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What Does Co-Employment Mean?

Questions about potential co-employment issues? TEKsystems can help.

Co-employment. We’ve all heard of it. But what does it really mean and how does it impact your business?

Co-employment can be best described as a situation involving a worker who potentially has an employer-employee relationship with two or more companies, where both companies have an actual and perceived responsibility to provide benefits or undertake other legal duties as an employer otherwise would.

Employers can enter the gray area of co-employment when contracting contingent workers for an extended period of time. Frequently what starts as filling an immediate need turns into a long-term project, which means worker contracts get extended.

The longer a temporary worker is at an organization, the more they start to be seen—at least in practical terms—as a full-time employee. So what benefits and compensation are they eligible to receive? And who should they be getting it from?

Understanding co-employment and how to mitigate risks is critical to safeguarding your business against serious consequences. These risks can include litigation, fines, tax and benefit implications and a negative brand perception.

Working with a managed services provider to acquire contingent labor can help reduce co-employment risks.

In a managed services model, the provider assumes responsibility for HR functions for contractors while affording partnering organizations the flexibility to use workers’ unique skills sets. The employer assumes ownership working conditions among other responsibilities.

Finding the right managed services provider to help navigate co-employment risks is important to protecting your business. An ideal partner will have a deep understanding of the laws surrounding co-employment and can address potential issues that arise, and most importantly, take on the appropriate level of responsibility to insulate you from co-employment risks.

As the need for niche IT skill sets increases, companies will leverage contingent labor well into the future. Managing and mitigating co-employment risks will be critical to ensuring success.

For more information, contact TEKsystems.