||Worker Outsourcing (Employee Leasing)
In addition to outsourcing specialized services
(such as accounting, legal, payroll,
employee benefits), you may find
to outsource all, or most, of
staff. Under this arrangement,
that work on your site are actually
of the outsourcing firm, which
paychecks and benefits. You,
in turn, pay
the outsourcing firm a fee that
- actual pay and benefits for the employees.
- the employer's share of Social Security,
Medicare and other payroll taxes.
- administrative overhead for managing the
employees' pay and benefits, plus reporting
that must be made to various governmental
- a profit margin for the outsourcing company
The chief motivation for the
of such arrangements is the onerous
and reporting requirements that
impose on small businesses. To
such an arrangement is appropriate
- the relative cost, in time and money, of
having the employees on your own payroll
versus on that of the outsourcing firm.
- the added flexibility you do (or do not)
get with respect to hiring and layoffs.
- your ability to choose the employees you
- your ability to remove employees who prove
to be unsatisfactory.
Before entering into any such
arrangement, confer with your
legal and tax
advisers. In some circumstances,
agencies may treat such employees
own, rather than employees of
firm. This is especially likely
if they are
under a long-term outsourcing
In that case, you may lose many
of the benefits
of outsourcing, and actually
or unexpected costs and aggravation.