Explain How The Co-Employment Model Really Work

How the Co-Employment Model Really Works

A partnership that helps your business grow

Most small and mid-size business owners spend an inordinate amount of time on payroll and human resources tasks that distract them form what they do best – growing their business. Through the co-employment relationship, a professional employer organization (PEO) can help provide the HR support you need, while making your business more competitive, compliant, and better able to manage risk.

What is a PEO?

PEOs partner with small and mid-size businesses to provide outsourced HR management, including employee benefits administration, risk management, compliance with regulatory issues, and training. PEOs work through a co-employment arrangement with a client

The PEO does not supply or make decisions about your workforce; instead the co-employer supplies services and benefits to you and your workforce. You maintain control of all of your business decisions and operations, while the PEO manages employee-related responsibilities like payroll, benefits, and HR administration.

Business owners who align with a PEO in a co-employment relationship transfer a substantial portion of the risk and responsibilities associated with employees to the co-employer. The structure of the relationship allows your PEO to offer better benefits and benefit options, handling of wage and employment tax responsibility, freedom from the responsibility of reporting, collecting and depositing the taxes with state and federal authorities, and assistance with workers’ compensation coverage and claim management.

The co-employment model is all about protecting what makes business successful – people. You and your employees are more likely to succeed when you are able to focus on the daily running of your business and on growing, rather than paperwork. Your employees get access to better quality benefits and you get more time to focus on being the leader of your business.

Co-employer responsibilities in the co-employment

While your co-employer will take on many employee-related tasks, you will still be responsible for the day-to-day business operations and activities of all employees.

Additionally, you are responsible for providing the workspace and resources necessary for your employees to perform their duties on a daily basis. Ultimately, you as the business owner are also responsible for the delivery of services or products provided by your business - and working with a PEO makes that easier. Businesses that partner with a PEO grow seven to nine percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business than other companies.

Co-employment misconceptions

The co-employment arrangement between you and your PEO leaves you in charge of your staff. While pre-employment services help you to stay compliant and navigate talent acquisition and management, you maintain control of your staff, their assignments, and pay rates. Your PEO can offer assistance with recruiting, onboarding, and termination, but you make the final decision about which employees to hire and