Legal information

What is an employee lease company

Employee lease is one of the forms of mediation of employment, which has recently become a trend in the labor market in the member states of the European union. The principle of employee lease is temporary placement of employee to perform work for another employer (user). This is done on the basis of an arrangement in the employment contract or agreement for work between the relevant employee and the employee lease agency. Thus employer (user) does not accept the employee into the employment relationship, but he only "leases" the employee from the employee lease company based on the agreement between them. Employee lease is in compliance with the valid legislation reserved only for the employee lease companies, which are authorized to perform it exclusively on the basis of a relevant permit issued by the Ministry of Labour and Social Affairs of the Czech republic.

For the job seekers, the term could be confusing, because it is very similar to the term personnel agency. However, these terms have very different meanings from the labour market perspective. Personnel agency is generally defined as "private employment agency". This agency is seeking for suitable candidates for designated positions based on specific request of the employer (company). The idea is that the companies employ the candidates for primary or secondary employment as their own employees. Personnel agency exclusively mediates the candidates' employment with the employer and does not close any contract with the employee.

On the other side, the employee lease company directly employs the job seekers and then temporarily "leases" them to companies for remuneration, where the employee performs the same or similar work like the core employees of the stated company. During the temporary placement, the employee is assigned work, organized, led, managed and controlled by the managers of the stated company. Temporarily assigned employee is still an employee of the employee lease company, which remunerates him.

Link to relevant permit: