Co-employment: What is it?

Co-employment relationships can benefit small businesses without them losing any control.

If you’ve been considering a Professional Employer Organization (PEO), you may be confused by the relationship between your business and the PEO—also referred to as co-employment. So what exactly is co-employment, and how can it benefit your business? Read on to find out more.

What is co-employment?
The National Association of Professional Employer Organizations defines co-employment as “a contractual allocation and sharing of certain employer responsibilities between the PEO and the client.”

When a business enters into a client services arrangement with a PEO, they become the worksite co-employer of their company’s workforce. The PEO, on the other hand, becomes the administrative co-employer and assumes responsibility for the majority of the human resource management responsibilities and related administrative responsibilities.

What isn’t co-employment?
Although the terms are often associated with one another, co-employment is neither joint employment nor employee leasing. Joint employment is an agreement where two employers share control over the same group of employees. Employee leasing refers to a staffing firm providing temporary employees to a business.

Do you lose control over your business?  
Not at all. Businesses that work with a PEO remain in control of their organization and continue to be responsible for day-to-day assignments, supervision, recruiting, training, and overall business operations. Additionally, co-employment does not mean a PEO replaces your Human Resources department. Rather they algin with them to provide help where needed.

What are the benefits?
By entering into a client services arrangement with a PEO, businesses can realize many benefits, including:

• cost-savings;
• time-savings;
• compliance, payroll, claims, and other administrative functions support;
• increased benefit options;
• improved productivity and functionality;
• access to a team of experts; and
• increased peace of mind.

Ready to help your business thrive?
If co-employment seems like the right opportunity for your small business, consider choosing a PEO like Convergence Employee Leasing. We’re here to help you succeed by taking on some of your administrative and human resources responsibilities to help you focus on your day-to-day operations.

We pride ourselves on understanding how the economy affects all of our clients throughout Florida, Georgia, and Alabama. Our goal is to be a trusted partner, resource, and extension of our client’s businesses. Contact us today to further discuss your professional employer organization needs.