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Employee Leasing Arrangements

An 'Employee Leasing Arrangement' is defined as an arrangement whereby one business entity provides workers to another business entity under a contract that retains for the lessor a substantial portion of personnel management functions, such as payroll, direction and control of workers, and the right to hire and fire these workers provided by such lessor; provided, however, that the leasing arrangement is long term and not an arrangement to provide the lessee temporary help services during seasonal or unusual conditions, such as temporary skill shortages or temporary special assignments and projects.

The entity providing employee leasing services is referred to as an "employee leasing company". The entity receiving the services is referred to as a "client company".

  • The employee leasing company shall purchase and maintain a separate policy providing standard workers' compensation and employers liability insurance for each client company.

  • Each policy written to cover leased employees shall be issued with the employee leasing company as the named insured. Coverage under the policy shall be limited to the named insured's employees leased to the client company. The client company shall be identified by attaching to the policy the Massachusetts Employee Leasing Endorsement, WC200304B, naming the client.  

  • The experience of all of the employees leased to a client company shall be combined with the experience of the employees of the client company for purposes of calculating an experience modification. The experience modification, so calculated, shall be applied to the client company's policy and all policies maintained for it by a leasing company or leasing companies.

  • The employee leasing company shall purchase and maintain a separate policy providing standard workers' compensation and employers liability insurance for its own non-leased employees. This policy, restricting coverage to the employee leasing company's own non-leased employees, shall have attached the Massachusetts Exclusion of Coverage for Leased Employees Endorsement, WC200305A.

  • If the client company has its own non-leased employees, the client company must have a separate policy providing workers' compensation and employers liability for these employees, with the name of the client company as the named insured.

For more information on Employee Leasing Arrangements, refer to the Massachusetts Workers' Compensation and Employers Liability Manual, Part One, Rule IX- Special Conditions or Operations Affecting Coverage and Premium, E. Employee Leasing Arrangements.

Employee Leasing References:

September 28, 2018 - Circular Letter #2338 was issued to provide clarification regarding the issuance and reporting of policies Issued to Employee Leasing Companies, Professional Employer Organizations, Staffing Firms & Temporary Employment Agencies.
(Refer to Circular Letter #2338 dated September 28, 2018.)

December 1, 1997 - A revised Massachusetts Employee Leasing Endorsement #WC200304B approved
(Refer to Circular Letter #1787 dated November 13, 1997.)

April 18, 1995 - Rule IV - Classifications, D. Assignment of Classifications, in the Manual was changed to add - Premium for Leased Employees. 
(Refer to Circular Letter #1728 dated October 3, 1995.)

June 19, 1992 - Regulation 211 CMR 111.00 became a permanent regulation, replacing the version effective from March 31, 1992 until June 19,1992 as an emergency regulation.  (Refer to Circular Letter #1610 dated July 7, 1992 and Circular Letter #1612 dated October 28, 1992.)

March 31, 1992 - Massachusetts Regulation 211 CMR 111.00 was adopted by the Division of Insurance. The regulation directly effects employee leasing companies and the manner by which they must obtain and maintain coverage for their leased employees.  (Refer to Circular Letter #1602 dated April 23, 1992.)



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The Workers' Compensation Rating and Inspection Bureau of Massachusetts
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Boston, MA 02110