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What is Co-Employment?

Also referred to as a “Joint Employer” relationship, co-employment is often used to describe the relationship among two or more employers when each has specific actual or potential legal responsibilities to the same worker or group of workers. The client company and the Professional Employer Organization (PEO) become “co-employers”.  The client retains workplace management and supervisory control of the “co-employees” and the Professional Employer Organization (PEO), the “employer of record”, becomes the ‘Off-Site” Payroll and HR office for the “co-employees”.

The PEO relationship involves a contractual allocation and sharing of employer responsibilities. This shared employment relationship is called co-employment. The PEO assumes the responsibilities for payroll and human resources administration, safety and risk management, workers’ compensation, and regulatory compliance.

The client directs and controls their staff, providing the equipment, instruments, supplies, tools, and workplace assignments. The PEO can assist in ensuring that staff is provided with a worksite that is safe, conducive to productivity and operated in compliance with employment laws and regulations.  Additionally, the PEO provides workers’ compensation insurance, unemployment insurance and a broad range of employee benefits programs. Employees maintain their eligibility for benefits, pay rate and job seniority that they have accumulated and in many cases find that they have access to better benefits through the PEO arrangement.

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