- Payroll Administration -- This function includes calculating the wages for hourly and salaried employees; coordinating payment methods; and filing tax-related paperwork. This is one of the most common services provided in employee leasing.
- Benefits Administration – This function includes researching and coordinating cost-effective and comprehensive medical and dental plans. Other benefit services might include: short- and long-term disability, 401(k), flexible spending accounts, and vision plans. (Please note that a larger employee base enables the company to acquire more affordable insurance premiums.)
- Risk Management – This function provides a business with additional resources when handling a workers' compensation or unemployment claim. An employee leasing company typically has a department to handle this kind of claim, allowing a business to focus on daily affairs.
- Human Resources –This function enables the employee leasing company to act as a human resources department. It keeps up with employee-related laws and performs duties such as: recruiting employees; conducting background checks and pre-employment tests; compiling employee handbooks; and providing employee training.
Please note that the services provided by an employee leasing company will vary from one organization to the next. The aforementioned services are examples of the duties that such a company might offer.
Benefits to Employees
The leasing company specializes in human resource and personnel management duties.
Employees usually benefit from an employee leasing arrangement because there are additional resources at their disposal. These advantages include:
- Access to comprehensive benefits at a lower cost.
- Improved lines of communication between employer and employee.
- Accurate and timely payroll services.
- Professional assistance with employment-related issues.
- Access to current labor laws regarding workplace regulations and employee rights.
- Improved worksite safety.
Benefits to Organization
Many businesses find that their time and resources are very limited. Employee leasing companies can ease the burden for organizations by acquiring duties that cost an organization unnecessary time and resources. The benefits include:
- Lower insurance rates and efficiency of claims save an organization money.
- Businesses can solely focus their time and energy on business matters.
- Leasing companies have expertise in the area of human resources.
- Leasing companies have up-to-date knowledge of current employment and workplace laws.
- There is a lot less paperwork because the leasing company handles all of the legwork.
The process of outsourcing employee administrative duties is becoming increasingly popular, growing at a rate of more than 30-percent per year.
By Heather Brunson
