Employee Leasing Solution

Small to mid-sized businesses can benefit from employee leasing services provided by a professional employer organization (PEO) or staffing firm. While large corporations can afford to employ a full time Human Resources department, many smaller companies simply cannot. Small to mid-sized enterprises may depend largely on employing family members to help manage personnel, but they can come up short when it comes to providing certain employee benefits. Health and dental insurance, worker's compensation, unemployment insurance, and personnel management are all areas that might overwhelm most small business owners. The huge premiums charged for worker's compensation, the exorbitant expense of paying unemployment insurance claims, and the cost of hiring full time Human Resources personnel can easily cause smaller companies to go bankrupt. State regulations require business owners with two or more employees to obtain worker's compensation insurance, which amounts to thousands of dollars each quarter in premiums. Those thousands can cut deeply into a business owner's overhead and keep a company in the red. But smart owners can take advantage of an employee leasing solution to avoid big business headaches.

Partnering with a competent PEO can take a lot of pressure out of personnel management and can actually contribute to profitability. A lot of owners have a DIY mentality; but when it comes to running a business you can't always do it yourself. Even the Bible extols the virtue of partnering for more positive results. "There is one alone, and there is not a second; yea, he hath neither child nor brother: yet is there no end of all his labour; neither is his eye satisfied with riches; neither saith he, For whom do I labour, and bereave my soul of good? This is also vanity, yea, it is a sore travail. Two are better than one; because they have a good reward for their labour. For if they fall, the one will lift up his fellow: but woe to him that is alone when he falleth; for he hath not another to help him up" (Ecclesiastes 4:8-10). Instead of going it alone, owners can contract with PEOs to handle HR tasks, such as payroll computation and taxes, worker's compensation, unemployment insurance, and benefits administration. Entrepreneurs are free to focus on making money without worrying about how or when to pay premiums and taxes. Employee leasing services offer cost-effective options for managing human resource functions for small and mid-sized companies, while eliminating employer risk and liability.

A good employee leasing solution can level the playing field between the little guys and the corporate moguls, making a small business run as smoothly as larger firms. Partnering with a PEO is like having a Daddy with deep pockets and an entire administrative staff on call. As a co-owner with the employer, the PEO hires the owners workers and leases them back to the employer who maintains worksite supervision and control of the daily operation of the company. The PEO takes over the tedious HR and administrative functions, such as computing payroll, making worker's compensation and unemployment insurance payments, and managing worker records. As the employer of record, the PEO files payroll taxes and insurance under its own Employer Identification Number (EIN). But the key advantage of an employee leasing solution is that the PEO assumes responsibility for accidents and injuries on the job. An effective leasing plan with a reputable provider ensures that small companies comply with OSHA regulations. The PEO will screen new hires, perform background checks and drug screenings, and investigate accident claims to ensure that owners and workers are kept free from risk and liability. Providers can issue safety handbooks and conduct sessions with workers to implement workplace safety regulations to reduce injuries.

PEOs provide owners with an efficient employee leasing solution that can help boost the bottom line and keep a company tax compliant. As offsite Human Resource administrators, employee leasing services handle all administrative duties connected with of managing and paying employees. Small business owners don't have to haggle about hours and pay rates or engage in lengthy discussions about why a single worker shouldn't claim five dependents. Employees seldom complain about checks drafted from a professional outside agency that acts as a mediator between the company owner and themselves. Employers can hire and retain better qualified workers because of a more attractive benefits package offered through a professional employer organization.

Small business owners who hire PEOs are responsible for turning in accurate employee records to the professional employer organization so that payroll accounts can be computed and a sufficient amount of insurance can be obtained to cover workers. Owners are responsible for ensuring that the firm furnishing employee leasing services has accurate information regarding the names and addresses of employees, the number of dependents claimed, and whether the worker is married or single. Depending on how often workers are paid, on a weekly or bi-weekly basis, company owners turn in hours and rate of pay. PEOs compute payroll and print employee checks; owners simply pick them up or ask workers to stop by the PEO office for disbursement. At the end of the pay period, owners are billed for employee payroll, insurance premiums, and administrative fees. Most firms offering an efficient employer leasing solution charge companies from 3% to 15% of the total payroll. Owners can figure on paying PEOs what it would cost to hire one additional staff member. But the savings realized by not having to pay high premiums or employ Human Resources personnel is well worth it, not to mention the headaches that accompany filing quarterly employer reports and meeting federal and state tax compliance.

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