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What is a Leased Employee?
A leased employee is defined as an employee who is employed by a professional employer firm but is assigned to work under a leasing agreement for another firm.
The staffing agency, or PEO, handles all administrative aspects of employment, such as taxes, payroll, and benefits. The leased employee works for the client, representing him/her as a regular worker.
Key Points of Leased Employee:
Employment Relationship:
The client company oversees the employee’s day-to-day work, while the leasing company (staffing company or PEO) is the legal employer.
Flexibility:
The client can quickly scale up their workforce without having to commit to a long-term contract.
Cost Management:
This is the simplest solution for businesses, as it allows them to avoid costs such as benefits administration and labor law compliance.
In many industries, leased employees are used for temporary or long-term assignments.
Also See: Employee Deductions | Employee Empowerment | Employee Evaluation
