Employee leasing – what is it and when is it worth using it?

The total cost of employing an employee includes not only the salary including tax (gross). The employer additionally pays benefits such as pension or disability contribution and, if the employee has not opted out of the scheme, the contribution to the Employee Capital Plans. In this article, we publish detailed calculations of the total cost for an employer to employ an employee. We invite you to read on!
Table of contents:

What are three ways to get a specialist?


Way one: recruiting for the team


For obvious reasons, the most costly and time-consuming option is to fully recruit an employee and hire them on a full-time basis. However, this solution has advantages that cannot be overstated. A well-conducted recruitment process allows you to get to know the person who is to join the team better, understand his expectations and make sure he has the necessary skills. All this minimizes the risk of working with the wrong person and having to repeat the process all over again.

Recruitment, however, is not always a good idea. For example, if you are planning to recruit an employee for a short period of time, such as for seasonal work

Way two: outsourcing the employee


The least amount of paperwork a company will need is to use an outside company or specialist to handle the necessary issues. Not in every situation this way will be applicable, but if, for example, it is a matter of designing a website, conducting an audit or developing a publication, this may be the optimal solution.

In outsourcing, an employee or team of employees is delegated to perform a specific task for the company using the service. However, they still remain employed by their parent company.

Example:

A construction and renovation company has accepted the order to build the house, but the investor also wants a smart home installation to be done. The contractor does not employ anyone with such skills, and since this is a single order, he reports to a company that performs smart solution implementation services in real estate. He makes several appointments with her, as the work must be done in stages (design, preparation, installation, testing). In this way, the company does not have to pay the employee all the time, but only for the days worked and the work done.

Way three: employee leasing


What is employee leasing? In this option, a company that needs the services of an employee establishes a partnership with the company that currently employs him – everything, of course, must take place with the consent of the person concerned himself. If this one is granted, the employee is granted unpaid leave from his company for the period specified in the employee lease agreement. During this time, he can perform duties for the lessee company.

In order for everything to take place legally, the parties must enter into a labor lease agreement.

Employee leasing in Polish law


Although the term “employee leasing” in the laws does not appear in this form, we have regulations that govern the provision of this service. We are talking about the Labor Code. Art. 174 of the P.C. says that subject to the employee’s consent in writing, the employer may grant him unpaid leave to work for another employer. However, the law specifies that the period of work performed elsewhere must be established in an agreement that the employers enter into.

How to implement employee leasing?


The first step is to obtain the employee’s consent to temporarily suspend the employment relationship with the parent company and provide services to another company for a specified period of time.

If the parent company already has the employee’s written consent, the next step should be the drafting and signing of an agreement by the parties (the company lending the employee and the company that will use the employee’s services).

In the third step, the lessor grants the employee unpaid leave for a period of time specified in the agreement.

The final stage is the signing of a temporary employment contract between the new employer and the employee, participating in the lease.

How to draft an employee lease agreement?


An employee leasing agreement is concluded between the parent company and the company that wants to engage the employee. The document should contain the data of the parties (optionally, also the data of the employee or employees affected by the lease), as well as the exact duration of the unpaid leave granted by the company where the employee is employed. A necessary part of the contract is also a description or name of the position to be held by the employee and a detailed scope of duties.

Often an integral part of the agreement between the company providing the employees and the company using employee leasing is a statement in which the lessor assures the client that the contractors, who are to perform the job, are qualified and skilled for it.

The contract must also not lack the issue of remuneration for the company providing the employees – usually a rate per man-hour (i.e. one hour of work worked by one person) agreed upon by both parties is adopted.

An additional safeguard, sometimes used by lessors, is the amount the client agrees to pay if it decides to hire permanently the person whose services it has used under the employee lease.

Employee leasing – individual or through an agency?


Basically, there are two forms of employee leasing – we can use such a service directly with the company that hires the employee, or get in touch with an employment agency, which will not only hire the employee for a contractually specified period, but will also take care of formal and legal issues – taxes, wages or possible training. This is the main advantage of using structured employee leasing at the agency.

The agency’s staff usually has the right legal and accounting background, which will not only save you time in searching for an employee, but also will not have to deal with the formalities. Documentation, medical examinations, payment for work performed – all these elements will be taken care of by the agency, and your company will only have to pay the appropriate fee, which will also include a commission for handling employee leasing.

Organizing employee leasing individually, between companies, also has advantages. In this way, you can get the perfect match for your company’s needs. Besides, the commission will certainly be lower – but in return, both parties to the contract will have their portion of paperwork to deal with.

Summary


In many situations, it is employee leasing that will be the best solution in terms of acquiring a temporary employee. Especially if you consider the cost of getting an employee through the standard recruitment process.

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