SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
      FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

  (Mark One)
      [X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934

                 For the quarterly period ended September 30, 2000.

                                      or

      [ ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934

            For the transition period from ________________ to__________________

                           Commission File No. 0-28148

                               STAFF LEASING, INC.
             (exact name of registrant as specified in its charter)

                Florida                                         65-0735612
     (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

      600 301 Blvd West, Suite 202
            Bradenton, FL                                          34205
(Address of principal executive offices)                         (Zip Code)

(Registrant's Telephone Number, Including Area Code):  (941) 748-4540


      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [ x ] No [ ]


      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.

Class of common stock                      Outstanding as of November 9, 2000
---------------------                      ----------------------------------
Par value $0.01 per share                              20,962,507


<PAGE>




                                TABLE OF CONTENTS



PART I.           FINANCIAL INFORMATION
<TABLE>
<CAPTION>

                                                                                      Page
                                                                                     ------
<S>                                                                                  <C>
      ITEM 1.    Financial Statements

    Condensed Consolidated Statements of Operation (unaudited)for the
            Three and Nine Months Ended September 30, 1999 and 2000    . . . . . . .   3

    Condensed Consolidated Balance Sheets as of December 31, 1999 and September
            30, 2000 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . .   4

    Condensed Consolidated Statement of Changes in Shareholders'
          Equity (unaudited) for the Nine Months Ended September 30, 2000 . . . . .    5

    Condensed Consolidated Statements of Cash Flows (unaudited)
            for the Nine Months Ended September 30, 1999 and 2000 . . . . . . . . .    6

    Notes to Condensed Consolidated Financial Statements (unaudited) . . . . . . . .   7


      ITEM 2.   Management's Discussion and Analysis of Financial Condition
                and  Results  of  Operations . . . . . . . . . . . . . . . . . . . .  10




PART II. OTHER INFORMATION

      ITEM 1.   Legal Proceedings   . . . . . . . . . . . . . . . . . . . . . . . . .  14

      ITEM 5.   Other Information   . . . . . . . . . . . . . . . . . . . . . . . . .  14

      ITEM 6.   Exhibits and Reports on Form 8-K .  . . . . . . . . . . . . . . . . .  15


SIGNATURES. . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . 16

</TABLE>

                                       2

<PAGE>



PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

                      STAFF LEASING, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                 For the three months                 For the nine months
                                                                  ended September 30,                 ended September 30,

                                                            --------------------------------   -----------------------------------
                                                                 1999             2000              1999               2000
                                                            ---------------  ---------------   ----------------  -----------------
                                                                        (in $000's, except share and per share data)
<S>                                                          <C>             <C>               <C>                <C>

Revenues                                                          $680,502         $783,645        $1,992,108         $2,294,802
                                                            ---------------  ---------------   ----------------  -----------------
Cost of services:
   Salaries, wages and payroll taxes                               619,858          714,623         1,811,232          2,088,629
   Benefits, workers' compensation, state unemployment
       taxes and other costs                                        27,211           44,825            86,110            134,462
                                                            ---------------  ---------------   ----------------  -----------------
             Total cost of services                                647,069          759,448         1,897,342          2,223,091
                                                            ---------------  ---------------   ----------------  -----------------
Gross profit                                                        33,433           24,197            94,766             71,711
                                                            ---------------  ---------------   ----------------  -----------------

Operating expenses:
   Salaries, wages and commissions                                  15,546           14,570            43,994             45,620
   Other general and administrative                                  6,550            7,733            19,320             23,236
   Depreciation and amortization                                     1,988            2,142             5,556              6,551
                                                            ---------------  ---------------   ----------------  -----------------
             Total operating expenses                               24,084           24,445            68,870             75,407
                                                            ---------------  ---------------   ----------------  -----------------
Operating income (loss)                                              9,349             (248)           25,896             (3,696)
Interest income, net                                                   958            1,330             2,329              3,469
Interest expense                                                         -                -               (21)                (1)
Other non operating expense                                              -              (26)             (850)            (1,378)
                                                            ---------------  ---------------   ----------------  -----------------
Income (loss) before income tax provision                           10,307            1,056            27,354             (1,606)
Income tax provision (benefit)                                       3,897              396            10,341               (602)
                                                            ---------------  ---------------   ----------------  -----------------
Net income (loss)                                                  $ 6,410           $  660         $  17,013          $  (1,004)
                                                            ===============  ===============   ================  =================
Net income (loss) per share
   - Basic                                                      $     .30        $    .03         $     .78         $     (.05)
   - Diluted                                                    $     .29        $    .03         $     .76         $     (.05)
                                                            ===============  ===============   ================  =================
Weighted average shares outstanding
   - Basic                                                          21,725           21,284            21,802             21,524
   - Diluted                                                        22,147           21,330            22,284             21,540
                                                            ===============  ===============   ================  =================
</TABLE>


            See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                      STAFF LEASING, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                 December 31, 1999           September 30, 2000
                                                                                                  unaudited
                                                                 ----------------------   -------------------------
                                                                 (in $000's, except share and per share data)
<S>                                                               <C>                      <C>
                            ASSETS
Current assets:
  Cash and cash equivalents                                       $ 23,081                 $      36,582
  Certificates of deposit - restricted                               7,777                         7,781
  Marketable securities                                             34,914                        51,965
  Accounts receivable, net                                          41,631                        63,277
  Other current assets                                              11,494                         5,820
                                                                 ---------------           -------------
         Total current assets                                      118,897                       165,425

Property and equipment, net                                         28,833                        24,901
Goodwill, net of accumulated amortization
  of $4,513 and $5,062 respectively                                 10,159                         9,609
Deferred income tax asset                                            1,950                         1,199
Other assets                                                         3,731                         4,912
                                                                 --------------           ---------------
                                                                 $ 163,570                 $     206,046
                                                                ===============           ===============

             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accrued insurance premiums and health
     reserves                                                    $  22,724                 $      44,662
  Accrued payroll and payroll taxes                                 35,574                        65,586
  Accounts payable and other accrued liabilities                    10,888                         6,524
  Deferred income tax liabilities                                    8,770                         6,776
  Customer deposits and prepayments                                  3,523                         3,741
                                                                 --------------           ---------------
         Total current liabilities                                  81,479                       127,289

Long-term liabilities                                                1,335                         1,373
Commitments and contingencies (See notes)

Shareholders' equity :
  Common stock, $.01 par value                                         217                           211
         Shares authorized:          100,000,000
         Shares issued and outstanding:
               December 31, 1999 -    21,709,542
               September 30, 2000 -   21,106,007
  Additional paid in capital                                        42,987                        40,551
  Retained earnings                                                 37,701                        36,697
  Other                                                               (149)                          (75)
                                                                 ---------------            -------------
         Total shareholders' equity                                 80,756                        77,384
                                                                 ---------------            --------------
                                                                 $ 163,570                  $     206,046
                                                                 ===============            ==============
</TABLE>

            See notes to condensed consolidated financial statements.

                                       4
<PAGE>





                      STAFF LEASING, INC. AND SUBSIDIARIES
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                                       Accumulated
                                     Common                 Additional                    Other
                                     Stock       Common      Paid In                  Comprehensive   Retained
                                    (shares)      Stock      Capital       Other      Income (Loss)   Earnings        Total
                                    ----------  --------   ------------   --------    -------------  ----------     ----------
                                                                     (in $000's except share data)
<S>                                 <C>          <C>        <C>            <C>         <C>            <C>             <C>
Balance, January 1, 2000            21,709,542      $  217   $ 42,987        $ (109)      $ (40)       $ 37,701      $ 80,756
Repurchase and retirement of
  common stock                        (628,735)         (6)    (2,495)                                                 (2,501)

Tax benefit of restricted
  stock plan vesting                                               76                                                      76
Other                                                             (17)           45                                        28

Unrealized gain on marketable
  securities                                                                                 29
Net loss                                                                                                 (1,004)


Total comprehensive loss                                                                                                 (975)
                                 --------------- --------  ------------ ------------  -------------- -----------   -------------
Balance, September 30,2000          21,106,007     $  211    $ 40,551        $  (64)     $  (11)       $ 36,697      $ 77,384
                                 =============== ========  ============ ============  ============== ===========   =============
</TABLE>

            See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                      STAFF LEASING, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                                 For the nine months ended
                                                                                       September 30,
                                                                          -----------------------------------------
                                                                                 1999                  2000
                                                                          --------------------   ------------------
                                                                                        (in $000's)
<S>                                                                        <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                        $ 17,013              $  (1,004)
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
          Depreciation and amortization                                         5,556                  6,551
          Deferred taxes, net                                                     126                 (1,151)
          Provision for bad debts                                                 425                    350
          Other                                                                    71                   (452)
          Changes in operating working capital:
             Decrease (increase) in certificates of deposit -
               restricted                                                         598                     (4)
             Increase in accounts receivable                                  (23,464)               (21,996)
             Decrease in other current assets                                   2,253                  5,675
             Decrease in accounts payable and other accrued
               liabilities                                                     (1,038)                (4,364)
             Increase in accrued payroll and payroll taxes                     23,070                 30,011
             (Decrease) increase in accrued insurance premiums and
                health reserves                                                  (180)                21,938
             Increase in income taxes payable                                   3,111                      -
             (Decrease) increase  in customer deposits and
               prepayments                                                       (147)                   218
          Decrease (increase) in other long-term assets                           105                 (1,181)
          Decrease (increase) in long term liabilities                           (245)                    38
                                                                          --------------------   ------------------
       Net cash provided by operating activities                               27,254                 34,629
                                                                          --------------------   ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of marketable securities                                         (42,950)              (114,491)
    Maturities of marketable securities                                        28,500                 97,824
    Capital expenditures                                                       (6,197)                (1,963)
                                                                          --------------------   ------------------
       Net cash used in investing activities                                  (20,647)               (18,630)
                                                                          --------------------   ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayment of shareholders' notes receivable                                     7                      3
    Repurchase and retirement of common stock                                  (4,152)                (2,501)
                                                                          --------------------   ------------------
       Net cash used in financing activities                                   (4,145)                (2,498)
                                                                          --------------------   ------------------
    Net increase in cash                                                        2,462                 13,501
Cash and cash equivalents - beginning of period                                15,412                 23,081
                                                                          --------------------   ------------------
Cash and cash equivalents - end of period                                   $  17,874               $ 36,582
                                                                          ====================   ==================
Supplemental disclosure of cash flow information:
    Income taxes paid                                                        $  5,200                  $  63
                                                                          ====================   ==================
    Interest paid                                                            $     21              $       -
                                                                          ====================   ==================
</TABLE>

            See notes to condensed consolidated financial statements.

                                       6
<PAGE>



                      STAFF LEASING, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    UNAUDITED
                  (in $000's, except share and per share data)

1. GENERAL

      The accompanying unaudited condensed consolidated financial statements of
Staff Leasing, Inc. ("the Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q. These financial statements should be read in
conjunction with the audited condensed consolidated financial statements and
notes thereto for the year ended December 31, 1999, included in the Company's
Form 10-K. The financial information furnished reflects all adjustments,
consisting only of normal recurring accruals, which are, in the opinion of
management, necessary for a fair presentation of the financial position, results
of operations and cash flows for the interim periods presented.

      The Company's operations are currently conducted through a number of
subsidiary limited partnerships (the "OLPs"). The consolidated operations of the
Company exclude intercompany accounts and transactions. Certain
reclassifications have been made to the consolidated financial statements of
prior periods to conform to the current period presentation.

      In June 1998, the Financial Accounting Standards Board issued SFAS 133,
Accounting for Derivative Instruments and Hedging Activities (later amended by
SFAS 138), which will be in effect on January 1, 2001 for the Company. SFAS 133
requires, among other things, that all derivatives be recognized in the
consolidated balance sheets as either assets or liabilities and measured at fair
value. The corresponding derivative gains and losses should be reported based
upon the hedge relationship, if such a relationship exists. Changes in the fair
value of derivatives that are not designated as hedges or that do not meet the
hedge accounting criteria in FAS 133 are required to be reported in income. The
Company is in the process of quantifying the impact of SFAS 133 on its financial
statements.


2. ACCOUNTS RECEIVABLE

   Accounts receivable consisted of the following:

<TABLE>
<CAPTION>
                                                          December 31,           September 30,
                                                             1999                     2000
                                                          ------------           -------------
<S>                                                       <C>                   <C>
Billed to clients ......................................  $ 11,391                 $ 5,260
Unbilled revenues ......................................    30,980                  59,023
                                                           -------                 -------
                                                            42,371                  64,283
      Less:   Allowance for doubtful accounts............     (740)                 (1,006)
                                                           -------                 -------
                                                          $ 41,631                 $63,277
                                                          ========                 =======
</TABLE>

3. PROPERTY AND EQUIPMENT

   Property and equipment (at cost) was comprised of the following:

<TABLE>
<CAPTION>

                                                          December 31,           September 30,
                                                             1999                     2000
                                                          ------------           -------------
<S>                                                       <C>                   <C>
Leasehold improvements..................................    $ 1,832                $2,065
Furniture and fixtures..................................      2,944                 3,189
Vehicles................................................        103                    66
Equipment...............................................      2,803                 2,837
Computer hardware and software..........................     38,066                39,434
                                                            -------               -------
Total property and equipment............................     45,748                47,591
      Less accumulated depreciation.....................    (16,915)              (22,690)
                                                            --------             --------
                                                            $28,833               $24,901
                                                            ========             ========
</TABLE>

For the nine months ended September 30, 2000 depreciation expense was $6,001.


                                       7
<PAGE>

                      STAFF LEASING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  (in $000's, except share and per share data)


4. COMMITMENTS AND CONTINGENCIES

   On April 30, 1999, a shareholder of the Company brought a class action in the
Twelfth Judicial Division, Manatee County, Florida against the Company and
certain of its directors alleging that the directors and senior officers of the
Company breached their fiduciary duty to shareholders by failing to pursue a
proposal from Paribas Principal Partners to acquire the Company in order to
entrench themselves in the management of the Company. Plaintiff seeks injunctive
relief and unspecified damages including attorneys' and experts' fees. The
parties have engaged in limited discovery and in settlement discussions. The
Company believes the lawsuit is without merit.

      The Company is a party to certain pending claims which have arisen in the
normal course of business, none of which, in the opinion of management, is
expected to have a material adverse effect on the consolidated financial
position or results of operations if adversely resolved.

   The Company's employer and health care operations are subject to numerous
Federal, state and local laws related to employment, taxes and benefit plan
matters. Generally, these regulations affect all companies in the U.S. However,
the regulatory environment for professional employer organizations ("PEOs") is
an evolving area due to uncertainties resulting from the non-traditional
employment relationships. Many Federal and state laws relating to tax and
employment matters were enacted prior to the development of PEOs and do not
specifically address the obligations and responsibilities of these PEO
relationships. If the IRS concludes that PEOs, are not "employers" of certain
worksite employees for purposes of the Internal Revenue Code of 1986, as amended
(the "Code"), the tax qualified status of the Company's 401(k) retirement plan
as in effect prior to April 1, 1999 could be revoked, its cafeteria plan may
lose its favorable tax status and the Company may no longer be able to assume
the client's Federal employment tax withholding obligations. Any adverse
developments in the above noted areas could have a material effect on the
Company's financial condition and future results of operations.


5. EQUITY

      In August 1998, the Company's Board of Directors approved a program to
repurchase up to two million shares of the Company's common stock. Purchases may
be made from time to time depending upon the Company's stock price, and will be
made primarily in the open market, but may also be made through privately
negotiated transactions. In 1998, the Company repurchased 1.6 million shares of
its common stock for a total cost of $21.0 million. In January 1999, the
Company's Board of Directors increased this share repurchase plan to three
million shares. In 1999, the Company repurchased, for retirement, 412,000 shares
of its common stock for a total cost of approximately $4 million. In the nine
months ending September 30, 2000, the Company repurchased 620,955 of its shares
from the open market at a cost of $2.5 million, and 7,780 restricted shares from
a former employee in accordance with the terms of the Company's restricted plan.


6. INCOME TAXES

      The Company records income tax expense using the asset and liability
method of accounting for deferred income taxes. Under such method, deferred tax
assets and liabilities are recognized for the expected future tax consequences
of temporary differences between the financial statements and the income tax
bases of the Company's assets and liabilities. The Company's effective tax rate
provides for Federal and state income taxes. The effective tax rate for the
three and nine months ended September 30, 2000 was 37.5%, and a tax benefit was
recognized on the net loss from operations.

7. EARNINGS PER SHARE (EPS)

      The number of common stock equivalents included in the diluted weighted
average shares outstanding for the three and nine months ended September 30,
1999, related to warrants issued in connection with the Company's reorganization
and initial public offering, was 421,518 and 462,465, respectively, and for the
three and nine months ended September 30, 2000 was 0. Also included as common
stock equivalents in diluted weighted average shares outstanding were options
granted under the Company's stock option plan, which totaled 449 and 19,326 for
the three and nine months ended September 30, 1999 respectively, and 45,736 and
16,112 for the three and nine months ended September 30, 2000 respectively.


                                       8
<PAGE>
                      STAFF LEASING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The reconciliation of net income (loss) attributable to common stock and shares
outstanding for the purposes of calculating basic and diluted earnings per share
for the three and nine months ended September 30, 1999 and 2000 is as follows:

<TABLE>
<CAPTION>
                                                           Income             Shares         Per Share
                                                           (Loss)
                                                         (Numerator)      (Denominator)       Amount
                                                       --------------   -----------------  ------------
                                                         (in $000's)        (in 000's)
<S>                                                     <C>               <C>               <C>
For the Three Months Ended September 30, 1999:
----------------------------------------------
Basic EPS:
Net income                                               $    6,410            21,725        $  .30
Effect of dilutive securities:
Warrants                                                                          422
Options                                                                            -
                                                                        ---------------
Diluted EPS:
Net income                                               $    6,410            22,147        $  .29
                                                        ==============  ===============   ============

For the Nine Months Ended September 30, 1999:
---------------------------------------------
Basic EPS:
Net income                                               $   17,013            21,802        $  .78
Effect of dilutive securities:
Warrants                                                                          463
Options                                                                            19
                                                                        ---------------
Diluted EPS:
Net income                                               $   17,013            22,284        $  .76
                                                        ==============  ===============    ============

For the Three Months Ended September 30, 2000:
----------------------------------------------
Basic EPS:
Net Income                                               $     660             21,284        $  .03

Effect of dilutive securities:
Warrants                                                                            -
Options                                                                            46
                                                                       ---------------
Diluted EPS:
Net Income                                               $     660             21,330        $  .03
                                                        ============   ================    ===========
For the Nine Months Ended September 30, 2000:
---------------------------------------------
Basic EPS:
Net Loss                                                 $  (1,004)            21,524        $  (.05)
                                                        =============   ================  ==============
Effect of dilutive securities:
Warrants                                                                           -
Options                                                                            16
                                                                       ----------------
Diluted EPS:
Net Loss                                                $   (1,004)            21,540        $  (.05)
                                                       ==============  ================  =============

</TABLE>


                                       9

<PAGE>





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

   The following table presents the Company's results of operations for the
three and nine months ended September 30, 1999 and 2000, expressed as a
percentage of revenues:

<TABLE>
<CAPTION>
                                                        FOR THE THREE             FOR THE NINE
                                                        MONTHS ENDED              MONTHS ENDED
                                                        SEPTEMBER 30,             SEPTEMBER 30,
                                                       ----------------           --------------
                                                        1999      2000             1999     2000
                                                        ----      ----             ----     ----

<S>                                                     <C>        <C>            <C>      <C>
Revenues...................................              100.0%    100.0%          100.0%   100.0%
Cost of services:
  Salaries, wages and payroll taxes........               91.1      91.2            90.9     91.0
  Benefits, workers' compensation, state
     unemployment taxes and other costs....                4.0       5.7             4.3      5.9
                                                        ------    ------           -----    -----

          Total cost of services...........               95.1      96.9            95.2     96.9
                                                        ------    ------           -----    -----
Gross profit...............................                4.9       3.1             4.8      3.1
                                                        ------    ------           -----    -----

Operating expenses:
  Salaries, wages and commissions..........                2.3       1.9             2.2      2.0
  Other general and administrative.........                1.0       1.0             1.0      1.0
  Depreciation and amortization............                 .3        .3              .3       .3
                                                        ------    ------           -----    -----
Total operating costs......................                3.5       3.2             3.5      3.3
                                                        ------    ------           -----    -----

Operating income (loss) ...................                1.4        -              1.3      (.2)
Interest income, net ......................                 .1        .2              .1       .2
Other non-operating expenses ..............                 -         -                -       -
                                                        ------    -------           -----    -----

Income (loss) before income taxes .........                1.5        .1             1.4       -
Income tax (provision) benefit ............                 .6        -               .5       -
                                                         -----    -------           ------   -----

Net income (loss) .........................                 .9        .1              .9       -
                                                        ======    ======           =====    =====
</TABLE>


Three Months Ended September 30, 2000 Compared to Three Months Ended
September 30, 1999

      Revenues were $783.6 million for the three months ended September 30,
2000, compared to $680.5 million for the three months ended September 30, 1999,
representing an increase of $103.1 million, or 15.2%. This increase was due
primarily to increased wages of worksite employees. From September 30, 1999 to
September 30, 2000, the number of clients decreased 10.4% from 10,581 to 9,479.
The number of worksite employees decreased 2.8%, from 129,900 to 126,213.
Revenue growth exceeded headcount growth by 18.0%, due primarily to wage
inflation, expansion in higher wage markets and industry segments, and the
Company's new client selection criteria initiated in the first three quarters of
2000 which encourages solicitation of businesses paying better than average
wages for their trade or business. During the third quarter of 2000, the Company
terminated client relationships with approximately 3,700 employees that were
unprofitable or running low payroll volumes per employee. The Company did not
open any new sales offices in the third quarter of 2000. Three new sales offices
were opened in the third quarter of 1999.

      Cost of services was $759.4 million for the three months ended September
30, 2000, compared to $647.1 million for the three months ended September 30,
1999, representing an increase of $112.4 million, or 17.4%. Cost of services was
96.9% of revenues for the three months ended September 30, 2000, compared to
95.1% of revenues for the three months ended September 30, 1999.


                                       10
<PAGE>

      Salaries, wages and payroll taxes of worksite employees were $714.6
million for the three months ended September 30, 2000, compared to $619.9
million for the three months ended September 30, 1999, representing an increase
of $94.7 million, or 15.3%.

      Benefits, workers' compensation, state unemployment taxes and other costs
were $44.8 million for the three months ended September 30, 2000, compared to
$27.2 million for the three months ended September 30, 1999, representing an
increase of $17.6 million, or 64.7%. The Company has a new workers' compensation
program with CNA and the Texas Workers' Compensation Insurance Fund (Texas Fund)
which commenced on January 1, 2000. The Texas Fund is the provider of workers'
compensation insurance for clients based in Texas. The Texas Fund program is a
guaranteed cost insurance arrangement with a term of one year. The cost of the
premium is determined based on the industries serviced by the Company in Texas.
For the remainder of the country, the Company's workers' compensation carrier is
CNA. This program is an insured loss sensitive program for a term of one year.
The Company's workers' compensation costs increased in 2000 as a result of these
workers' compensation arrangements. The accrual for workers' compensation costs
is based upon payroll dollars paid to worksite employees. The accrual rate is
based upon the historical actuarial model of the Company, which is reflective of
prior loss experience, business mix and actual claims data. Accruals for
subsequent periods will be affected by changes in the Company's business mix and
actual claims experience. The final costs of coverage will be determined by the
actual claims experience over time as claims close and by the administrative
costs of the program. In 1999, the Company's workers' compensation coverage was
provided by Liberty Mutual. This contract, which expired on December 31, 1999,
provided coverage on a guaranteed cost basis. Amounts due under this arrangement
were a fixed percentage of the Company's workers' compensation payroll.

      Gross profit was $24.2 million for the three months ended September 30,
2000, compared to $33.4 million for the three months ended September 30, 1999,
representing a decrease of $9.2 million, or 27.6%. This decrease is primarily
due to the increase in workers' compensation insurance costs. Gross profit was
3.1% of revenues for the three months ended September 30, 2000, compared to 4.9%
for the three months ended September 30, 1999.

      Operating expenses were $24.4 million for the three months ended September
30, 2000, compared to $24.1 million for the three months ended September 30,
1999, representing an increase of $.3 million, or 1.5%. Operating expenses were
3.2% of revenues for the three months ended September 30, 2000 compared to 3.5%
for the three months ended September 30, 1999.

      Salaries, wages and commissions were $14.6 million for the three months
ended September 30, 2000, compared to $15.5 million for the three months ended
September 30, 1999, representing a decrease of $1 million, or 6.3%. This
decrease was due in part to a reduction of the sales force as the Company
repositions the sales force to new targeted clients. Salaries, wages and
commissions were 1.9% of revenues for the three months ended September 30, 2000
compared to 2.3% for the three months ended September 30, 1999.

      Other general and administrative expenses were $7.7 million for the three
months ended September 30, 2000, compared to $6.6 million for the three months
ended September 30, 1999, representing an increase of $1.1 million, or 18.1%.
Other general and administrative expenses were 1.0% of revenues for the three
months ended September 30, 2000, and 1999.

      Depreciation and amortization expenses increased by $.2 million for the
three months ended September 30, 2000 compared to the three months ended
September 30, 1999, representing an increase of 7.8%. This increase was
primarily the result of the Company's investment in management information
systems.

      Interest income, net was $1.3 million for the three months ended September
30, 2000, compared to $1.0 million in the third quarter of 1999 due to the
increase in cash available for investment.

      Income tax expense of $.4 million for the three months ended September 30,
2000 represented a provision at an effective tax rate of 37.5% compared to $3.9
million tax expense for the three months ended September 30, 1999 at an
effective tax rate of 37.8%. The Company's effective tax rate for financial
reporting purposes differs from the statutory federal rate of 35% primarily
because of state income taxes and tax credits.

      Net income was $.6 million for the three months ended September 30, 2000,
compared to net income of $6.4 million for the three months ended September 30,
1999, representing a decrease of $5.8 million or 89.7%.


                                       11

<PAGE>

Nine Months Ended September 30, 2000 Compared to Nine Months Ended
September 30, 1999

      Revenues were $2,294.8 million for the nine months ended September 30,
2000, compared to $1,992.1 million for the nine months ended September 30, 1999,
representing an increase of $302.7 million, or 15.2%. This increase was due
primarily to increased wages of worksite employees. From September 30, 1999 to
September 30, 2000, the number of clients decreased 10.4% from 10,581 to 9,479.
The number of worksite employees decreased 2.8%, from 129,900 to 126,213.
Revenue growth exceeded headcount growth by 18.0%, due primarily to wage
inflation, expansion in higher wage markets and industry segments, and the
Company's new client selection criteria initiated in the first nine months of
2000 which encourages solicitation of businesses paying better than average
wages for their trade or business. During the first nine months of 2000, the
Company terminated client relationships with approximately 11,200 employees that
were unprofitable or running low payroll volumes per employee.

      Cost of services was $2,223.1 million for the nine months ended September
30, 2000, compared to $1,897.3 million for the nine months ended September 30,
1999, representing an increase of $325.8 million, or 17.2%. Cost of services was
96.9% and 95.2% of revenues for the nine months ended September 30, 2000 and
1999, respectively.

      Salaries, wages and payroll taxes of worksite employees were $2,088.6
million for the nine months ended September 30, 2000, compared to $1,811.2
million for the nine months ended September 30, 1999, representing an increase
of $277.4 million, or 15.3%.

      Benefits, workers' compensation, state unemployment taxes and other costs
were $134.5 million for the nine months ended September 30, 2000, compared to
$86.1 million for the nine months ended September 30, 1999, representing an
increase of 56.2%. Benefits, workers' compensation, state unemployment taxes and
other costs were 5.9% of revenues for the nine months ended September 30, 2000
and 4.3% for the nine months ended September 30, 1999. The Company has a new
workers' compensation program with CNA and the Texas Workers' Compensation
Insurance Fund (Texas Fund) which commenced on January 1, 2000. The Texas Fund
is the provider of workers' compensation insurance for clients based in Texas.
The Texas Fund program is a guaranteed cost insurance arrangement with a term of
one year. The cost of the premium is determined based on the industries serviced
by the Company in Texas. For the remainder of the country, the Company's
workers' compensation carrier is CNA. This program is an insured loss sensitive
program for a term of one year. The Company's workers' compensation costs
increased in 2000 as a result of these workers' compensation arrangements. The
accrual for workers' compensation costs is based upon payroll dollars paid to
worksite employees. The accrual rate is based upon the historical actuarial
model of the Company, which is reflective of prior loss experience, business mix
and actual claims data. Accruals for subsequent periods will be affected by
changes in the Company's business mix and actual claims experience. The final
costs of coverage will be determined by the actual claims experience over time
as claims close and by the administrative costs of the program. In 1999, the
Company's workers' compensation coverage was provided by Liberty Mutual. This
contract, which expired on December 31, 1999, provided coverage on a guaranteed
cost basis. Amounts due under this arrangement were a fixed percentage of the
Company's workers' compensation payroll.

      Gross profit was $71.7 million for the nine months ended September 30,
2000, compared to $94.8 million for the nine months ended September 30, 1999,
representing a decrease of $23.1 million, or 24.3%. This decrease is primarily
due to the increase in workers' compensation insurance costs. Gross profit was
3.1% of revenues for the nine months ended September 30, 2000, compared to 4.8%
for the nine months ended September 30, 1999.

      Operating expenses were $75.4 million for the nine months ended September
30, 2000, compared to $68.9 million for the nine months ended September 30,
1999, representing an increase of $6.5 million, or 9.5%. Operating expenses were
3.3% of revenues for the nine months ended September 30, 2000, and 3.5% of
revenues for the nine months ending September 30, 1999. Operating expenses for
the nine months ended September 30, 2000, included unusual expenses of $1.0
million related to management reorganization.

      Salaries, wages and commissions were $45.6 million for the nine months
ended September 30, 2000, compared to $44.0 million for the nine months ended
September 30, 1999, representing an increase of $1.6 million, or 3.7%. This
increase was due primarily to an increase in average employee wages and unusual
expenses of $.5 million related to management reorganization. Salaries, wages
and commissions were 2.0% of revenues for the nine months ended September 30,
2000 and 2.2% for the nine months ended September 30, 1999.

      Other general and administrative expenses were $23.2 million for the nine
months ended September 30, 2000, compared to $19.3 million for the nine months
ended September 30, 1999, representing an increase of $3.9 million, or 20.3%.
Other general and administrative expenses were 1.0% of revenues for the nine
months ended September 30, 2000, and 1999. Other general and administrative
expenses for the nine months ended September 30, 2000, included $.5 million in
unusual expenses related to management reorganization.


                                       12
<PAGE>

      Depreciation and amortization expenses increased by $1.0 million for the
nine months ended September 30, 2000 compared to the nine months ended September
30, 1999, representing an increase of 17.9%. This increase was primarily the
result of the Company's investment in management information systems.

      Interest income was $3.5 million for the nine months ended September 30,
2000, compared to $2.3 million of interest income for the first three quarters
of 1999, representing an increase of $1.2 million due to the increase in cash
available for investment.

      Other non-operating expense was $1.4 million for the nine months ended
September 30, 2000 compared to $.9 million for the nine months ended September
30, 1999. Other expense in the first nine months of 1999 was related to an
acquisition proposal received from Paribas Principal Partners in April 1999 and
reserves for a shareholder lawsuit filed in the second quarter of 1999. Other
expense in the first nine months of 2000 was related to the conclusion of the
strategic alternative process and to management reorganization.

      Income tax benefit of $.6 million was recorded for the nine months ended
September 30, 2000 at an effective tax rate of 37.5% compared to income tax
expense of $10.3 million for the nine months ended September 30, 1999 at an
effective tax rate of 37.8%.

      Net loss was $1.0 million for the nine months ended September 30, 2000,
compared to net income of $17.0 million for the nine months ended September 30,
1999, representing a decrease of $18.0 million or 105.9%.


Liquidity and Capital Resources

   The Company had approximately $96.3 million in cash, cash equivalents,
restricted cash and marketable securities at September 30, 2000.

      The Company had no long-term debt as of September 30, 2000. In July 1999,
the Company entered into an agreement with Bank of America (formerly
Nationsbank) for a $10 million revolving line of credit to provide for intraday
working capital needs. Borrowings under the credit facility bear interest at
variable rates based on the lender's base rate or LIBOR. No borrowings have been
made against the credit line. At September 30, 2000, the Company had net working
capital of $38.2 million versus $37.4 million as of December 31, 1999,
representing a increase of $.8 million, or 2.2%.

      The Company's primary short-term capital requirements relate to the
payment of accrued payroll and payroll taxes of its internal and worksite
employees, accounts payable for capital expenditures and the payment of accrued
workers' compensation expense and health benefit plan premiums. As of September
30, 2000, the Company had $7.8 million of restricted certificates of deposit,
with original maturities of less than one year, as collateral for certain
standby letters of credit issued in connection with the Company's health benefit
plans.

      Net cash provided by operating activities was $34.5 million for the nine
months ended September 30, 2000 compared to $27.3 million for the nine months
ended September 30, 1999, representing an increase of $7.2 million, or 26.4%.


Cautionary Note Regarding Forward-looking Statements

      In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "will result," "are expected to," "will continue," "estimated,"
and "projection") are not historical facts and may be forward-looking and,
accordingly, such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results or performance
of the Company to be materially different from any future results or performance
expressed or implied by such forward-looking statements. Such known and unknown
risks, uncertainties and other factors include, but are not limited to, the
following: (i) the potential for additional subsidies for health benefit plans;
(ii) volatility in workers' compensation rates and unemployment taxes; (iii)
possible adverse application of certain federal and state laws and the possible
enactment of unfavorable laws or regulation; (iv) impact of competition from
existing and new professional employer organizations; (v) risks associated with
expansion into additional states where the Company does not have a presence or
significant market penetration; (vi) risks associated with the Company's
dependence on key vendors; (vii) the possibility for client attrition; (viii)
risks associated with geographic market concentration and concentration of
clients in the construction industry; (ix) the financial condition of clients;
(x) the failure to properly manage growth and successfully


                                       13

<PAGE>

integrate acquired companies and operations; and (xi) other factors which are
described in further detail in the Company's filings with the Securities and
Exchange Commission.

      The Company cautions that the factors described above could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company. Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

PART II.   OTHER INFORMATION

ITEM 1.    Legal Proceedings

      Lawrence E. Egle v. Staff Leasing, Inc., et al. On April 30, 1999 the
plaintiff, a shareholder of the Company, brought this class action alleging that
the directors and senior officers of the Company breached their fiduciary duty
to shareholders by failing to pursue a proposal from Paribas Principal Partners
to acquire the company in order to entrench themselves in the management of the
Company. Plaintiff seeks injunctive relief and unspecified damages including
attorneys' and experts' fees. The Company believes the lawsuit is wholly without
merit.

      The Company is not a party to any other material pending legal proceedings
other than routine legal matters incidental to its business. The Company
believes that the ultimate resolution of these matters would not have a material
adverse effect on its financial condition or results of operations.

ITEM 5.    Other Information

       Michael K. Phippen was named Chief Executive Officer of Staff Leasing,
Inc. as of July 1, 2000. Mr. Phippen has over 20 years of experience in the
closely related staffing industry, most recently as Chief Executive Officer and
President of Westaff, a leading provider of staffing services in the United
States and Europe.

       On July 7, 2000, the Company announced the election of Michael K. Phippen
to the position of Chairman of the Board of Directors. He succeeds Elliot B.
Ross, who resumed his role as an independent director

       Michael W. Ehresman was hired September, 2000 as Senior Vice President of
Strategic Initiatives. Mr. Ehresman is a Certified Public Accountant with over
18 years of financial and business experience and spent the last eight years
with Westaff, Inc., most recently as its Senior Vice President and Treasurer.
Prior to joining Westaff, he spent ten years in public accounting with
PricewaterhouseCoopers, LLP and KPMG. Mr. Ehresman will be responsible for a
variety of initiatives that include strategic partnerships and strategic
planning.

      Staff Leasing, Inc. loaned Michael K. Phippen, Chief Executive Officer,
$1.6 million on August 31, 2000 with an interest rate of 6.50% per annum. The
loan was to facilitate his purchase of a home in Bradenton, Florida pending the
sale of his residence in California. The loan and interest of $5,200 were paid
in full on September 18, 2000.

       On August 30, 2000, the Board of Directors of Staff Leasing, Inc.
approved a resolution to amend the Company's contribution to the internal
employees' 401(k) retirement plan effective January 1, 2001. The contribution
was changed from a profit sharing to an employer matching contribution whereby
the Company will match 50% of the first 4% of any employee deferrals to the
401(k) plan to a maximum of 2% of eligible compensation. The service
requirement for internal employees will be reduced to six months from the
current one-year requirement. Richard Goldman was removed as a trustee of the
Staff Leasing 401(k) Retirement Trust and Michael K. Phippen was named
successor trustee of the plan.

       The Company has committed to renewing the CNA workers' compensation loss
sensitive insurance program for 2001. The arrangement with The Texas Workers'
Compensation Insurance Fund will not be renewed for the year 2001 and the work
site employees previously covered under that program will be included in the
2001 CNA program.

                                       14

<PAGE>

ITEM 6.    Exhibits and Reports on Form 8-K

      (a)         Exhibits

EXHIBIT
  NO.                      DESCRIPTION
-------                    -----------
10.21          Employment offer letter dated August 18, 2000 from Staff Leasing,
               Inc., accepted by Michael Ehresman.


27.1           Financial Data Schedule for the nine months ended September
               30, 2000.


                                       15
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.




                                                   STAFF LEASING, INC.



Dated:  November 14, 2000                          BY /s/ Michael Phippen
-------------------------------------------------------------------------------
                                                   Michael Phippen

                                                   Officer and Chairman of
                                                     the Board
                                                   (Principal Executive Officer)




Dated:  November 14, 2000                           BY /s/ John E. Panning
-------------------------------------------------------------------------------
                                                    John E. Panning

                                                    Chief Financial Officer and
                                                      Chief Operating Officer
                                                      and a Director
                                                    (Principal Financial and
                                                      Accounting Officer)


                                       16