In an employee leasing relationship, the employer and not the employee leasing service, does the hiring and firing. Having said this, many employee leasing companies assist their clients with hiring. This particularly true when conducting background checks and screening. Employee Leasing services always try to screen out problematic employees. They have an interest in this area because a problem employee can become quite expensive. But, ultimately, it is the client company who decides if they want to hire a new
As a general rule, though, the employer makes all the hiring a firing decisions. When the employer decides to hire a new employee, the company may locate a candidate through the traditional avenues of recruitment. Once the right candidate has been selects though, the work is essentially done. The company refers the new employee to the employee leasing service. The employee leasing service becomes the employer of record for this new employee.
The employee leasing service usually asks the employee to fill out certain forms and complies with W4, I9 requirements. The employee leasing firm may also conduct an orientation session for the employee to inform him/her of how the relationship will work and how the employee be paid.
Firing an employee is easier in an employee leasing relationship. The client company has a source to consult with regarding termination issues. Additionally, most companies go through a complete overhaul in their HR department when they join an employee leasing service. Employee leasing service often offer their clients employee handbooks that limit the right of an employee to sue or sue on frivolous issues.
Finally, most employee leasing companies offer an insurance policy as part of their coverage, so when an employer is sued by their employees for wrongful termination, their covers the judgment for a stated amount.