To the editor:

I empathize with the plight of employers as indicated by Mr. Chavez in his letter which appeared in the Forum on Feb. 15.As a certified employee benefits specialist for a large employer, I am painfully aware of escalating costs of health benefits and other costs associated with doing business. It is next to impossible for small employers to compete effectively with large employers with respect to employee benefits.

Recent studies show a good benefits package to be more important to employees than actual salary. Compounding the ability of smaller employers to obtain a good benefits package at a good price is a new provision of the Internal Revenue Code, Section 89, which, simply stated, is designed to prevent discrimination in the provision of health benefits by employers.

There is a lifeboat, however, and that is employee leasing. Employers are cautioned, though, that not all employee leasing companies are created equal. Most employee leasing companies are not doing business legitimately in America today. Most are, at best, cleverly disguised payroll operations or a co-and-joint employer with their client.

A true legal employer in a leasing arrangement will be 100 percent at-risk for payroll - no advance billing or swapping of checks. The leasing company will provide universal employee benefits. The same benefit package will be in place for all employees, regardless of who the client is. Additionally, a true employee leasing company will assume sole responsibility for all employee legal liabilities.

As a former acting director of the IRS Planning Office has stated, "Leasing companies are going into business with relatively few assets and very quickly accumulating large pension benefits, employment and withheld income tax liabilities, and then failing and leaving those liabilities unpaid. It is very, very important to look carefully at who you are dealing with."

Kenneth G. Topham Jr., CEBS