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When an employer engages with a leasing company to lease an employee, the employer does NOT:
Suggested Answer: B
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Leasing companies (PEOs) handle payroll and wage reporting.
Employers still set rates (C) and supervise work (D).
IRS PEO Tax Responsibilities
42 comments · newest first
MA
Malcom
10 months ago
They still report wages though, right?
SU
Susy
10 months ago
Wait, can they really not set the pay? Sounds weird.
LA
Lawrence
10 months ago
So they just supervise? That’s interesting!
JA
Jaclyn
10 months ago
Totally agree, that's how leasing works!
CY
Cyndy
11 months ago
Employers don’t hire or fire leased employees.
EN
Enola
11 months ago
I believe they definitely report wages, but I think they don't hire and fire directly. That seems like the right choice.
GE
Gerald
11 months ago
I'm a bit uncertain about whether they can supervise the work. I feel like they might still have some oversight.
TO
Tori
11 months ago
I remember a practice question about leasing companies where the employer didn't set the rate of pay. That might be the answer here too.
EL
Eliseo
12 months ago
I think the employer might still have some control over hiring and firing, but I'm not entirely sure.
KA
Katina
12 months ago
This is a tricky one. I'm not totally sure what the right answer is, but I'm going to eliminate the options that seem clearly wrong, like "hire and fire" since that's the whole point of using a leasing company. Then I'll try to reason through the remaining choices.
AV
Avery
12 months ago
Okay, I think I've got this. The key is that the employer doesn't have control over the leased employee in the same way they would for a directly hired worker. So they can't set the rate of pay or supervise the work - that's all handled by the leasing company. I'm feeling pretty confident about this one.
LE
Lezlie
1 year ago
Hmm, I'm a bit unsure about this one. I know the employer doesn't directly hire or fire the leased employee, but I'm not totally clear on the other responsibilities they don't have. I'll need to re-read the question carefully.
SI
Silva
1 year ago
This seems like a straightforward question about the relationship between an employer and a leasing company. I'll need to think carefully about the key responsibilities that the employer doesn't have in this scenario.
JA
Janine
1 year ago
Ah, I see now. The employer doesn't get to do any of the typical employer duties like hiring, firing, or setting pay. That's all the leasing company's responsibility.
ST
Stefany
1 year ago
D) Supervise the work
CH
Chi
1 year ago
C) Set rate of pay
OL
Olene
1 year ago
B) Report wages
AM
Ammie
1 year ago
A) Hire and fire
BO
Bobbye
1 year ago
Haha, this question is like a game of 'which one of these is not like the other?' The employer has to be hands-off with the leased employee.
CH
Chantell
1 year ago
C) Set rate of pay
MU
Muriel
1 year ago
B) Report wages
KA
Kanisha
1 year ago
A) Hire and fire
JE
Jesusa
1 year ago
I think option D is the correct answer. The employer doesn't supervise the work of the leased employee, that's the leasing company's job.
AN
Antione
1 year ago
C) Set rate of pay
AL
Almeta
1 year ago
B) Report wages
VE
Veronika
1 year ago
A) Hire and fire
CA
Cammy
1 year ago
Hmm, I'm not sure. Doesn't the employer still have some control over the leased employee's work, like setting the rate of pay and supervising them? This is a tricky question.
AN
Angella
1 year ago
That makes sense. The employer still has some control, but the leasing company has more responsibility.
SH
Sheridan
1 year ago
The leasing company actually takes care of setting the rate of pay and supervising the work.
YU
Yun
1 year ago
D) Supervise the work
CA
Catarina
1 year ago
C) Set rate of pay
VI
Vilma
1 year ago
B) Report wages
NA
Natalya
1 year ago
A) Hire and fire
AL
Almeta
1 year ago
I agree with Frank. The employer is basically outsourcing the HR responsibilities to the leasing company.
FR
Frank
2 years ago
Option A seems to be the correct answer. The employer doesn't have the ability to hire and fire the leased employee since that's handled by the leasing company.
MI
Michal
1 year ago
Yes, the employer still supervises the work even though the employee is leased.
KE
Kelvin
1 year ago
D) Supervise the work
JO
Joanna
1 year ago
That makes sense, the leasing company is responsible for that aspect.
SA
Sage
1 year ago
A) Hire and fire
DE
Della
2 years ago
But if the employer is leasing the employee, wouldn't they still be responsible for reporting wages?
MA
Mariann
2 years ago
I disagree, I believe the answer is D) Supervise the work.
DE
Della
2 years ago
I think the answer is B) Report wages.