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Lease on Life?

Leasing workers can reduce your paperwork, but don't forget your legal obligations to those employees.

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This story appears in the November 2004 issue of Entrepreneur. Subscribe »

If it looks like a duck and quacks like a duck, it's a duck. The same goes for employees, even when they're leased from a staffing company or professional employer organization (PEO). When an employee is under your supervision and control, you can't contract away your legal responsibility for payroll taxes, workers' comp, and the like.

The employee business has grown rapidly. The National Association of Professional Employer Organizations (NAPEO) estimates that 2 million to 3 million Americans are co-employed in PEO arrangements. The idea is to put personnel administration into the hands of professionals so you can concentrate on your business.

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