What Is an Employee Leasing Company?

Employee leasing can benefit the employer and the employee.

Many business owners who follow their dream of opening a business find themselves bogged down with the timely and expensive task of finding employees. After adding the time required to maintain payroll and accounting, many business owners end up with little time to actually conduct business. As an alternative, some business owners turn to the services of an employee leasing company to assist with their need to find and maintain qualified employees.

Operating Cost Savings

An employee leasing company can help a business lower operating costs.

An employee leasing company offers a notable cost savings to businesses. While the employee works for a business owner, he remains contracted as an employee of the leasing company. The leasing agency processes weekly payroll and withholds a predetermined percentage of the employee's wage rate as its leasing fee. The business owner eliminates the need to hire human resource and accounting staff to recruit and maintain employees. He is also free of having to complete these tasks himself and has more time to make money conducting business.

Liability

Employee leasing takes much of the burden off small business owners.

For small businesses not equipped to deal with the legal ramifications of employee related taxes, worker's compensation insurance and general liability, the employee leasing company is a welcome alternative. Since the leasing company is technically the employer, the leasing company and not the business owner deals with all payroll taxes, employee insurance and benefits, as well as any worker injuries or claims.

Time Savings

Companies providing leased employees can save businesses valuable time.

An employee leasing company also provides a significant time savings to businesses. The leasing company takes on the responsibility of screening and hiring qualified personnel, and the business owner no longer has to spend hours interviewing and training qualified applicants before they are able to work. Often, an employee leasing company can provide experienced workers able to start immediately with little to no training time.

Employee Benefits

Working for a leasing company may offer better insurance and 401k benefits.

An employee leasing company with many employees is generally able to provide better employee benefits than a small business owner with only a few workers. The size of a leasing agency affords greater purchasing power and access to significant discounts on medical coverage and retirement investment vehicles for the employees.

Job Security

Job security may be more reliable with a large leasing company.

Working for an employee leasing company can provide a greater sense of job security. Unlike working for a temp agency, a business seeking the services of an employee leasing company is interested in qualified workers on a permanent basis. Since the employee is hired by the leasing company and not the business, there is also the possibility of an additional placement if the current position ends due to a changing business need. Rather than starting all over with a new job search, an employee can request a new placement with their leasing company.

References

• Department of Labor State of Vermont: Employee Leasing Licensure
• Oasis Outsourcing: What Is Employee Leasing
• Business Owner's Toolkit: Steps to Successful Employee Leasing