HR Terminology Co-Employment

Complygate has put together a complete list of key HR terms, phrases, acronyms and jargon to assist HR professionals in navigating the extensive, ever-growing HR terminology. We would like to encourage you to read, share and make use of this terminology collection. If you have any suggestions of terms or keywords we have missed, please contact us and we will include them in our next update.

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What Is Co-employment?

  • What is Co-Employment? Co-employment is a contractual agreement between two companies - one being a Professional Employer Organization (PEO) and one being the “client company” - in which both companies share liability and responsibility for employees.
  • This contract is often known as a client service agreement (CSA).
  • Example of Co-Employment: A common cause of co-employment takes place when a recruitment agency arranges a work contract between an external company and one of their clients that were looking for a job.

How does Co-Employment work?

The client company - or business owner - has control over:

  • The business decisions
  • The operations that take place within the company
  • The daily duties and responsibilities of the employee

The PEO manages certain responsibilities - that are typical of employers and that have been previously stated and agreed upon in the CSA - such as:

  • Managing the Payrolls
  • Payroll Deductions
  • Paychecks
  • Preparation, filing and deposit of the Payroll Taxes
  • Provision of benefits to employees
  • Management of the worker’s claims and compensation coverage
  • They provide the client company with HR-related advice
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