Employee leasing?

Discussion in 'Business Operations' started by Tri-City Outdoors, Nov 16, 2012.

  1. ToddH

    ToddH LawnSite Silver Member
    Posts: 2,184

    I think in Texas GL is around 4.5 and WC is 5.5 or close to 10% of payroll total for mowing so those increases would be not be double but close enough. If you use QuckBooks you should be able to estimate pretty well and besides you can always set up a slush fund too. Figure and estimate to the insurance company 50/50 labor but bank as if it were 75 landscape / 25 maintenance. I think if you do quarterly reports, you should be able to have the agent tweak the policy for you too.

    You can make much more on landscape than mowing maintenance but mowing is good cash flow.

    Back the the thread I started abount using classes for reports, this is a good reason too. Thanks guys
  2. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Posts: 2,132

    i didn't see it mentioned above, but one of the big benefits of employee leasing is that you can essentially "fire" the employee at any time for any reason. You simply call the leasing company and tell them to not send that employee back anymore and to send another. Where an actual employee is protected my laws and can turn around and sue you if you fire him without fallowing proper procedure.
  3. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    You can do the same with day labor and or temps.
  4. ptjackson

    ptjackson LawnSite Member
    Posts: 211

    I once worked for an employee leasing company so let's make sure we are all talking the same language.

    1. Temping Agencies- Employees on demand, hire for a day, week or month. call them and say you don't need them and your obligation ends.

    2. Payroll Services- from self service to full service it's basically software that you pay to use. It helps you with all the paperwork of running your business. Many of ADP's services fall into this category

    3. Staff leasing or People leasing- This is what the original poster was asking about. You still interview, hire and fire people normally. They usually provide you payroll services but most importantly the bundle benefits like health, 401k and Workers Comp insurance. They are considered "co-employees" if you don't need someone anymore you still fire them, they are without a job. But you can get breaks on some of the pricing of above benefits.

    Staff leasing companies became really attractive because of the workers comp issue mentioned above but most of that has came to an end. Comp companies that many "high risk" employers were hiding inside these staff leasing companies and quit selling insurance to the staff leasing companies, putting them out of business.

    While at one time they could save you money, for the most part in today's environment your biggest benefit is outsourcing the "hassle". It's like the small biz gets a big HR department. Any "comp" savings you get usually goes away.
  5. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    You can still get comp, health insurance, comp and retirement plans through ADP / Paychex and others without leasing. That is why I am trying to determine the significant difference between the two options.
  6. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Posts: 152

    One difference between the two is that when worker's comp or unemployment claims come up. The leasing company handles them. They are not your employee.
    I can say one thing. If leasing was the best thing to do. I feel more business owner's would know about it and utilize it.
  7. kblandscape

    kblandscape LawnSite Member
    Posts: 12

    I use a leasing company. I think it is great, I actually save on my workers Comp. But then again I am in California and workers Comp is high:usflag:. I like the fact all of the taxes are paid and you dont have to worry about it later in the month or quarter. I also have the leasing company drug test if one of the employees gets hurt on the job, its amazing how your employees do not get hurt once you mention drug test. The only con I have is you have to pay the leasing agency before they release the checks to your employees. but it never has been to much of a problem making payroll:weightlifter:. In California I highly suggest using one. I own another company along with the landscape company and I use the leasing agency for both. And I actually save 1000$ a month :cool2: with the other company I have because of workers comp having a high rating for the job classification.

    also, I say 4 out of 5 mid size construction companies that I do business with all use a leasing company for their employees. again, Leasing company not a staffing agency

    "A professional employer organization (PEO) is a firm that provides a service under which an employer can outsource employee management tasks such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development. It does this by hiring a client company’s employees, thus becoming their employer of record for tax purposes and insurance purposes. This practice is known as co-employment" wikipedia!
  8. ToddH

    ToddH LawnSite Silver Member
    Posts: 2,184

    Who do you use and how is is better than Managed HR.
  9. kblandscape

    kblandscape LawnSite Member
    Posts: 12

    The company I use is www.scicompanies.com/ Im not exactly sure about a HR management company. From my experience with the PEO company that I use, again PEO being a Professional employer organization, they pretty much let us do all the hiring and training and they take care of the paper work. In reading it seems as thought the HR management helps with the training and employee selection, and they get more involved in helping your payroll needs when the PEO just collects the Hrs and money and sends the checks. When switching to the PEO we kept all of our same employees and they were hired through the PEO. The Employment Development Department here in California is made aware that we changed to that particular company. I have not had any problems with this company, when we get a letter from the state notifying us about child support or taxes owed from an employee, we send the form to SCI Companies and they take care if it and I have not received any follow up letters from the state requesting a response because no initiative was taken. We also had a employee with an injury, they were drug tested, sent to the Dr. and was out of work for about a month and the PEO took care of all the workers comp and told us what the process will be. I hope some of this does not come off as confusing. And some of the companies out there would not benefit from using a PEO. Our workers comp rating was really high and we did benefit from using one.

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