What is required of the recipient employer regarding leased employees?

The requirement that the recipient employer must control the services provided by leased employees is rooted in the definition and treatment of leased employees under the Internal Revenue Code (IRC). For an employee to be classified as a leased employee, the recipient employer needs to exert control over the work that these employees perform. This means that the recipient employer must direct the activities and tasks of leased employees to ensure they are integrated within the employer's business operations.

By maintaining this level of control, the recipient employer can ensure compliance with various employee benefit and tax regulations that pertain to the treatment and conduct of these workers. This oversight helps determine whether such employees can be treated as coworkers for benefits purposes, such as contributions to a retirement plan.

The other options—providing housing, offering health benefits, and negotiating salaries—are not specifically required for the classification of leased employees. While these may be considerations in certain situations, they do not pertain directly to the core requirement that the employer must exercise control over the leased employees' services, making control the critical factor in this context.