Employee leasing?

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

  1. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    Anybody have any experience with Employee leasing? It seams like a good option to cover payroll,workman's comp,unemployment and so on.

    I guess I do not like the sound of ”Employee leasing” Any advise?
  2. thomas.creation

    thomas.creation LawnSite Member
    Messages: 43

    I would also love to hear the pros/cons to this.
  3. Duekster

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

    Would employee leasing be much different than using an HR service?
  4. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    Basically your employee's are actually the leasing company employees. You hire & train and treat them just like they are your own. It more a technicality. For a fee the leasing company handles the back office stuff for you.
    What we are looking into. The the cost of the wages,taxes, workman's comp, unemployment and the "fee" is payed to the leasing company each pay period. They handle the back office stuff and provide me with pay checks.
  5. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    Just a side note the concept of employee leasing is not a temp labor agency.
  6. Duekster

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

    There is a distinction to leasing versus HR Management and you can get all the Benefits you mentioned from someone like Paychex or ADP HR services.
    I know ADP leases and provides HR services. I still am not clear on the the distinction with the exception of whose employee it is or how that matters to me.

    Clearly, you get big company benefits and professional HR services in both cases. There could even be some cost savings if you are trying to offer those benefits but find it hard.

    I found that I simply could not afford a "group health care plan" because group plans are expensive compared to what I could have gotten for just me. Group plans have to cover everyone so the rates are high but big companies like ADP and Paychex have thousands of people on the plan thus bringing down the rates. Perhaps even with their profits attached.

    The other benefit is you do not have to spend time doing those things and can focus on growing.

    Again, not being hard to get along with but I am not sure the benifit of leasing through one of these type of companies vs just using their HR services.

    I will keep this as an option as we have to deal with Obama Care. I would be exempt for not but that does not mean my employees would not expect it and it will make it harder to hire top employees.

    Lots to think about over the next 12 months.
  7. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    I guess I should add some more info.
    The reason I am looking into it is because of workman's comp. I insist on having a pay as you go coverage. I currently use a hr service that uses ADP. I have been denied under the landscaping and maintenance codes on any ADP worker's comp partners because the employees will occasionally leave the ground to trim a hedge or small accent tree.

    The leasing company I am looking into can just simply add new employees to the policy the already have.
    I can always do the guess payroll for the year then get audited B.S. It is the pay as you go I am having the issues finding.

    In Florida the workman's comp. Insurance company's are very regulated. You will find little difference in prices. So the insurance company do not want any "risk" if you have a payroll under $50k.

    Also I am also considering leasing is for the easy access to health,dental life insurance.

    My other option is to include myself in the workman's comp figures. But that is just a waste of money since I have other policy to cover myself. or I can pay more in codes for something that includes ladders. Most likely a tree work code.
  8. Duekster

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

    I often get the question about tree work. I tell them that we only trim trees standing on the ground with a poll or with a ladder and in no event trim limbs over 14 feet high.

    I charge more for such work accordingly too. If your comp jumps up by X % then you jump up by X+ % for doing such work. I specifically exclude such work in my contracts or say it is extra work by bid. Taking off a low limb is SOP provided it is less than 14 feet and it is relatively small. If big limb I tell them to call an Arborist as it might kill the tree or I quote with the use of an arborist. I have no problem telling people this is higher rate WC and I charge accordingly

    The audits are pretty simple in most cases. I often fill out there form and send them a copy of my report from Quickbooks pay roll. You just have to have a code for that type of work and charge the client accordingly. Sometimes I forget to actually push the right button in quickbooks to track the higher cost. I do however try to track my income and expenses correctly.

    Another question I often get is how much landscape ( construction) versus mowing. If you properly estimate your payroll then you should have no problems. When I hire someone I just up my wages.
    Last edited: Nov 17, 2012
  9. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    You nailed estimating payroll is the key but it is very hard to estimate right and grow. This year I made some equipment changes, replaced some workers and stream lined the routes. Then I added a new guy. bottom line almost doubled for the year & payroll increased a little.
    I'd like to keep overhead down and give some raises. But that is another estimating variable. Also I plan on adding a new guy next season.

    The construction codes are $3.50-$4 ish per $100 more than mowing. Almost double. Most of the labor is maintenance (38 weeks). 6 months of the year we basically do not landscape. Jan/Feb are slow. July-sept. production sucks because of the heat.

    I love the fact 6 months of landscaping brings in the same income as year long maintenance!
  10. Tri-City Outdoors

    Tri-City Outdoors LawnSite Member
    Messages: 152

    Ever year we look into how much more the overhead is. Then we set new prices for any new work. Every two years maintenance contracts get a cost of living raise. We base it on how the the state says the cost of living has gone up over the last two years.

    "You mean it will cost me more $ for the same service"
    "That is a great way to explain it to your husband miss Jones"

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