Officials of the employee leasing industry say health insurance problems do not exist when companies are well run.

Several authorities estimate that 1,200 to 1,500 companies offer employee leasing, which covered about a million workers across the nation last year.

Employee leasing companies earn their money by charging a management fee.

But now, regulators in several states say a troubling number of employee leasing companies have turned out to be fraudulent.

The subcommittee called for changes in Federal law that could sharply limit the ability of employee leasing companies to offer discount insurance.

Some small-business men who are strong advocates of employee leasing agreed that there was reason to be wary.

While employee leasing may sound like temporary employment, leased employees are actually permanent full-time workers.

The practice is known as "employee leasing."

The employee leasing companies in our organization strive to adhere to a strict code of ethics.

"However," he said, "employee leasing is not a concept everyone is able to relate to.

Many employee leasing companies are legitimate.

"I happened to stumble on employee leasing.

A Growing Industry Employee leasing is an industry that has grown dramatically over the last few years.

Almost all categories of service jobs posted sizable gains, including a second straight jump in business services, mainly reflecting temporary help and employee leasing.

"We're definitely seeing a strong trend in using temporaries and part-timers and another thing - employee leasing," he said.

"On the surface, it looked like peaches and cream," Mr. Weidner said of employee leasing.

"Five years ago, employee leasing was being sold as the small-business man's salvation," said Peter Winn, a special assistant attorney general in Texas.

Arbeitnehmerüberlassungsgesetz (Employee Leasing Act)

Mr. O'Loughlin said he was about to hire an office manager, though the company could not really afford one, when a friend told him about employee leasing.

It's Not for Everyone But the employee leasing arrangement does not work well in every state, Mr. Lynn said.

"The Legal Regulation of Employment Agencies and Employee Leasing Companies in Sweden".

"For some people, employee leasing is just a new way of engaging in insurance fraud," said Tim Ryles, the Insurance Commissioner of Georgia.

Two states, Florida and Maine, have recently adopted rules aimed at curbing such abuses by employee leasing companies; other states are also concerned about the effect on health insurance.

It has not revised its estimates of tax cheating by corporations, large estates and by firms that do not hire their workers directly but instead contract with an employee leasing firm.

'Figured Out Everything' Mr. O'Loughlin of New England Asbestos Control said: "Employee leasing has put us on an even financial keel.