Employee Leasing
Definition
The process of hiring workers through a third-party organization.
What is Employee Leasing?
In employee leasing, a third‑party leasing company provides workers to a business on a temporary or project-based basis. The leasing company assumes many employer responsibilities, including payroll, taxes, and benefits, while the client organization supervises daily work.
Why is Employee Leasing Important for Employers?
Employee leasing services can help busy small businesses:
- Reduce employer administrative and compliance burden
- Provide access to benefits and HR infrastructure
- Enable flexible workforce scaling
- Shift certain employer risks to the leasing partner
FAQs
Do leased employees work only for my company?
Yes, they are assigned to your workplace and managed by you.
Who handles worker compensation and taxes?
The leasing company typically handles these responsibilities.
Is employee leasing the same as PEO?
No. Unlike employee leasing, PEOs do not supply workers to clients, though some may provide recruiting services. Instead, PEOs operate under a co-employment model, meaning they become the employer of record for HR, payroll, benefits, and employment taxes, so employees technically have two employers: the company that hired them and the PEO.
How ExtensisHR Can Help
ExtensisHR is a professional employer organization (PEO), offering expanded HR services and solutions, including:
- Payroll, employee benefits, and compliance management
- Customized HR support and workforce solutions
- Full-cycle recruiting
- Access to an HRIS