A Meridian client called last month to tell us how pleased he was, and how much money he was saving, by using an employee leasing company. You may want to investigate this service.
With employee leasing programs, you keep your existing employees and you control hiring and firing. Your present staff simply become employees of the leasing company. This arrangement offers you unique advantages:
- Risk Management – Workman’s compensation can take a big bite out of your profits. With an employee leasing company, you often find reduced overall workman’s compensation expense due to the leasing company’s ability to secure favorable workman’s compensation rates — rates that are much lower than a typical family business can obtain.
- Better Employee Benefits – Small family businesses may find that using a leasing company can enhance their employee benefit package at no additional cost and sometimes at a savings. Again, large leasing companies have the clout to obtain favorable health, medical, dental and life insurance packages. In addition, there may be a cash flow savings if you are currently required to keep cash deposits on account with your existing insurers.
- Less Paperwork – With a leasing company, they handle all of the tax deposits and monthly, quarterly and end-of-year filings. Your company is billed on the day your paychecks are delivered. With some companies you can even pay the bill with a check, enabling you to earn a bit of float on your payroll. You gain some cash flow while lightening your administrative load!
- No Surprises – If you’ve ever been taken a bit off guard by an unexpected workman’s compensation bill or tax bill, you may find employee leasing a welcome relief. Since you are on a pay-as-you-go basis, your leasing fee is completely all inclusive.
- Possible Transfer of Liability – Case law is still sketchy on exactly if and how much protection you receive from typical personnel liability matters by leasing your employees. Your best bet is to check with your local attorney to see if you gain any protection. On the other hand, it’s also possible to incur a weaker position by leasing. Be very careful, particularly if your company has a history of personnel-related legal actions.
As with all outside professional services, however, do your due diligence on any leasing company you may be considering. Unfortunately, there have been a few not-so-reputable leasing companies in operation in the past. Be sure to check the company’s trade standing, history and references before asking for a quote.
A highly professional leasing company (the only kind you should consider) will not only provide you with references, but also a complete cost-benefit analysis of using their leasing program. As with any quote, read the fine-print and understand the duration and caps on any and all costs.
