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Discussion Starter · #1 ·
I know employee leasing has had some negative press in the past. POEs have not paid taxes and this comes back to bite the contractor, however, not all companies are like that.

If you are a contractor looking in to employee leasing, message me. I will explain what it is, give you the pros, give you the cons and give you ideas about how to go about doing it.

My company does provide employee leasing, but we only want to help if you think it is right for your company.

For those of you who have done employee leasing or currently lease your employees, how has your experience been? Has it allowed you more time to do what you want to do, grow business?

I am trying to get a contractors stance on this subject...
 

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Project Manager
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I know employee leasing has had some negative press in the past. POEs have not paid taxes and this comes back to bite the contractor, however, not all companies are like that.

If you are a contractor looking in to employee leasing, message me. I will explain what it is, give you the pros, give you the cons and give you ideas about how to go about doing it.

My company does provide employee leasing, but we only want to help if you think it is right for your company.

For those of you who have done employee leasing or currently lease your employees, how has your experience been? Has it allowed you more time to do what you want to do, grow business?

I am trying to get a contractors stance on this subject...
Why do we have to message you? Why not just share it with all - I know a lot would find the information useful.
 

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Why do we have to message you? Why not just share it with all - I know a lot would find the information useful.
So he can sell you on using him!

I just posted this in another thread, but I use PEO and I love it. I just email the hours in and pick up the checks and pay them. Just find one that will handle everything for you, some don't offer work comp. Mine does everything so it's super easy.
I also have the guys clock in via text when they get to the job and when they leave, my phone time stamps the text and I just put them in a spreadsheet and it totals it for me.
 

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So he can sell you on using him!

I just posted this in another thread, but I use PEO and I love it. I just email the hours in and pick up the checks and pay them. Just find one that will handle everything for you, some don't offer work comp. Mine does everything so it's super easy.
I also have the guys clock in via text when they get to the job and when they leave, my phone time stamps the text and I just put them in a spreadsheet and it totals it for me.


So how does that work? Do you hire the employee or does the PEO?
 

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So how does that work? Do you hire the employee or does the PEO?
I do, but they do... I pick them and just show up and say "Hey, got a new guy I need all the paperwork" they bring me some stuff for me to fill out (pay, approx hrs, description of work, etc) and a whole packet for the employee. All the paperwork is done in 30 mins, and nothing gets forgotten. If I no longer want the employee I can fire them at will and just let them know.
 

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Discussion Starter · #8 ·
Why do we have to message you? Why not just share it with all - I know a lot would find the information useful.
Touche! I just didn't want to sound pushy or anything. And I wasn't trying to convince anyone to use me. I am solely here to get peoples stances on the subject matter.

Good PEOs take care of everything, much like Robert said. If you find a PEO that won't provide worker's comp, you can probably find a better one. Employee leasing basically takes away all of the "risk" involved with employees. Like Robert stated, once he found someone he thought could work for him, he called his PEO and they took care of all of the paper work (if I understood correctly). It is basically like having your own HR team on call.

Obviously you know how much paper work is involved in business. Roughly 25% of a company owner's time is taken up with employee paper work. What if that extra time was spent growing business? With employee leasing, that is exactly what can happen.

Though employee leasing has many pros, such as reduce payroll expenses and lack of employee risk, there are some cons as well. One of the cons is that PEOs have not claimed taxes on leased employees, leaving that on the company leasing them. Luckily this has changed a great deal and is rarely seen anymore, but there still have been a few cases in which this has occurred. Another con is that employees sometime feel as if they do not belong to the company. Though this is technically correct, a lot of this has to do with the owner of the company. Owners can make even temporary staff feel like they belong.

There have also been arguments of seasonal leased employees feeling like they are temps. This could be seen as a pro and a con, for both the employee and the employer.

All in all, there are both pros and cons to employee leasing. A lot of it depends on the company and the industry as well. Of course, what's best for your company may not be best for another.
 

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Discussion Starter · #9 ·
I do, but they do... I pick them and just show up and say "Hey, got a new guy I need all the paperwork" they bring me some stuff for me to fill out (pay, approx hrs, description of work, etc) and a whole packet for the employee. All the paperwork is done in 30 mins, and nothing gets forgotten. If I no longer want the employee I can fire them at will and just let them know.
All of these are usually seen as pros to employee leasing. Also, a lot of companies can do everything in terms of paperwork via fax and internet, saving even more time.

Also, most companies usually prefer to have the PEO do all of the firing or laying off. This makes it easier on the company, for the most part. It is very similar to having a temp let go. And when it does happen, the employer isn't liable for anything in terms of unemployment insurance.
 

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I have been doing the employ leasing thing since the second half of 2010. So far, so good. Few minor items at first, but everything is running smooth now. I am looking into switching our 401k over to them in January.
 

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I understand the whole concept except who exactly employ's the person? The PEO or the contractor?

Who do they receive a W-2 from at the end of the year?

Would a PEO ever be in a position to terminate services to the contractor? For example, too much turn-over, laying off, etc?
 

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I understand the whole concept except who exactly employ's the person? The PEO or the contractor?

Who do they receive a W-2 from at the end of the year?

Would a PEO ever be in a position to terminate services to the contractor? For example, too much turn-over, laying off, etc?
In my situation their checks say
*** *** *** (PEO)
Colorado Deck and Framing
123 main st (PEO's address)

I am not 100% sure what the W-2 said but I bet it was the PEO name and such.
I would imagine the rest would depend upon their contract, they might have limitations of how often you can hire, fire, etc.
 

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Good questions Cooke. The employee gets a w2 from the leasing co. Last year, since we switched in July, my guys got one from my co, and one from the lease co. Not sure about the other question. They get paid on a percentage, so I guess if we got really slow, and unprofitable to them, it could happen.
 

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I'll have to look into this, if I ever decide to take on employees again.

I guess my concern was if I was trying to hire, say a new laborer, and went thru 6 guys in 6 weeks before I found one, would the leasing company view me as too much work and dump me? Or jack up my rates, or percentage they charge.
 

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There are a few other oddities with the arrangement. These mat vary by state. I still have to maintain my workers comp, although I show $0. The state of Ohio unemployment does not recognize the arrangement, so I have to verify all the filings. The lease co handles the paperwork, but I have to ok everything.
 

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I don't think so Cooke. I have yet to do a new hire through them, but it seems like they have systems in place, like drug testing, background checks, etc, that will be helpful.
 

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Discussion Starter · #18 · (Edited)
I'll have to look into this, if I ever decide to take on employees again.

I guess my concern was if I was trying to hire, say a new laborer, and went thru 6 guys in 6 weeks before I found one, would the leasing company view me as too much work and dump me? Or jack up my rates, or percentage they charge.
Cooke, that is a good question. I do have to say, it all depends on the PEO. That could be another cons about it. Just like most businesses, if they aren't profiting and are putting more work than they think they should, a company like that would not be beneficial to them.

However, this is definitely not the case for others. Some PEOs are small and need the business, so they wouldn't get ride of you nor increase your rates for something like this.

Oh, and in terms of taxes, EVERYTHING should be handled by the PEO. They employees would technically be theirs. That is why you no longer have liability and therefor, you no longer have to send out W-2s
 

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Discussion Starter · #19 ·
I don't think so Cooke. I have yet to do a new hire through them, but it seems like they have systems in place, like drug testing, background checks, etc, that will be helpful.
Thanks for all of your help. It is helpful to get first hand experience on the subject matter and I can only say so much before I sound like I am selling. So thank you for your help and incite.
 

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I've used a staffing service before. And at this point I'm ready to go back.
Right now I use a payroll company and have my own workers comp policy and pay into the unemployment fund.
I have to spend a lot of time dealing with bogus unemployment claims. When guy's just quit showing up,
they still go and file unemployment and they get it. Then it's up to me to try to convince the investigator that they weren't let go do to lack of work.:censored: If you have a staffing service you get skip all of this BS. When it's all said and done, a staffing service is a little more money.
But a whole lot less time spent on paperwork (priceless).:thumbup:

-Paul
 
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