Employee Leasing in Small versus Large Businesses

摘要

Employee leasing is a significant innovation in reducing small employers' payroll-related burdens. Leasing companies, which have a larger number of employees than any single employer, can achieve economies of scale in payroll administration and employee benefits. Many leased employees received better employee benefits through leasing. Because of new provisions in the Tax Reform Act (P.L. 99-514), fewer leasing companies are likely to provide employee pensions in the future. The leasing industry, however, is expected to expand as new firms enter the market providing a full range of payroll services and other employee benefits. The demand for leasing services, particularly by small employees, will continue to reflect small employer interest in contracting out paperwork and payroll-related services.