How do you decide if an employee leasing company is for you? The National Association of Professional Employer Organizations (NAPEO) suggests you look for the following:

  • Services that fit your human resources needs. Is the company flexible enough to work with you?
  • Banking and credit references. You'll need evidence that the company's payroll taxes and insurance premiums are up-to-date. Request to see a certificate of insurance.
  • Investigate the company's administrative competence. What experience does it have?
  • Understand how employees' benefits are funded. Do they fit your workers' needs? Find out who the third-party administrator or carrier is and whether it's licensed if your state requires this.
  • Make sure the leasing company is licensed or registered if required by your state.
  • Ask for client and professional references, and call them.
  • Review the agreement carefully and try to get a provision that permits you to cancel on short notice-say, 30 days.

For a list of NAPEO member organizations in your area, search the NAPEO's directory online at www.napeo.org/directory.htm.

Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need