Co-employment is the business arrangement that allows PEOs, or Professional Employer Organizations, to work with companies and provide services to employees. Though there are few risks or liabilities that accompany co-employment, some employers may be afraid of the term. However, you still employ your employees when you have signed a co-employment agreement.
How Co-Employment Works
Though it may seem like a complicated setup, it is fairly simple to explain how co-employment works. When a company wishes to outsource some or all of its administrative or HR needs, it can sign a co-employment agreement with a PEO. The business owner is considered the worksite employer, and nothing changes about its relationship to its employees. Employees still fall under the authority of the worksite employer for all business-related matters.
The difference is that the PEO becomes a second employer with authority over administrative and HR matters. This allows the PEO the ability to legally provide services and handle sensitive information like payroll management or employee benefits packages.
The extent of a PEO’s authority is spelled out in the co-employment agreement. This allows your business to specify exactly which services you want the PEO to render and exactly how you want to retain authority.
At NetPEO, we pair your company with a PEO from our nationwide network, and we stay with you throughout the duration of the co-employment arrangement. This means that we can help to ensure that you are satisfied with the co-employment relationship and with the services that you receive. And, if you are not satisfied, we can work to rectify that as quickly as possible.
Services Provided Through Co-Employment
PEOs can provide a range of HR and administrative solutions to companies in need through the co-employment arrangement. In fact, the cost of using a PEO is often much cheaper than hiring a full-time, in-house accounting and HR staff.
A PEO can help your company by handling all administrative services, including recruitment, training seminars, the creation of employee handbooks, and the creation and enforcement of harassment policies.
Employee Benefits Packages
As a co-employer, a PEO will be able to provide your employees with benefits packages. Since PEOs often serve many different businesses, the pool of employees paying into the benefits packages is larger than any individual company would be able to provide. This means that PEOs can offer a higher tier of benefits to your employees at a lower cost.
Another useful aspect of the co-employment arrangement is that PEOs have a higher incentive to assist you with any and all compliance matters. Since they are also an employee of record for those employees, they may be liable for compliance issues as well. In other words, PEOs have a high motivation to make sure that your business is being run in accordance with state and federal labor laws.
The Benefits of Co-Employment
Co-employment is a useful way to outsource your company’s HR needs. By signing a co-employment agreement with a PEO, you can outsource your company’s entire HR department. At NetPEO, we also allow client businesses to select individual services on an a la carte basis, though the better deal often is to hire a PEO for wholesale services.
The first way that using the co-employment arrangement is helpful is by saving you money. PEOs often use one of two payment methods.
- Payment per employee, per year: often between $900 and $1,500 per employee per year
- Payment as a percentage of each pay period’s overall payroll: often between 3% and 10%
These payments are usually much cheaper than hiring a full-time HR staff in-house.
Another way that PEOs can help businesses through co-employment is by saving business owners time. Instead of having to worry about administration or compliance issues, business owners will be able to focus on the day-to-day running of their company. This can lead to faster growth and a more stable business environment in the long run.
By using the co-employment relationship, you can provide better services and benefits to your employees. Instead of trying to handle complicated paperwork on your own, you can engage the experience of PEO experts to better administer and regulate things like payroll, employee benefits, handling of HR complaints, workers’ compensation claims, and more. When your employees are happier due to more efficient services, they tend to stay with your company longer, which saves you money on costly turnover, constant onboarding of new employees, and recruitment initiatives.
Contact NetPEO to Search For a PEO Today
At NetPEO, we work as a PEO brokerage service to connect your business with the perfect PEO for your requirements. After you have been paired with a PEO and sign a co-employment agreement, we stay alongside you and regularly check in to ensure that you are satisfied with the services you receive.
PEOs are useful for any business, but they are especially important and valuable to smaller and mid-sized businesses with between five and 100 employees. To start the process of finding a PEO for your company, simply fill out the form on our contact page or call us today at (678) 376-1212.