run about eight or nine payrolls before the first dollar from that client arrives. That’s more than $170,000 you have to float, just to support one win.

The fix: Look at cash and profit separately. A weekly cash projection that runs at least a quarter ahead shows you when a new contract will squeeze payroll, while you still have time to plan for it.

2. Expecting a Bank Line to Grow as Fast as You Do

Bank lines have their place. But the limit is usually set on your past financials, not your current billing. Raising it can take weeks of underwriting, and covenants can tighten right when you’re growing fastest and need them to loosen.

The fix: Line up a second source of working capital before you need it. Don’t wait for a maxed-out line or an annual review to force the conversation.

How the Two Options Compare

3. Leaving the Cost of Money Out of Your Bill Rate

This one sneaks up on firms chasing MSP, VMS and government contracts. The terms are long, the fees are fixed, and there’s little room to renegotiate once you’ve signed. If your markup doesn’t account for waiting 60+ days to get paid, strong hours can still produce thin margins.

The fix: Build every rate from the ground up:

  • Pay rate
  • Payroll taxes and statutory costs (FICA, FUTA, SUTA, workers’ comp)
  • Program or VMS fees
  • Screening, credentialing and onboarding costs
  • Overhead per hour
  • Funding cost (for example, 2.5% of billings on a $36 bill rate adds about $0.90 per hour)
  • Your target profit

 

If that funding line isn’t in your rate model, you’re paying for it out of your margin.

4. Letting One or Two Clients Run Your Receivables

Growth often comes from a few large accounts. That’s great until one of them changes its AP process, disputes an invoice or slows its payments by a couple of weeks. When one client makes up 40% of your receivables, its problem becomes yours.

The fix: Check a client’s credit before you staff up, not after. Set internal limits on how much any single client can make up of your receivables, and assign one person on your team to track each major account’s payment status.

5. Letting Paperwork Slow Down Your Invoices

Your days sales outstanding (DSO) usually starts to climb before a client pays late. It starts when the invoice goes out late or incomplete. A missing timesheet approval, the wrong PO number or an expired credential in a VMS portal can quietly turn Net 60 into Net 90.

The fix: Tighten the steps between the hours worked and the invoice sent. Set firm weekly time cutoffs. Confirm the approver and a backup approver for every client at onboarding. Follow up on missing time within a day or two instead of at month end.

6. Looking for Funding After You've Won the Contract

The worst time to set up working capital is the week a new contract doubles your payroll. Underwriting takes time, and you’ll be negotiating under pressure.

The fix: Set up your funding while things are calm. With payroll funding, your available cash grows as you bill more. 

7. Ignoring the Warning Signs

Firms rarely outgrow their funding all at once. It shows up in small decisions first:

  • You’re turning down business you could staff. You have the recruiters and the candidates, but you pass on an RFP because you’re not sure you can carry the payroll.
  • Your credit line never comes down. It stays at or near the limit, and business credit cards are covering the rest.
  • You’re paying yourself last. You’re paying vendors late, holding back internal bonuses or putting in personal money to cover payroll.
  • Cash decides your client list. You’re choosing clients based on how fast they pay, not how good they are for the business.

 

If two or more of these sound familiar, your funding setup is holding back your growth.

The Takeaway

Growth doesn’t break staffing firms. Growth their funding can’t keep up with does. The agencies that scale smoothly plan cash as carefully as they plan sales. They price in what it costs to wait for payment, they don’t rely too heavily on one client, they keep invoices moving, and they have working capital ready before the big contract arrives.

Madison Resources has helped staffing firms nationwide fund their growth since 1992, with optional payroll processing, multi-state payroll taxes and invoicing support. If your next big win would put pressure on your payroll, let’s talk before it lands.

Call 800-508-3863 or contact us here.

Ready to start your funding journey? Partner with Madison Resources today [apply here]

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About Staffing Agency Cash Flow

Below are answers to some of the most common questions about Staffing Agency Cash Flow.

What Causes Staffing Agency Cash Flow Problems?

Most staffing agency cash flow problems come from timing. You pay your workers every week, but clients may take 45 to 90 days to pay their invoices. The more placements you add, the more payroll you have to cover before that money arrives.

Profit and cash are not the same thing. A strong month on your profit and loss statement can still leave your bank account short, because the revenue is sitting in unpaid invoices. That’s why fast-growing firms often feel the squeeze on staffing agency cash flow the most.

A simple way to estimate it is to multiply your weekly payroll cost, including taxes, by the number of weeks until the client pays. For example, a $20,000 weekly payroll on Net 60 terms means you’ll need to cover about $170,000 or more before your first payment comes in.

Payroll funding closes the gap between when you pay your workers and when your clients pay you. Instead of waiting 45 to 90 days for payment, you get cash against the invoices you’ve already billed, so you can meet payroll without draining your reserves. Because it’s based on your receivables, your funding grows as your business grows, which keeps staffing agency cash flow steady even when you’re adding new clients and placements.

MSP and VMS programs often come with long payment terms, program fees and strict invoicing rules. One missing approval or credential can delay payment by weeks. Pricing those costs into your bill rates and keeping your invoicing accurate helps protect staffing agency cash flow on these contracts.

No. Payroll funding is based on invoices you’ve already billed, not on borrowing against your company’s assets. Approval usually depends more on your clients’ creditworthiness than on your agency’s balance sheet, which makes it easier for growing firms to qualify.

Related Articles

Business team discussing cash flow, invoicing, and payment cycles related to DSO and DTP.

DTP vs DSO in Staffing: Why Cash Flow Matters

August 27, 2025 No Comments

In staffing, cash flow is everything and understanding the difference between Days to Pay (DTP) and Days Sales Outstanding (DSO) is critical to managing it. While DTP measures how long a specific client takes to pay an invoice, DSO reflects how efficiently your entire business converts receivables into cash. By tracking both metrics, staffing firms can better identify payment trends, improve collections, and ensure they have the cash flow needed to fund payroll and support growth.

Read More »
Man at desk reviewing charts showing money only funding for his staffing firm.

Money Only Funding for Staffing Firms: How It Works vs. Full Service

Every staffing firm runs on the same math problem. Your workers get paid Friday. Your clients pay in 30, 45, sometimes 60 days. Money Only funding is one way to solve it.

That gap is the single biggest constraint on growth in this industry. Win a new contract and you need more cash, not less, because payroll goes out weeks before the first invoice comes back.

Payroll funding closes that gap. But not every firm needs the same kind of funding. At Madison Resources, we offer two models: Full Service and Money Only funding. They solve the same cash flow problem in different ways, for different kinds of firms.

Here is how Money Only funding works, how it compares to Full Service, and how to tell which one fits your business.

What Is Money Only Funding?

Money Only is funding without the back office. It is built for staffing firms that already run their own payroll processing, billing and tax filing, and want to keep it that way.

You keep your systems and your people. Madison advances the cash tied up in your receivables so you can make payroll, take on larger contracts and grow without draining your reserves.

The structure is simple:

  • 90% advance on submitted invoices, less the fee
  • 10% reserve held until your customer pays, then returned to you
  • Weekly ACH funding on your business cycle

 

Your customers still see your company, not ours. Money Only clients get a payment portal branded under their company name, checks made payable to their company name, and updated cash and aging reports.

How the Money Only Process Works

Money Only runs on a weekly cycle. Once a new client is approved, the rhythm repeats every week.

Before you start: new client approval. Submit customer information and credit requests for new clients through Madison’s Focus App. We review and approve them before you invoice.

  1. Submit. Each week, submit your invoice numbers and amounts, invoices, supporting timesheets, and proof of tax deposits.
  2. Process. Madison processes the invoices you submitted that week.
  3. Fund. We advance 90% of the invoice value to your account by ACH, less the fee.
  4. Customer pays. Your customer pays the invoice and Madison posts the cash.
  5. Release. The 10% reserve is returned to you.

 

That is the whole process. Submit, get funded, repeat every week.

Money Only vs. Full Service: Side by Side

The difference comes down to one question: who runs the back office?

With Money Only, you do. With Full Service, Madison does. Full Service combines funding with payroll processing, multi-state payroll taxes and invoicing, so your team can focus on recruiting and sales.

Infographic comparing Money Only vs Full Service payroll funding, highlighting 90% vs 100% and who runs the back office.

Why Staffing Firms Choose Money Only

Money Only is not a stripped-down version of Full Service. For the right firm, it is the better fit. Here is why owners choose it.

You already built a back office that works. If you have a payroll team, a billing process and a tax filing routine that run smoothly, there is no reason to rip them out. Money Only adds cash without changing how you operate.

You want control of the details. Some owners want their own team handling every paycheck and every invoice. Money Only keeps those decisions in-house.

You only need working capital to grow. Landing a large new account means floating weeks of extra payroll. Money Only scales with your receivables, so funding grows as your billings grow.

When Full Service Is the Better Fit

Money Only asks you to do the back-office work yourself. That is a real cost, even if it does not show up on a funding statement.

Full Service tends to make more sense if:

  • You are a newer firm without a payroll or billing team yet
  • You are expanding into new states and do not want to manage multi-state payroll taxes
  • Your recruiters or owners are spending hours on payroll and invoicing instead of sales
  • You want 100% funding rather than a 90% advance with a reserve

 

The honest answer is that many firms start in one model and move to the other. A firm that begins with Full Service may build its own back office over time. A firm on Money Only may decide its team’s hours are better spent on recruiting. Both paths are normal.

Find the Right Funding Model for Your Firm

The payroll-to-invoice gap does not go away as you grow. It gets bigger. The firms that scale are the ones that decide early how they will fund it.

Madison Resources has backed staffing firms nationwide since 1992. We are 100% staffing focused, independent, and we do not bury costs in the fine print. Whether you want funding only or funding plus the back office, we will build the program around how your firm runs.

If you run your own payroll and billing and need cash flow that keeps pace with your receivables, Money Only was built for you.

Talk to Madison about Money Only. Call 800-508-3863, or contact us here.

Ready to start your funding journey? Partner with Madison Resources today [apply here]

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About Money Only Funding for Staffing Firms

Below are answers to some of the most common questions about Money Only Funding for Staffing Firms.

What Is Money Only Funding for Staffing Companies?

Money Only funding is a funding-only option for staffing companies that run their own back office. Madison Resources advances 90% of your submitted invoices so you can make payroll, while you keep your own payroll processing, billing and tax filing.

It runs on a weekly cycle. You submit your invoices, Madison processes them and advances 90% by ACH, less the fee. When your client pays, Madison posts the payment and returns the 10% reserve to you.

You receive a 90% advance on each submitted invoice, less the fee. The remaining 10% is held in reserve and paid to you once your client pays the invoice.

Yes. That is the point of the program. Your team keeps running payroll, payroll taxes and invoicing, and Madison provides the working capital.

Money Only, your team handles payroll, payroll taxes and invoicing. Full Service adds Madison’s back office, including payroll processing, multi-state payroll taxes and invoicing, and funds 100% instead of a 90% advance.

It fits staffing agencies with an established back office that need working capital to grow. If your payroll and billing already run smoothly, Money Only funding adds cash without changing how you operate.

author avatar
Nick Andriacchi
Nick Andriacchi is the Chief Revenue Officer at Madison Resources, bringing over 30 years of experience in the funding and payroll industry. Before joining Madison, Nick held leadership roles at two other funding companies, where he built a reputation as a trusted advisor and strategic thinker. Widely regarded as a true industry expert, Nick is passionate about helping staffing firms grow through smart funding solutions and operational support.
See Full Bio
woman on a computer going over staffing agency unemployment claims.

Staffing Agency Unemployment Claims: How to Respond and Protect Your SUI Rate

Every staffing owner knows the cost of payroll. Fewer track the cost that shows up a year later, when the state mails a new SUI rate notice. Staffing agency unemployment claims are part of running the business. How you handle them decides whether they’re a small cost you can plan for or a slow leak in your gross margin.

Why Staffing Firms See More Claims Than Everyone Else

A typical employer has a separation now and then. A staffing firm has them every week.

Assignments end. Clients downsize a line or finish a project. A supervisor at the client site decides a worker isn’t a fit. In every case, your firm is the employer of record, so the claim lands on your account and not your client’s.

That’s what makes SUI different in staffing. You’re taking on separation risk for decisions you often didn’t make.

What One Claim Actually Costs

Most states set your SUI rate through experience rating. Benefits paid to your former workers are charged to your account, and those charges feed into the rate the state assigns you for the next year, usually looking back over several years.

This is why a small rate change can hurt so much. Here’s a hypothetical:

  • 250 temporary employees on payroll across the year
  • State taxable wage base: $12,000 per employee
  • Your rate goes from 3.1% to 4.4%

The increase is 1.3% × $12,000 × 250 employees = $39,000 in added annual tax.

It gets worse in staffing because of turnover. The wage base resets for every new hire, so a firm that cycles through 600 workers to keep 250 seats filled pays the tax on far more wages than headcount suggests. If your bill rates were priced on last year’s SUI rate, that increase comes straight out of margin until you can reprice.

This is a simplified illustration, actual taxable wage bases range from $7,000 in some states to well over $40,000 in others, so the real dollar impact varies by where you operate.

The First Ten Days: Your Response Playbook

When a former employee files, the state sends a notice asking why the person separated. Most states give you roughly 7–14 days (commonly around 10) from the mailing date on the notice, not the date you receive it. Some states are shorter. Always check the exact deadline printed on every notice.

A good response covers:

  1. The real separation reason. Was it lack of work, a voluntary quit, or a discharge? Pick one and support it. Vague answers like “assignment ended” without more detail often count against you.
  2. Dates. First day, last day worked, and the date the assignment ended.
  3. Reassignment offers. If you offered new work, give the date, pay rate, location, and how the worker answered.
  4. Supporting documents. Timesheets, signed policies, write-ups, and client correspondence.

Most states now accept responses through SIDES (the State Information Data Exchange System) or their own employer portal. Answering electronically is faster and gives you a timestamped record.

Late or thin responses cost more than the claim. Under the federal Trade Adjustment Assistance Extension Act of 2011, states can’t relieve your account of charges for benefits that were overpaid because you didn’t answer on time or fully, if you have a pattern of doing that. So a missed deadline can mean you pay for benefits the worker never should have received.

Separation Reasons Where Staffing Rules Differ

Unemployment benefits are meant for people who lost work through no fault of their own. For staffing firms, three situations come up over and over.

The assignment ended and the worker never checked in. Many states, Texas among them, have rules for temporary help firms: if a worker was told in writing at hire (1) that they must contact you for a new assignment when one ends and (2) that unemployment benefits may be denied if they fail to do so, and they don’t contact you, Texas (and some other states) may treat it as a voluntary quit. That only helps if the notice is signed, dated, and in the file.

You offered work and they turned it down. Turning down suitable work can disqualify a claimant. What counts as “suitable” depends on the state, pay, distance, and the worker’s skills, so write down the specifics of every offer.

The client asked for the worker to be removed. Being removed from one assignment is not the same as being fired from your firm. If the worker is still eligible for other assignments, say so. If the removal was for misconduct, you’ll need the client’s documentation, not a secondhand summary.

Winning at the Hearing

If the state rules against you, most states give a short window to appeal, often 10 to 30 days. The appeal usually goes to a hearing with an administrative law judge, often by phone.

What wins hearings:

  • Firsthand witnesses. The person who saw the problem, like a client supervisor or your on-site coordinator, carries more weight than an HR rep reading notes.
  • Records made at the time. Write-ups, attendance logs, and emails dated when things happened.
  • Signed acknowledgments. Proof the worker received the policies you’re relying on.
  • Consistency. Your hearing testimony has to match your first response. Changing the separation reason partway through damages your credibility.

 

The record from the hearing is usually what any further appeal is decided on, so treat it as your one real chance.

Check Your Charge Statements

Many firms stop paying attention once the claim is decided. They shouldn’t.

States send periodic benefit charge statements that show what’s been charged to your account. Review them for:

  • Charges for people who never worked for you
  • Charges on claims you won
  • Charges that belong to a different base-period employer

 

Most states let you protest errors, but only within a set window. Look over your annual rate notice the same way, and don’t assume the math is right.

Building a Claims-Resistant Operation

The cheapest claim is one that never gets filed, or one that gets denied the first time. Build these habits into your process:

  • At onboarding: Get a signed, state-compliant end-of-assignment notice and a signed handbook acknowledgment from every hire.
  • During the assignment: Ask clients to report attendance and performance issues in writing, right away.
  • At separation: Record the reason the day it happens, and offer the next assignment quickly and in writing.
  • When a notice arrives: Send it to one owner with a firm internal deadline a few days ahead of the state’s.
  • Every quarter: Review claim outcomes by client and branch to find patterns worth fixing.

 

Your recruiters are your first line of defense. A recruiter who knows what a clean separation file looks like can prevent problems long before a claim reaches an appeal.

Ready to start your funding journey? Partner with Madison Resources today [apply here]

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About Staffing Agency Unemployment Claims

Below are answers to some of the most common questions about Staffing Agency Unemployment Claims.

What Are Staffing Agency Unemployment Claims?

They’re claims for state unemployment benefits filed by workers your agency placed. Your agency is the employer of record, so the claim is charged to your SUI account and not your client’s, even when the client ended the assignment.

Benefits paid to former workers are charged to your agency’s account. The state factors those charges into your rate when it recalculates, usually once a year. A busy claims year can raise next year’s rate, and in most states the effect lasts for several years.

Often, yes, if no other work was available. Two things usually decide it: whether your agency offered a new assignment, and whether the worker followed a check-in requirement they signed when hired.

It depends on the state. Around 10 days is common, and some states give less. Go by the deadline printed on each notice. A late or incomplete answer can leave your account charged even when the worker shouldn’t have received benefits.

The staffing agency, because it’s the employer of record. Get the client’s reason in writing while it’s fresh. Also note whether the worker is still eligible for other assignments, since leaving one client isn’t the same as losing the job with your agency.

Signed end-of-assignment notices, handbook acknowledgments, timesheets, written warnings, and records of reassignment offers (date, pay, location, and the worker’s answer). Firsthand statements from client supervisors carry the most weight at a hearing.

Collect signed policies at onboarding. Ask clients to report problems in writing as they happen. Offer the next assignment quickly and in writing. Look at claim results by client every quarter to find patterns.

It often makes sense for agencies with high claim volume or payroll in several states. If you keep it in-house, give one trained person ownership of every notice and set an internal deadline a few days ahead of the state’s.

Yes, mainly in how many there are and who controls the separation. Staffing agency unemployment claims come from assignments ending constantly, often because a client decided to end them. The agency still answers the claim and takes the charge, so it needs records from client sites as well as its own office.

Yes. If the state rules against you, most states give you a short window, often 10 to 30 days, to ask for a hearing. Staffing agency unemployment claims are usually won or lost at that hearing, so bring firsthand witnesses and records that were made at the time.

The cost shows up in your SUI rate, not as a single bill. Staffing agency unemployment claims push your rate up, and the new rate applies to each employee’s taxable wages up to the state cap. Staffing turnover restarts that cap with every new hire, so a one-point rate increase can add tens of thousands of dollars a year for a mid-size agency.

author avatar
Nick Andriacchi
Nick Andriacchi is the Chief Revenue Officer at Madison Resources, bringing over 30 years of experience in the funding and payroll industry. Before joining Madison, Nick held leadership roles at two other funding companies, where he built a reputation as a trusted advisor and strategic thinker. Widely regarded as a true industry expert, Nick is passionate about helping staffing firms grow through smart funding solutions and operational support.
See Full Bio
businessman frustrated because his staffing back office is holding his firm back.

Is Your Staffing Back Office Holding Your Firm Back?

Staffing firms make their money out front: recruiting, placing people and keeping clients happy. They stay in business because of the staffing back office: Friday payroll, tax deposits in every state where you have workers, invoices that meet each client’s rules, and cash that actually shows up in the bank.

For a while, one team can handle both. Eventually the back office starts eating the time the front office needs. Almost every growing firm reaches that point, so the real question is when.

The short answer: outsource your staffing back office when doing it yourself costs more than it’s worth. Count the hours, the compliance risk and the cash tied up in slow billing.

How a Big Win Can Turn Into a Back-Office Crisis

This is a hypothetical example to show a common pattern.

A staffing firm is steadily growing when several clients expand into new markets. Suddenly, its team is managing new state registrations, payroll requirements, tax obligations, and a growing volume of invoices.

Before long, the owners are spending more time on administrative issues than supporting recruiters and clients.

By moving payroll, tax administration, and billing to a staffing back-office partner, the firm can keep growing without building a larger internal administrative team.

Growth does not always overwhelm the back office overnight. Sometimes it happens one new client, market, and employee at a time.

What's Actually in the Back Office

In staffing, the back office is everything that happens between a timesheet being approved and the cash landing in your account:

  • Payroll processing and payroll tax filings and deposits
  • Billing, including VMS portals, POs and cost centers
  • Posting incoming payments and managing receivables
  • Checking client credit and resolving disputes and short pays
  • Reporting on gross margin, DSO and performance by client
  • Keeping your ATS, timekeeping, payroll and billing systems connected

Signs You've Outgrown Doing It Yourself

When It's Eating Your Time

  • Payroll week runs your calendar: Late nights before payday, calculations by hand, and constant corrections and reruns mean you’ve outgrown spreadsheets and workarounds.
  • The same data gets typed three times: Re-entering hours between your ATS, timekeeping, payroll and accounting creates errors and delays.
  • The owner has become the billing clerk: Every hour a leader spends on invoices, tax filings or chasing payments is an hour not spent coaching recruiters or growing accounts.

When It's Squeezing Your Cash

  • Invoices are taking longer to get paid: Rising DSO, slipping approvals and a growing pile of disputes mean the steps between billing and getting paid need better process and tools.
  • The math already says so: Add up the full cost of doing it in-house: salaries, benefits, software, penalties from errors and cash tied up in slow receivables. Compare that with a partner’s fee plus the value of faster cash and fewer mistakes.

When the Rules Are Getting More Complicated

  • You’re crossing state lines: Every new state brings its own SUTA rate, wage and hour rules, paid leave laws and sometimes local taxes.
  • A big client handed you a VMS login: Enterprise programs expect exact billing formats, credentialing and time approvals. Miss one requirement and your invoice can wait an extra pay cycle.

The Cost You Don't See Until You Sell

For mid-market and larger firms, back-office discipline affects more than day-to-day operations. It affects what your company is worth.

You feel high DSO in your weekly cash. Buyers, investors and lenders see it as risk. A messy aging report, inconsistent invoicing and frequent disputes all signal that revenue doesn’t reliably turn into cash, and that lowers the multiple.

In due diligence, a buyer is paying for how quickly your revenue turns into cash, not just for the revenue. If receivables are slow, the buyer knows it will have to put in extra working capital after closing and will lower its offer to cover it. Inconsistent processes also suggest that growth will be expensive and risky.

When you can show that billable hours turn into collected cash quickly and consistently, you improve this week’s bank balance and build real equity for a future sale or recapitalization.

What to Hand Off, Based on Where You Are

Chart showing hand off stages for staffing back office.

Payroll and payroll tax are almost always the right place to start. They carry the most penalty risk, and your workers feel it right away when something goes wrong.

Before and After: What Changes When You Hand It Off

Tax exposure: Before: your firm carries all the risk of multi-state filing errors and penalties. After: your partner handles the filings and compliance.

Visibility: Before: piecing together where every invoice stands from spreadsheets and bank statements. After: online cash and aging reports show you at a glance.

Cost as you grow: Before: more volume means more hires. After: costs rise and fall with your billings.

Continuity: Before: one key person quitting on a Wednesday can derail Friday. After: a whole team covers so payroll still goes out.

Cash timing: Before: you float payroll until clients pay. After: funding closes the gap between payday and payment.

Your Partner Checklist

  1. Do you only work with staffing firms? Ask for references in your verticals (light industrial, healthcare, IT, clerical) and proof of VMS experience.
  2. Can I buy just what I need? Look for modular options, such as funding only or full service, that can grow with you.
  3. Will you work with my systems? Make sure data can move cleanly from your ATS and timekeeping tools, and that you can export reports.
  4. How do you handle compliance? Multi-state payroll tax, wage and hour rules, and audit readiness should be standard.
  5. What does the transition look like? A phased rollout and a named contact are good signs. A generic support ticket queue is not.
  6. What exactly will I pay? Fees should be transparent, with no surprise charges for routine work.

How Madison Resources Helps

Madison Resources has backed staffing firms nationwide since 1992. With our funding-only program, you can receive a 90% advance on submitted invoices, funded weekly by ACH, with no application, setup or administration fees. When you’re ready to hand off more, our full-service program adds payroll processing, multi-state payroll taxes and invoicing, and full-service clients receive 100% funding. Your invoices, payment portal and checks all stay in your company’s name.

We make staffing companies more profitable. Call 800-508-3863 or email info@madisonresources.com.

Ready to start your funding journey? Partner with Madison Resources today [apply here]

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About Staffing Back Office

Below are answers to some of the most common questions about Staffing Back Office.

What Is a Staffing Back Office?

A staffing back office handles everything between an approved timesheet and cash in your account. That covers payroll, payroll tax filings, invoicing (including VMS billing), posting payments, managing receivables, checking client credit and reporting on margin and DSO.

When doing it yourself costs more than it’s worth. Common signs are payroll taking over your week, invoices taking longer to get paid, expanding into new states, or winning a client that bills through a VMS.

Payroll and payroll tax. They carry the most penalty risk, and your workers feel it right away when something goes wrong. Most firms add invoicing and receivables support later.

Yes. Many firms start with funding only and add payroll, multi-state payroll taxes or invoicing as they grow. 

Not with Madison Resources. Your invoices, client payment portal and checks all stay in your company’s name, so your clients keep dealing with you.

You should gain visibility. Madison Resources clients get online cash and aging reports, so they can see where every invoice stands at any time.

Buyers and lenders look closely at how fast your revenue turns into cash. High DSO, a messy aging report and frequent disputes signal risk and can lower your valuation. Clean, consistent processes help raise it.

Look for a partner that works only with staffing firms, works with your systems, handles multi-state compliance, gives you a named contact and has transparent pricing.

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Nick Andriacchi
Nick Andriacchi is the Chief Revenue Officer at Madison Resources, bringing over 30 years of experience in the funding and payroll industry. Before joining Madison, Nick held leadership roles at two other funding companies, where he built a reputation as a trusted advisor and strategic thinker. Widely regarded as a true industry expert, Nick is passionate about helping staffing firms grow through smart funding solutions and operational support.
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Massachusetts PFML Contribution Changes for 2027.

Massachusetts PFML Contribution Changes for 2027: What Staffing Firms Need to Know

Massachusetts PFML contribution changes take effect on : employers must pay 60% of the family leave contribution, employers may withhold up to 100% of the medical leave contribution, and the exemption for employers with fewer than 25 covered workers moves from medical leave to family leave. The changes to the state’s Paid Family and Medical Leave (PFML) program come from a supplemental budget act signed by Governor Maura Healey on June 12, 2026, and are intended to address recent IRS guidance on the tax treatment of Massachusetts PFML benefits.

The Timeline

Chart showing the road to 2027 Massachusetts Paid Family and Medical Leave.

The Contribution Split Changes

Chart depicting the contribution split changes for Massachusetts paid family and medical leave 2027.

These percentages govern how a contribution is divided, not what it costs. The contribution rates the percentages apply to will be announced by October 1, 2026.

The Small-Employer Exemption Moves

The exemption for employers with fewer than 25 covered workers shifts. Beginning in 2027, it applies to the family leave contribution rather than the medical leave contribution.

For professional employer organizations and staffing agencies, the 25-employee threshold is not measured across the whole book of business. Each employer’s workforce is counted separately to determine whether the threshold is met, and individual returns must be filed for each client employer.

Reporting and Notice Requirements

Employers must continue to report contributions and wages for employees and covered 1099-MISC workers quarterly, including the percentage of family and medical leave contributions withheld from each employee.

Written notice of the PFML program’s benefits and contribution rates must be provided to employees within 30 days of hiring.

What to Watch For

The Massachusetts PFML contribution changes are settled, but the numbers behind them are not. The 2027 contribution rates are due by October 1, 2026, and only once they are published can the 60/40 family leave split and the medical leave withholding be translated into actual dollars. That announcement is the point at which payroll settings, withholding percentages, and new-hire notices can be updated for the 2027 structure.

As with any compliance change, consult your attorney, CPA, or industry professional for guidance on how the Massachusetts PFML contribution changes apply to your business.

Where to Find More Information

 

Department of Family and Medical Leave: (833) 344-7365

Questions about contributions: (617) 466-3950

Hours of operation are Monday through Friday, 8:00 a.m. to 4:30 p.m.

Madison Resources is committed to being a dependable partner to your staffing firm by sharing timely updates, promoting operational accuracy, and providing practical resources to help you stay ahead in a constantly evolving compliance landscape.

Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.

Frequently Asked Questions About Massachusetts PFML 2027

Below are answers to some of the most common questions about FAMLI for Staffing Agencies.

When Do the Massachusetts PFML Contribution Changes Take Effect?

January 1, 2027. The changes were signed into law on June 12, 2026, as part of a supplemental budget act.

Beginning January 1, 2027, employers are required to pay 60% of the family leave contribution and employees may be charged up to 40%. This reverses the previous contribution structure for family leave.

Yes. Beginning January 1, 2027, Massachusetts employers may withhold up to 100% of the medical leave contribution from an employee’s pay. The figure is a maximum, not a required withholding amount.

The 2027 contribution rates will be announced by October 1, 2026. The 60/40 split and the 100% withholding figure govern how each contribution is divided; the rates determine what it costs.

Yes, but the exemption moves. Beginning in 2027, the exemption for employers with fewer than 25 covered workers applies to the family leave contribution rather than the medical leave contribution.

Each client employer’s workforce is counted separately rather than combined across the book of business. Professional employer organizations and staffing agencies must file individual returns for each client employer to determine whether the 25-employee threshold is met.

Massachusetts employers must report PFML contributions and wages quarterly for both employees and covered 1099-MISC workers. Each filing must include the percentage of family and medical leave contributions withheld from each employee.

Massachusetts employers must provide written notice within 30 days of hiring. The notice must cover the PFML program’s benefits and contribution rates.

The Massachusetts PFML contribution changes were enacted in a supplemental budget act signed by Governor Maura Healey on June 12, 2026. They are intended to address recent IRS guidance on the tax treatment of Massachusetts PFML benefits.

author avatar
Tyler Tierney
Tyler Tierney is a payroll funding specialist at Madison Resources, where he helps staffing firm owners secure funding solutions designed for long-term success. With deep experience in the staffing and payroll funding space, Tyler focuses on aligning the right capital structure with each firm’s growth strategy while keeping cash flow strong and operations running smoothly. He delivers timely legislative updates and analysis of industry trends impacting staffing firms.
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