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
