Employee Leasing is a business arrangement in which a company outsources its workforce to a third-party provider, often a Professional Employer Organization (PEO). The leasing company hires, manages, and pays the workers while the client company directs their day-to-day activities. This setup allows businesses to offload HR, payroll, benefits administration, and compliance responsibilities, while still retaining operational control over the employees.
Simplify credential management
Tracking employee certifications and licenses doesn't have to be complicated. Expiration Reminder helps you send automated notification and keep your company compliant.
Key Facts
- Shared Employment Relationship: The PEO is the legal employer of record, while the client company supervises the employees’ work.
- HR and Payroll Outsourcing: The leasing firm handles HR functions like onboarding, payroll, taxes, benefits, workers' compensation, and compliance.
- Popular With Small and Midsize Businesses: Especially useful for companies lacking internal HR infrastructure or looking to reduce overhead.
- Helps Ensure Compliance: Leasing firms stay up to date with labor laws, tax regulations, and benefits rules, reducing legal risks.
- Cost Control and Scalability: Allows businesses to scale their workforce up or down without handling administrative burdens.
- Different From Temporary Staffing: Leased employees are usually long-term and integrated into the business, unlike temps who are short-term.
1. What is employee leasing?
It’s when a company uses a third-party (often a PEO) to legally employ and manage its workers while retaining control over their daily work.
2. How does employee leasing benefit a company?
It reduces HR workload, ensures legal compliance, and provides access to better benefits and payroll systems.
3. Is employee leasing the same as hiring temps?
No - leased employees are usually long-term and integrated, whereas temps are short-term and often for one-off needs.
4. Who is responsible for employment taxes with leased employees?
The leasing company (PEO) typically handles all tax withholdings and filings as the official employer of record.
5. Can leased employees become permanent staff?
Yes, companies can often transition leased employees into direct hires after a period, depending on the agreement.
Make sure your company is compliant
Say goodbye to outdated spreadsheets and hello to centralized credential management. Avoid fines and late penalties by managing your employee certifications with Expiration Reminder.
.png)
