Employee leasing and working with a PEO are not the same thing. PEOs operate under a co-employment model, which is different from the typical employee leasing arrangements. During a co-employment arrangement, the PEO is listed as a co-employer.
California law has stipulated the requirements for classifying an employee as a temporary agency employee. These requirements include the right of the agency to assign and reassign a worker, but the workers have the right to refuse an assignment and remain on the agency's hiring list.
Drawbacks of employee leasing Less control: One of the greatest risks of employee leasing is that you're delegating an important part of your business to an outside company that doesn't know your business as well as you do. You lose control of your processes, systems and benefits.
While leased employees are legally employed by a PEO, they work under the day-to-day management and supervision of the leasing business — much like any other employee.
While leased employees are legally employed by a PEO, they work under the day-to-day management and supervision of the leasing business — much like any other employee. This generally gives the leasing business control over how they spend their time, which tools they use to perform their work, their deadlines, and more.
An employee leasing agency will provide you with temporary workers, but a PEO doesn't. In a co-employment arrangement, you supply and manage your own workforce, while the PEO helps you handle HR administration.
Employee leasing is an arrangement between a business and a staffing firm, who supplies workers on a project-specific or temporary basis. These employees work for the client business, but the leasing agency pays their salaries and handles all of the HR administration associated with their employment.
If you need further assistance, email us at EmployerAccess@dol.nj or call 609-633-6400, option 0, and ask to have the authorization code mailed to the employer address we have on file.
Staffing agencies can help you source workers with skills in highly-specialized areas, like health care. Leasing employees alleviates many aspects of recruitment, such as the need to advertise job openings, review resumes, interview candidates or run background checks.
Cons of using PEO companies Costs of benefits can fluctuate. Lower quality of HR services. Compliance is not guaranteed. Employees have limited access to HR.