Staff Leasing is an outsourcing program whereby a company (client company of the leasing company) contracts with a staff leasing service company to handle all employer/employee related administration. This would include, but is not limited to, employee benefits, workers compensation claims, unemployment benefits and all payroll functions including tax filings, W2, W4, wage garnishments (child support, tax liens, etc.) administration.

2. Who Do I Work For?

Your Employer of record is the staff leasing company. However, you are initially assigned to the client company that performed the pre-hire interview, and made an offer of employment. Once an offer of employment is accepted then the employee is contracted with the leasing company. By contract the leasing company must assign the employee to the client company who performed the pre-hire functions, and may not assign the employee to another client company without approval of the existing client company. The client company sets all policy that determines wages, vacation, paid time off, benefit cost scale, or any other decision that affects the employee. When the job assignment is complete the employee is reassigned to the leasing company. The leasing company may offer the employee employment with alternate client companies within range of location, job description, and pay scale, however, the employee does not have to accept the employment if they choose to seek employment elsewhere. This relationship between a staff leasing company, a client company, and an employee is known as a co-employment arrangement, and is recognized by state law, and the governing staff leasing licensing act that each staff leasing company must comply with in various states of operation.

3. Who do I Receive My Compensation Or Paycheck From?

Your paycheck comes from the staff leasing company because it is the employer of record. However, all decisions affecting the wage of an employee are made by the client company

4. Who Verifies Employment In The Event Of An Application For A Loan By An Employee?

Once again the staff leasing company is the employer of record and will verify employment. However, in most situations the loan institution requires three to five years’ history of employment. If the employee is a recent new hire of the staff leasing company and has been employed by the client company for any length of time, a simple letter of explanation of the relationship by the client company or the staff leasing company will be sufficient information for the lender.

5. Why would a small business use a PEO?

Small business owners want to focus their time and energy on the "business of their business" and not on the "business of employment." Business owners don't have the necessary human resource training; payroll and accounting skills; knowledge of regulatory compliance; or backgrounds in risk management, insurance and employee benefit programs to meet the demands of being a human resources manager.

6. Does the small business owner lose control of his or her business?

As co-employers, the PEO and small business owner become partners in the employment of their workers. The client retains ownership of the company. As co-employers, the business owner transfers specific liabilities to the PEO such as workers compensation benefits and unemployment administration. Along with unemployment management and workers compensation benefits, PEO's are responsible for payroll and employment taxes, maintaining employment records among other functions.  By shifting these responsibilities to the PEO, the client gains more command of the "core" revenue generating aspects of their business.