Leased Employee

An individual who performs services for another person (the Recipient) under an arrangement between the recipient and the third person (the Organization) who is otherwise treated as the individual’s employer. The leased employee is treated as the recipient’s employee if he or she has performed services for the recipient pursuant to an agreement with the leasing organization on a substantially full time basis for a period of at least 12 months and the individual’s services are performed under the primary direction or control of the recipient. Substantially full time basis for a year means 1,500 hours or 75% of the average number of hours worked by regular employees in similar positions. Substantially full time leased employees can impact the required coverage/nondiscrimination testing for the plan.

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