What is Co-employment?

An arrangement whereby two organizations have some legal responsibility or oversight for the same employee.

What is Co-employment?

Co-employment is a relationship between two or more employers in which they share legal responsibilities for a group of employees. This can occur when a company partners with a staffing agency or professional employer organization (PEO) to manage certain HR functions, such as payroll, benefits administration, and employee management.

Under co-employment, the employees work for both the primary employer and the staffing agency or PEO, and both entities share responsibility for employment-related matters, such as compliance with labor laws, payment of wages and taxes, and provision of benefits. In this arrangement, the primary employer typically retains control over day-to-day operations and management of the employees, while the staffing agency or PEO handles administrative and HR-related tasks.

Co-employment can provide several benefits for employers, including access to a larger pool of talent, cost savings on HR-related tasks, and reduced legal and financial risks. However, it's important for both the primary employer and the staffing agency or PEO to understand their respective roles and responsibilities and ensure compliance with labor laws and regulations.

Employers who engage in co-employment should also have a clear agreement or contract outlining the terms of the arrangement, including the specific HR functions to be handled by the staffing agency or PEO, the duration of the arrangement, and the respective liabilities and responsibilities of each party.