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A quick guide to co-employment

Table of Contents

All you need to know about how co-employment PEO relationships help you save time and money.

For the obligations a PEO agrees to take on with respect to its clients, the PEO assumes specific employer rights, responsibilities, and risks through the establishment and maintenance of a relationship with the workers of the client. More specifically, a PEO establishes a contractual relationship with its clients whereby the PEO:
A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing relationships with the client’s employees and administering certain employer rights, responsibilities, and risks as agreed with the client.
The roles of the PEO and the client depend upon the facts and circumstances of each relationship — that is, each obligation should be examined individually as employment responsibilities are assigned in the parties’ CSA. Each party will be responsible for certain obligations of employment, while both parties might share responsibility for other obligations and be “an” employer, but neither party is “the” employer for all purposes.

Both the PEO and the client company establish a relationship with worksite employees. The PEO might engage with worksite employees with respect to specific matters involving human resource management and compliance with employment requirements, while the client company directs and controls worksite employees in the client’s day-to-day operations as well as the manufacturing, production, and delivery of its products and services.

The client company provides worksite employees with the tools, instruments, and places to work. Some PEOs provide assistance and suggestions to clients when it comes to offering worksite employees a workplace that is safe, conducive to productivity and operated with best practices with employment rules and regulations. Additionally, the PEO assists clients and worksite employees with workers’ compensation insurance and a broad range of employee benefits programs.

PEOs create a real relationship with worksite employees over certain matters. This relationship exists in fact, not just in form. PEOs often assist with the risks attendant to the personnel functions of the worksite employees. PEOs manage liabilities by monitoring new employment trends and requirements and developing policies and procedures for their clients and the worksite employees, as stated in the client service agreement.

How Can A Small Business Benefit From Using A PEO?

Many businesses across the nation use PEOs, or Professional Employer Organizations, to provide necessary HR services. While the strategy is often used by larger corporations, small businesses with between five and 100 employees can benefit immensely from outsourcing their HR needs to a PEO.

Benefits of Using a PEO

NetPEO has access to a nationwide network of PEOs that can assist companies in a variety of areas. For new and small business owners, this can provide immense relief from the pressures of complicated HR needs.

Employee Benefit Packages

One of the ways that a PEO can help is by providing employee benefits. Since PEOs often serve many companies through the co-employment model, the pool of members paying into the benefits package is larger, allowing small businesses to have access to the same quality of employee benefits as larger corporations. This can lead to happier employees, which in turn lowers turnover and saves companies money on the cost of constant employee training.

Payroll Services

PEOs employ accounting experts who have years of experience handling payroll matters. Not only does this free up business owners to focus on the growth and development of their business, but it lowers the chance of any costly errors in payroll management. The PEOs in NetPEO’s nationwide network have more than 200 years of combined experience in the industry.

Compliance Issues

One of the biggest headaches for many small business owners is figuring out how to navigate complex local and federal regulations. By outsourcing your company’s HR needs, you allow the experts at a PEO to ensure that your business is in compliance with all relevant labor laws. This will help your business avoid any potential lawsuits down the road.

General Employee Administration

PEOs can handle a company’s employee administration services. These include, but are not limited to, the following aspects of employee management:

Many businesses are required to have workers’ compensation insurance to provide for employees who injure themselves on the job in the course of their duties. By using a PEO, you can ensure that your company is in line with the law and is able to handle any claims that may arise.

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