Co-employment

The relationship between a Professional Employer Organization (PEO), or employee leasing firm and an employer, based on a contractual sharing of liability and responsibility for employees.

Often independent contractors will find themselves in co-employment, where their joint employers have shared employer responsibilities. When you enter a co-employment relationship, the PEO co-employs your employees and assumes certain employer responsibilities, while the client company gains access to numerous benefits. In fact, this relationship incentivizes the PEO to align itself with your business goals and be a true partner in growing your business.

PEOs are often used because they provide expertize in time-consuming areas, such as payroll management. It's important to realize that independent contractors come from varying backgrounds. Some will easily pass a compliance review while others may have accepted an independent contractor label due to an economic circustance but are employee-minded. A worker who is begrudgingly working as an independent contractor in a co-employment arrangement can expose your company to risks.