Co-employment

Co-employment is a contractual arrangement where a client company shares certain employment responsibilities with a professional employer organization (PEO). Co-employment offers various benefits for businesses, including reliable HR support, talent acquisition assistance, and compliance assistance. However, it's essential to understand the risks, myths, and differences between co-employment and other arrangements when making decisions for your organization's HR needs and long-term growth.

1. Contractual Agreement: The client company and the PEO sign a written contract, making both entities legal co-employers. This agreement outlines the responsibilities of each party.

2. Co-Employer Responsibilities: The PEO usually handles HR tasks such as hiring, firing, work authorization checks, payroll, compliance with employment laws, and providing HR support.

3. Company Responsibilities: The client company manages the day-to-day work of its employees, including coaching, assigning tasks, conducting evaluations, and providing work conditions and equipment.

1. Reliable HR Support: Access to HR experts without the need to build an internal HR department.

2. Talent Acquisition: Assistance in attracting skilled workers and providing support in hiring, onboarding, and performance management.

3. Compliance Assistance: Help in complying with employment laws, regulations, and risk management.

4. Outsourced Payroll: Management of payroll tasks, reducing errors and penalties.

5. Workers' Compensation Insurance: Assistance in managing workers' compensation coverage and handling claims.

6. Competitive Benefits: Access to cost-effective healthcare insurance and additional benefit plans.

Tax Errors and Misclassification: Risk of tax errors and worker misclassification can be mitigated by working with certified co-employers and being diligent about independent contractor classification.

1. Co-Employment is Bad: Co-employment is not inherently bad but requires clarity in roles and compliance with employment laws.

2. Risky for Hiring Independent Contractors: Hiring independent contractors while in a co-employment agreement is not necessarily risky if done correctly.

3. Staffing Agency Removes Risks: Using a staffing agency does not eliminate risks associated with co-employment.

4. Replaces HR Team: Co-employment does not replace the HR team but augments its capabilities.

1. Joint Employment: In joint employment, two separate employers govern the same employees.

2. Employee Leasing: Employee leasing involves a staffing agency providing temporary workers, whereas co-employment focuses on HR support.

3. Employer of Record (EOR): An EOR, like Helios, acts as the legal employer of the workers and provides additional legal protection and support for international hiring.

1. Co-employers cannot directly hire international workers.

2. EORs can provide international hiring support, including compliance with local laws and regulations, and competitive employee benefits.

1. Consider long-term plans for growth and expansion when choosing between PEOs and EORs.

2. EORs, like Helios, offer comprehensive support for international growth, including payroll, compliance, and hiring global talent.