Employee leasing is an alternative for employers to manage the administrative functions of their workforce. Employers enter into a contract for a fee with a worker leasing company, commonly referred to as a professional employer organization (PEO). The PEO hires and leases workers to a client employer. Often, the client employer terminates and then leases back the same workers already at its worksite. The PEO becomes the employer of record for the leased workers and provides the employee administration and management functions. This allows the client employer to run other aspects of the business. The PEO takes on the responsibility for payroll, employment taxes, and Workers’ Benefit Fund assessments. They may also offer other services, such as workers' compensation insurance, retirement plan options, and medical benefits.
Worker leasing companies must have a license issued by the Department of Consumer and Business Services and renew the license every two years.
Worker leasing differs from temporary staffing because the employees are permanent. Temporary staffing does not require a license from the department.